10, 2004

The Next Generation Internet development in China

——CNC •Mr. Botao Xia

•General Manager Department of VIP Service

•China Netcom (Group) Corporation Limited

2

Outline

• Telecom market development in China

• Reorganization of Chinese Telecom Industry

• Telecom Network development in China

• China Next Generation Internet (CNGI) Project in CNC

3

CONTRIBUTION TONATIONAL ECONOMY OF TELECOMMUNICATION INDUSTRY

Year 1997 1998 1999 2000 2001 2002 2003

the value-added of telecommunication industry (a hundred million yuan)

1421 1700 2331 3227 3571 4056 4620

GDP (a hundred million yuan) 74463 78345 82068 89468 97315 104791 11649

Proportion 1.14% 1.30% 1.70% 2.16% 2.20% 2.32% 2.38%

1 、 Direct contribution to national economy of telecommunication industry

2 、 Indirect contribution to the economic growth of telecommunication industry

Year 1997 1998 1999 2000 2001 2001 2003

Impetus（% ） 3.74 3.71 4.32 4.62 4.42 4.67 4.78

Induced effect（% ） 2.86 3.25 4.38 5.73 6.32 7.47 8.64

4

State of development of market of China Telecom-1

By July of this year, The total amount of

national telephone subscriber tops 600

million, the mobile phone user exceeds the

regular telephone subscriber, leap to the

first in the world in pairs. The amount of

internet users is close to 87 million,

occupies the second place in the world.

The above-mentioned data are enough

to indicate that Chinese telecommunication

industry have a very important position on

the global telecommunication market.

Calculating only with capacity of the

network and user's scale, China has

already become the communication big

country in the world.

The increase situation about the telephone subscriber of our country since 1995

0

5000

10000

15000

20000

25000

30000

35000

1995 2000 2001 2002 2003 2004.7

Fixed Mobile

5

State of development of market of China Telecom- 2

•The Revenue Structure of Telecom Services in 2003 Broadband users have increased in

the form of avalanche, which make the

income of data communication

business increase by 46.1% compared

with the same period of last year.

The income of mobile communication

business increases by 17.3% compared

with the same period of last year. It is

still the leading strength in raising

income in the telecommunication trade.

Satellite communication and wireless

bleep market shrink widely, the

business income drops by 45.8% and

39.7% compared with the same period

of last year.

Other, 0.5

Data, 5.7

LongDi stan

ce14.6

LocalFi xedTeleph

one32.3

Mobi l e, 46.9

6

State of development of market of China Telecom-3

62 117.5 210 400890

16902250

26503370

4580

59106800

79508700

89.5%78.7%

90.5%

122.5%

89.9%

33.1%

17.8%27.2%

35.9%29.0%

15.1% 16.9%9.4%

0

2000

4000

6000

8000

10000

97. 10 98. 7 99. 1 99. 7 00. 1 00. 7 01. 1 01. 7 02. 1 02. 7 03. 1 03. 7 04. 1 04. 7

0

0.2

0.4

0.6

0.8

1

1.2

1.4

Number of users(10 thousand) Rate of i ncrease

China Internet enters broadband era

By July of this year:user's scale of China's broadband has already topped 18.75 millionThe amount of Internet users is up to 87 million, accounts for 6.7% of the national population.Service websites of the content reach 627,000, increase by 32.3% compared with the same period of last year.The total amount of the international export of bandwidth is 54G, increase by 190.3% in the same term.The frequency of users use the broadband is increasing (online chatting, network game VOD requesting, multimedia amusement).

Internet market development in China

7

Outline

• Telecom market development in China

• Reorganization of Chinese Telecom Industry

• Telecom Network development in China

• China Next Generation Internet (CNGI) Project in CNC

8

Reorganization of Chinese Telecom Industry

•

– Before1993: Chinese telecommunication market was monopolised

– 1994: Unicom was founded and competition mechanism was introduced to Chinese

telecommunication industry

– 1998:During the reform of govenmental structure, Infomation Industry Ministry, combining

former Electronics Ministry and Post and Telecommunications Ministry, was founded. Thus

seperation between govenment and enterprise was started in telecommunications industry

and post business and telecommunicaton business were running seperately

– 2000: Infomation Industry Ministry decided to reshape China Telecommunication and

remove its the paging, satelite and mobile business.

– 2002, fixed telecommunication operator were further reorganization. CNC was founded ,

there are 6 telecom operators, in Chinese telecommunication market and competition in

different market segments is initiated.

9

Market Share of Revenue of Chinese Telecom Industry

中国电信62.1%

其它1.1%

中国网通36.8%

China China TelecomTelecom62.38% 62.38%

CNCCNCGroupGroup

33.57%33.57% OthersOthers4..4%4..4%

•Market Share of Fixed Line By July of this year，•Market Share of Revenue By July of this year

中国网通16.8%

铁通1.1% 中国联通

11.2%

中国电信32.6%

中国移动38.3%

China China TelecomTelecom29.89% 29.89%

CNC CNC Group 16.08%Group 16.08%

China China MobileMobile 37.88%37.88%

China China UnicomUnicom 14.16%14.16%

China China Railway TecomRailway Tecom

1.97%1.97%

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Outline

• Telecom market development in ChinaTelecom market development in China

• Reorganization of Chinese Telecom Industry Reorganization of Chinese Telecom Industry

• Telecom Network development in ChinaTelecom Network development in China

• China Next Generation Internet (CNGI) Project China Next Generation Internet (CNGI) Project in CNCin CNC

11

Chinese telecommunication network current situation

Letter order network

Business

platform

Supporting system

Authentication

, charging

Optic fibre / WDM / microwave / satellite

SDH/MSTP

Terminal part

Air shower's cell-phone

 

Desk-top terminal station

ADSL CPE

POTS

H.323 terminal

station

PSTN

X.25/DDN/FRPHS

IP

ATM

Intellectual Intellectual network platformnetwork platform

Air Air shower's shower's

messagemessage

Business platform

of broadband

BAS

PHS

WLAN

Insert wirelessly

Insert wiredly

ADSL

LAN

Netw

ork m

anagement

system

Synchronousnetwork

Tent, custom

er service

LMDS/MMDS

Narrow band access

 

12

The Chinese telecommunication network is

to the network gradual progress of future generation

OSS

OSS

Broadband Access

wirelessly 

Supporting system

Optic fibre / WDM / satellite 

Intellectual Intellectual Optic fibre networks

Access technology

Synchronousnetwork

Convey layer

Bear layer

Control layer

Use layer

FT

TX

/ wired

acc

ess

Terminal part

Inte

llige

nt , m

uti-

bu

sin

es

s te

rmin

al s

tatio

n 

Third party's application

Muti-business inserting

PACKET CORE

Use the service Use the service systemsystem

API

supporting system of business Management

The control point of the

business access

(SSP/BAS/GGSN…)

13

Outline

• Telecom market development in ChinaTelecom market development in China

• Reorganization of Chinese Telecom Industry Reorganization of Chinese Telecom Industry

• Telecom Network development in ChinaTelecom Network development in China

• China Next Generation Internet (CNGI) Project China Next Generation Internet (CNGI) Project in CNCin CNC

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Chinese government & CNGI• Basic policyBasic policy

– Actively support IPv6Actively support IPv6– Develop trial projects and implement it step by stepDevelop trial projects and implement it step by step– Set new requirements, standards and regulation to speed-up development of IPv6 marketSet new requirements, standards and regulation to speed-up development of IPv6 market

• Government entities involved Government entities involved – SCIO(State Council Information Office)SCIO(State Council Information Office)– MII ( ministry of information industry )MII ( ministry of information industry )– MOST ( ministry of science and technology )MOST ( ministry of science and technology )– SDPC ( State Development Planning commission )SDPC ( State Development Planning commission )– ……

• related research institutesrelated research institutes – NSFC ( national natural science foundation of China )NSFC ( national natural science foundation of China )– CAE(Chinese Academy of Engineering)CAE(Chinese Academy of Engineering)– ……

• none-profit networknone-profit network – CERNET(chinaedunet)CERNET(chinaedunet)– CSTNETCSTNET– ……

• IPv6 Industry in ChinaIPv6 Industry in China– Operators: CT, CU, CMCC, CNC, CROperators: CT, CU, CMCC, CNC, CR– Domestic vendors : Huawei, ZTE, Jiaxun feihong, Northern Jiaotong universityDomestic vendors : Huawei, ZTE, Jiaxun feihong, Northern Jiaotong university

• Standards and technology R&D began at:Standards and technology R&D began at:– Basic protocol, networking mechanismBasic protocol, networking mechanism– Mobile IPv6Mobile IPv6– IPv6 routing protocols, such as OSPF, BGPIPv6 routing protocols, such as OSPF, BGP

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NGI progress in China

• 1998, CERNET-IPv6 Test-bed started1998, CERNET-IPv6 Test-bed started

• 1999, IPv6 demo system started 1999, IPv6 demo system started （ （ MOST 863MOST 863 ） ） • 2000, NSFCNET started 2000, NSFCNET started （ （ NSFC NSFC ））• 2001, IPv6 MAN demo system started2001, IPv6 MAN demo system started （ （ CASCAS ））• 2003, CNGI (Chinese Next Generation Internet) project (see below2003, CNGI (Chinese Next Generation Internet) project (see below

16

XinJiang

XiZang

兰州

NeiMengGu

NingXia

西安

ShanXi

HeBei

郑州

武汉

南京

合肥 上海

YunNan

GuiZhou

长沙JiangXi

GuangXi广州

HaiNan

JiLin

TaiWan

成都

QingHai

济南

重庆

CERNET

中国电信中国网通/中科院中国移动中国联通中国铁通

杭州

沈阳

天津

HongKong

HeiLongJiang

LiaoNing北京

ShanDong

JiangSu

ZheJiang

FuJian

GuangDong

HuNan

HuBei

HeNan AnHui

ShaanXi

GanSu

SiChuan

长春

昆明

深圳

厦门

CNGI Node

•China Telecom

•China Netcom

•China Mobile

•China Unicom

•China Railcom

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China Next Generation Internet (CNGI) Project

Target:

– Test-bed for the

next generation

Internet

– Study network

Services

– Demonstrate

Applications

– Provide real

Commercial

Services

– Should use Chinese

industry equipment

Requirements for the CNGI Pure IPv6 network

– High

performance

– Mobile/Wireless

support

– Network security

guarantee

– Setup reasonable

charging/busines

s Model

• NGN & NGI

– NGN is a kind of network

in which IP Package

digital communication is

the core technology.

– We pay mach attention to

the market requirments

and the smoothly

transition from current

network to NGN or NGI.

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CNGI progress

• Phase one–From 2003 to end of 2005, setup the demo

network• Phase two

–From 2006 to 2010, large scale deployment throughout China

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Applications in CNGI

• Video stream

• Network Grid

• Environment monitoring

• Remote control, virtual lab

• Mobile and wireless applications

• Advanced manufacturing

• Remote education, digital library

• Medical care• …

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Key Issues to be addressed by CNGI

• Standard study

• Large scale routing (BGP implementation…)

• Large Scale multicast

• QoS

• Mobility

• Management (BOSS)

• Migration from IPv4 to IPv6

• Accounting and business model

• …

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We search for further excellence!We search for further excellence!