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PAGE 2 WWW.TOTALTELE.COM JANUARY 2012

CLOUDS ON THE MOVE

The market for cloud computing and

cloud-based services is set to boom.

As more and more enterprises seek

to avoid paying money upfront for IT

infrastructure and services, opting

instead for pay-as-you-go business

models, the cloud opportunity is

poised for rapid growth. According

to some analyst projections, annual

revenue from cloud services will

exceed US$150 billion in 2020, upfrom an estimated US$28 billion in

2011 (see Figure 1: Global Cloud

Addressable Market Opportunity).

The question for telcos, both fixed and

mobile, is how big a role they can play

in this expanding market. Providing

only a dumb pipe will not, for many,

be an appealing prospect. Meanwhile,

the likes of Amazon, Google, Microsoft

and Salesforce.com companies with

little or no network assets have made

most of the front running. Between

them they have become established

players in each of the three main

cloud formations: IaaS (Infrastructure-

as-a-Service), PaaS (Platform-as-

a-Service) and SaaS (Software-as-

a-Service). A number of companies

with system integrator backgrounds,

such as Accenture, Capgemini, IBMand Infosys, are also acquiring cloud

infrastructure and muscling into the

market. Where do telcos fit?

According to Camille Mendler, a

principal analyst at Informa Telecoms

and Media, the majority of telcos have

yet to make their stamp on the cloud.

Most operators are still focused on

just getting in the game rather than

differentiating, she says.

Informa tracks the cloud activities of

over 90 operators around the world

and calculates they spent about US$8

billion on cloud-related pursuits in the

first six months of 2011. Most of that

money has been spent on buying fixed

assets and replicating storage services

rather than on service innovation,adds Mendler. For many, its all about

playing catch-up with the established

players and offering commodity-like

services. And when that happens,

price is the only way to differentiate.

But it need not be like that. Mobile

network operators are underplaying

the fact they can allow anyone to

access a cloud service from any device

a device-independent desktop

virtualisation service in a secure

fashion, continues Mendler. Although

third parties could offer this service to

the enterprise, Mendler argues that

operators are better placed to provide it

because they own the network, which

allows tighter integration between the

device and cloud-based applications.

And without third parties in the way,

enterprises can receive traffic usagereporting directly from the mobile

network operator, another source of

comfort for IT managers who need to

be alerted immediately when anything

out of the ordinary occurs.

Not surprisingly, perhaps, the mobile

operators that Total Telecom spoke

to for this special ZTE-sponsored

supplement (Orange and Vodafone)

agreed that they could indeed

play a prominent role in helping IT

departments cope with the rapid

adoption of smartphones and tablets

within the enterprise. Importantly,

mobile device management vendors

also see the value in partnering with

operators. When HP announced last

year its DMaaS (Device Management-

as-a-Service) product, it was throughpartnership with telcos as trusted

providers that the technology firm

envisaged getting the product to

market. And by offering a secure

and customisable web portal for IT

administrators to track and manage

devices, mobile operators can add

another service to their cloud portfolios.

There are three main things that

telcos can bring to the cloud, says

Adrian Drury, who heads up the

media, broadcasting and telecoms

consulting practice at Ovum. First,

they have extensive enterprise

customer relationships, so they can

be ideal partners for cloud vendors to

distribute their services. Second, they

have strong cash flow [enabling the

purchase of cloud assets, as well as

boosting customer confidence abouttheir longevity]. And third, they have

the network assets to offer private

cloud services, such as secure tunnel

access into data centre infrastructure.

Pure IaaS plays with no network assets,

such as Rackspace, could also offer

private cloud services by striking up

deals with network providers. They could

Mobile operators can differentiate in the cloud byleveraging their network assets and partnership appealBy Ken Wieland


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CLOUDS ON THE MOVE

then offer a bundled package of cloud

and cloud-access services to enterprise

customers. But leaving aside the matter

of how uncomfortable IT departments

of multinational corporations might bein not having a direct and accountable

relationship with network providers,

Drury questions the willingness of global

network operators to enter such deals

anyway. Many of them are building out

their data centre infrastructure, so how

incentivised would they be [to play a

subcontractor role]?

FIXED CLOUD FIRST,

MOBILE LATER?The most eye-catching telco moves in

the cloud to date have been arguably

led by fixed-line businesses. That

is usually where the cloud expertise

resides, which perhaps explains why

mobile cloud propositions have been

relatively unsophisticated, or why, in

most cases, the cloud is not being sold

in a unified way by hybrid operators

across their fixed and mobile divisions,

says Informas Mendler.

The biggest deals over the last couple

of years in recent months have come

from Verizon in the US and Japans

NTT Group. In January 2011, Verizon

splashed out US$1.4 billion on

Terremark, giving access to some 50

data centres in the US, Latin America

and Europe. In July 2010 NTT acquired

South African-based Dimension Datafor US$3.2 billion. Dimension Data

specialises in helping companies

migrate to managed infrastructure

services and cloud computing, a

key requirement in stimulating cloud

adoption. Verizon also announced

in August 2011 it had purchased

CloudSwitch, a start-up that has

developed software to help enterprises

move applications and workloads

more easily between company data

centres and the cloud.

Buying in system integration expertise,

or partnering with specialists as a

trusted intermediary combined with

their network and cloud infrastructure

assets give telcos a promising

route to differentiation. Enterprises,

particularly large ones, are unlikely to

rush headlong into the cloud and will

generally prefer to keep mission-critical

applications and data in-house. Other

applications such as email, CRM

(customer relationship management)and unified communications are

more likely to be farmed out to the

cloud and bought on a usage basis:

the so-called hybrid approach. The

big challenge in a hybrid environment

is to integrate the likes of SaaS and

UCaaS (Unified Communications-

as-a-Service) with on-premise IT

infrastructure. If fixed telcos can prove

themselves worthy in this space, it

would give them a stronger position to

promote the cloud-based offerings of

their mobile divisions.

The experience of running mobile

networks can also help develop a

hybrid operators cloud proposition

overall. That is the view of Alex Rigaldo,

cloud computing director at OrangeBusiness Services (OBS), owned by

France Telecom, which has both fixed

and mobile network assets. Cloud

computing is about investing in very

large infrastructure, sharing it with many

users and charging for how much is

used, he says. This is exactly the same

as the mobile-phone operator model

and we already have usage-based billing

systems in place. We also know about

end-user behaviour and can leverageour experience in end-user portals to

differentiate our cloud services.

The combination of network and

portal know-how is something Rigaldo

believes is a potent one, enabling OBS

to offer a more sophisticated IaaS

than the likes of Amazon. We have

developed a holistic service where the

IT and network components can be

managed from a single pane of glass,

he says. We also believe our portal is

superior to the competition in many

Source: Gartner 2009, IDC 2010, CSMG analysisNote: Includes Global Enterprise for North America, Europe, and Asia, but only US SMB


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CLOUDS ON THE MOVE

aspects. It has the ability to group

virtual machines into virtual appliances,

which gives a functional view. It is not

just a pile of virtual machines. The

interface is also more user-friendly,which is helpful when it comes to the

management of usage rights.

The OBS cloud strategy is not only

to differentiate in the MNC market by

offering what it calls enterprise grade

cloud services, such as IaaS and

UCaaS, but to make life easier for IT

departments to purchase and adopt

those services through its end-user

portal. And like a growing number oftelcos, OBS is acting as an aggregator

of cloud services by partnering with

various SaaS vendors to create

application stores with a single portal

where enterprises can pick and

choose what is suitable for them.

MOBILE TELEPHONY IN THECLOUDS

While the likes of NTT, OBS and Verizon

are extending their cloud portfolios from

fixed to mobile, Vodafone is doing it the

other way around. One of the biggest

mobile operators in the world, Vodafone

is either leasing or acquiring fixed-line

assets in Europe to enhance its cloud-

based portfolio for SME customers.

When we looked at cloud services a

few years ago and started to formulate

our strategy, we asked ourselveswhether we could really differentiate

from OTT [over-the-top] Internet

players, and, if so, where could we

do it? says Scott Petty, director of

business products and services at

Vodafone.

The answer that Vodafone came up

with was cloud telephony, initially

targeted at the European SME market.

We took the concept of an on-premise

IP PBX, built that into our cloud, and

then integrated the mobile environment

very tightly into that, says Petty.

The resulting product was Vodafone

One Net, a cloud telephony platform

integrating fixed and mobile PBX

functionality. One Net allows SMEs

to transfer unanswered fixed calls

to mobiles automatically, as well as

offering a range of call management

functions. Through the use of a

Web browser, either on a PC or a

smartphone, mobile users can accessvarious advanced call control features,

such as blacklisting unwanted calls or

SMS, convert voicemail to email, and

even setting up different voicemail

greetings for different callers. By

securely opening up their core networks

to the Internet, mobile operators can

arguably provide more innovative and

compelling cloud-based services than

OTT providers.

There are clear strategic advantages

in doing so. Petty reports that One

Net customers, on average, purchase

between 20% and 25% more handsets

than those who dont use the service,

which drives mobile penetration; One

Net customers also generate around

20% incremental usage; and, last but

not least, there is lower churn among

customers opting for cloud-basedtelephony. Since Vodafone launched

One Net in October 2009 the service

has attracted 1.5 million subscribers

across Spain, Italy, Portugal, UK,

Germany and the Czech Republic, each

paying monthly bills on a usage basis.

The One Net service was extended in

June when Vodafone announced a

partnership with Microsoft to offer Office

365, giving businesses cloud access to

the latest productivity tools from the

software giant. These include email and

calendar, Microsoft Office Web Apps,collaboration tools, instant messaging

and online meetings. But Vodafone is

not acting as a mere reseller of Office

365. It adds value by integrating the

One Net cloud telephony platform

with Microsofts software. Office 365

is offered as a bundle with One Net,

charged on a SaaS basis. And while

the Office 365 margins are not as great

as with One Net Vodafone shares

the SaaS revenue with Microsoft the

likelihood of churn is decreased by

offering a wider range of services.

Many SaaS offers provided by

operators are effectively loss leaders

to lock in customers, says Informas

Mendler. The SaaS providers also

benefit, of course, through telco

partnerships. They gain access to large

swathes of telcos SME customers

that otherwise would be out of their

marketing reach.

The cloud architecture Vodafone

has adopted is PaaS. Being open

and extensible, the PaaS approach,

according to Petty, makes integration

between the mobile network and

other applications that much easier,

although still not simple. It took 18

months of integration work betweenVodafone and Microsoft before the

Office 365 announcement could be

made. The benefit for Vodafone,

though, is it hasnt just created a

bespoke environment for Microsoft. It

can bring in other application partners,

as well as offer the PaaS platform to

larger enterprise customers for mobile

application development.


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CLOUDS ON THE MOVE

But success in the cloud will not be all

about technology. While PaaS puts

us in good stead, argues Petty, you

have to transform your sales and go-

to-market channels, as well as yourbusiness models, if you want to deliver

higher-value services successfully.

MARKET IMMATURITY

The benefits of the cloud, says OBS

Rigaldo, are well understood: cost

reduction, flexibility and elasticity. But

cloud computing is not yet a mature

market, he adds, even though many

people talk about it. Technologies are

maturing but the market is still veryfragmented. Its difficult for enterprises

to decide who is the right service

provider for them.

Informas Mendler goes further. The

telecom cloud is fairly immature,

she says. [Many operators] are

still learning what IaaS and SaaS

is, and still learning what the real

differentiators are.

But the opportunity for growth is there,

she believes, particularly for mobile

operators that can flex their security

and network muscles. Securing cloud

access on any device and location is

critical, but that shouldnt include only

people. It should include M2M and

embedded services. M2M services

are being increasingly managed by the

cloud.

The prize for operators that get the

cloud right could be huge, generating

incremental revenue and driving

down churn. A company that has

bought a cloud service has a much

higher tendency to buy another cloud

service, says Vodafones Petty. That,

above all, should focus minds.

Cloud computing enables

users to avoid the upfront

expense of building their own

IT infrastructure. They can

take advantage of advanced

computing services that are

available in remote data centres,

paid for on a utility-like basis.

As with electricity, users pay for

what they use. Usage can be

also increased easily and quickly

again, just like electricity.

The cloud has three distinct

layers. On the bottom layer is

Infrastructure-as-a-Service (IaaS),

which includes computing and

data storage. Mobile network

operators (MNOs) are not

prevalent in this space, although

SFR (a French mobile operator)

chose IaaS in partnership withHP as its first cloud foray with

service launch in June 2010.

Market leaders are GoGrid,

Rackspace and Amazon Web

Services (the computing arm

of the online retailer), but fixed-

line telcos are also beginning to

acquire cloud infrastructure. Big

moves include Verizons US$1.4

billion acquisition of Terremark

in January 2011, giving the US

telco access to some 50 data

centre around the world. Orange

Business Services (OBS), which

targets multinational corporations,

signed a deal last summer with

SITA an organisation that

provides IT and telecom services

to the airline industry to build out

six data centres around the world.

The next layer up is Platform-as-

a-Service (PaaS), which enables

developers (including enterprises)

to write Web applications quickly

without the complexity of buying

and maintaining the software

and infrastructure underneathit. Google, Salesforce.com and

Microsoft are some of the big

name companies that offer

PaaS. Telcos of both stripes

fixed and mobile have not

made a big impact on the PaaS

market, although Vodafone has

adopted PaaS as part of its cloud

architecture.

Sitting on top of the cloud

computing stack is Software-as-

Service (SaaS), where applications

such as email, CRM, ERP, unified

communications and device

management are sold on a pay-

as-you go basis. Mobile operators

wishing to offer these services

will usually need to partner andshare the SaaS revenue. Although

margins will typically be small,

bundling in services with voice

and data packages is a good way

for MNOs to increase network

usage and reduce churn.

NAVIGATING THROUGH THE CLOUDS: A QUICK GUIDE


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SECURING THE POST-PC ERA

Smartphone shipments started

to exceed PC shipments as far

as back as 2010. ZTE, a China-

headquartered supplier of telecoms

equipment and mobile phones,

says more than 85% of consumers

will eventually access IT through

wireless technologies, whether

over cellular networks or short-

range Wi-Fi. Cloud computing

and the growing number of cloud-

based applications, says ZTE, are

providing the necessary conditions

to usher in a post-PC era. Cloud

computing technologies lower the

computing requirements on the

device client, says Mr Tian Feng,

Senior Director of ZTE Wireless

Architecture Department. And if

you can run popular applications

with fewer computing and power

requirements from the local device,

smartphones and tablets will

boom.

Consumers have driven smartphone

sales, and this in turn is having a

dramatic impact in the workplace. Formany smartphone and tablet users,

these lifestyle devices are not just for

personal use but ideal for work tasks

as well. They want access to email and

other corporate resources, whether

based in the cloud or on-premise. And

many, particularly the millennials

employees born in the 1980s see

mobile access to social networking

sites as a great way to do business.

BYOD HEADACHES

This surge in so-called IT

consumerisation, however, is causing

headaches for IT managers. Since

enterprises are generally reluctant to

dictate to employees what devices they

should or should not use, preferring to

adopt a BYOD (bring your own device)

policy, IT departments are struggling

to keep control. Enterprise support

for these types of devices is typically

pretty weak, particularly those running

on Android, which has a number of

security flaws, says Adrian Drury, an

analyst at Ovum.

Juniper Networks, a software and

network equipment supplier which

also runs a dedicated research centre

in the US to monitor network security

threats reports a 400% increase in

Android malware since last summer.

And it is smartphones running on the

Google-backed operating system

that claim the biggest market share

worldwide. According to Gartner,

Android had grabbed a 53% chunk

of the smartphone market during Q3

2011. Another worrying statistic for

enterprises is that one out of every

twenty smartphones sold are either

lost or stolen.

The good news for mobile operators,

according to Ovums Drury, is that they

are typically seen by enterprises as

natural points of contact to help them

with mobile device management. This

gives them an opportunity to bundle

in another service, most likely in

partnership with cloud-based vendors,

to their voice and data packages.

The prospect of continuing high rates

of smartphone and tablet adoption

means that enterprises are more likely

to favour a cloud-based or SaaS

mobile device management solution

as it scales more easily than one based

on physical appliances.

Yet Drury says mobile operators are not

rushing into this space. There are lots

of companies offering services around

mobile device management, he says.

The market is commoditizing pretty

quickly and nobody is sure where its

going.

Mark Kenealy, UK and Ireland country

manager at Orange Business Services

(OBS), nevertheless believes mobile

operators are best positioned to

reassure enterprises on mobile device

security. If enterprises are looking to

control and manage their security, as

well as get solid reporting in apps and

mobile device usage, we can providethat, he says. What enterprises are

looking to do is partition devices, so

that the workspace on them is secure

on one side and personal usage is not

restricted on the other.

IT managers also want to locate lost or

stolen devices, usually to lock or wipe

them through an easy-to-use

IT access is moving from fixed to wireless devices, spurredon by cloud computing. Mobile operators can play a key roleby making the transition a secure one.By Ken Wieland


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SECURING THE POST-PC ERA

interface. It is a basic service that

mobile operators could add relatively

easily to their portal of cloud-based

offerings. Yet IT departments need not

necessarily turn to the mobile operatorto ease their worries about BYOD

policies. As Drury points out, the

market for mobile device management

solutions is becoming increasingly

competitive, a fact underlined by

the September announcement from

heavyweights Capgemini and Sybase

(a SAP company). In response to the

rising tide of enterprise mobility, the

two companies said they were goingto offer SaaS-based mobile device

management, as well as a platform

or PaaS for mobile enterprise

application development. No mention

was made of mobile operators in the

announcement.

REMOTELY SECURE

Aside from scalable mobile device

management solutions, enterprisesneed to manage and secure their

corporate IT resources when

accessed remotely. Better still, IT

administrators would like to make sure

that smartphone and tablet users can

access only what they are allowed to

access, according to end-user profiles

that can be easily managed from a

Web-based interface. If that could be

done on a SaaS basis to lower upfrontcosts and with security guaranteed

then enterprises might find such a

service attractive.

OBS certainly hopes so. The operator

expanded its cloud portfolio in October

when it launched what it claimed to be

the worlds first remote and secure

access service based on a SaaS

model. Working in partnership with

Juniper Networks Junos Pulse, which

provides SSL-based VPN clients, OBS

says it can provide secure access

to a companys internal IT system

regardless of device (laptop, tablet and

smartphone) and connection (WiFi, 3G

and DSL).

But this is not purely a mobile or

wireless cloud-based offering from

OBS. The operator requires that

the data centres of its multinational

customers whether in the cloud

or on-premise are connected toits fixed MPLS network before they

qualify for its remote access service.

OBS can then manage the fixed-line

network performance and offer SLAs,

as well as giving more bandwidth when

required via a Web-based portal

on demand. OBS says the remote

access service can, via a few clicks

on the administration interface, go

from managing a handful of concurrent

users to thousands.

SLAs are of course difficult to deliver

over mobile and WiFi connections,

especially when employees are

visiting customers sites. The best-

effort public Internet is usually the

only option. We dont think this

will be a barrier to take-up, as there

is usually lighter usage from mobile

devices, says Nicolas Furg, head of

security at OBS. For example, only a

low amount of bandwidth is needed

to check orders from the internal

SAP system. The main concern for

enterprises surrounding mobility is not

lack of bandwidth but security, and

this where we bring the value.

We can encrypt all the traffic between

the device and the data centre.

OBS and Juniper already have a remote

access service in the market, basedon physical appliances, which has

300,000 users. By moving to an SaaS-

based model, however, enterprises

can take advantage of the clouds

economies of scale or elasticity. OBS

can also widen its service portfolio.

Partnerships between operators and

security specialists look to benefit

both parties, but they will have to work

hard at getting their message across

to enterprise customers. In a nascent

market with high-growth potential , IT

managers will be confronted with a

variety of cloud-based options, from

different players, to ease their BYOD

concerns. Reassuringly for operators,

particularly those with a strong fixed-

line heritage, they are generally held inhigh regard for network security. They

have a head start over rivals..


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ZTE WINS NEXT-GENERATION MOBILE NETWORK DEAL

Article contributed by:

The TD-LTE Project Reinforces

ZTEs Leadership in TDD (Time-Division Duplex)

29 September 2011, Shenzhen, China

ZTE Corporation (ZTE) (H share

stock code: 0763.HK / A share stock

code: 000063.SZ), a publicly-listed

global provider of telecommunications

equipment and network solutions,

and Wireless City Planning(WCP) a

SOFTBANK Corp.(SoftBank)s GroupCompany, one of Japans major mobile

operators --today announced that they

have entered into a strategic partnership

to use AXGP -- a technology similar to

TD-LTE -- to build a next-generation

mobile network for WCP in Japan

giving it access to the bulk of Japans

population.

According to the agreement, ZTE waschosen by WCP as its primary strategic

partner for AXGP. This network will reach

99 per cent of ordinance-designated

citys population. The two companies

will also explore the possibility of

creating a joint lab to develop emerging

technologies, to drive the development

of next generation technologies including

AXGP, and to grow the global reach of

AXGP.

Based on its leading SDR platform,

ZTE provides a stronger base-band

processing capability compared with

other equipment providers. This will

help ZTE achieve its exclusive joint

cell processing technology as well as

interference-eliminating technology.

WCP Director and COO (Chief Operation

Officer) Junichi Miyakawa said: Wehave chosen ZTE, the worlds leading

telecommunications equipment provider,

as our partner to build the worlds largest

TDD network. We hope that ZTE can

maintain its leading innovation capability

in mobile communications technologies

to help us build the best next generation

mobile data network in Japan and even

the entire world.

ZTEs EVP Xie Daxiong said: SoftBank

is a top global operator. We are very

pleased to gain SoftBanks recognition

of our leading technologies, outstanding

customization and service capabilities,

and our delivery capability in TD-LTE.

By meeting the stringent requirements

of SoftBank, we can also increase our

competitiveness among the major global

operators.

ZTE is teaming up with China Mobile,

Hutchison Whampoa, KPN and SoftBank

to actively promote the development

of TDD technologies across the globe.

In 2011, Hutchison Whampoa chose

ZTE to deploy the integrated LTE TDD/

FDD commercial network in Sweden --

the largest one in the world prior to the

Japan deal -- to achieve the first major

breakthrough in the overseas market forZTE in TD-LTE.

The collaboration with SoftBank

represents another major strategic move

by ZTE to enter the Japanese market

with its leading TDD technologies,

and has again demonstrated ZTEs

leadership position in the LTE market,

especially in TD-LTE.

ABOUT ZTE

ZTE is a publicly-listed global provider

of telecommunications equipment

and network solutions with the most

comprehensive product range covering

virtually every sector of the wireline,

wireless, service and terminals markets.

The company delivers innovative,

custom-made products and services

to over 500 operators in more than 140

countries, helping them to meet the

changing needs of their customers while

achieving continued revenue growth.

ZTEs 2010 revenue led the industry

with a 21% increase to USD10.609

billion. ZTE commits 10 percent of its

revenue to research and development

and takes a leading role in a wide range

of international bodies developing

emerging telecoms standards. A

company with sound corporate socialresponsibility (CSR) initiatives, ZTE is

a member of the UN Global Compact.

ZTE is Chinas only listed telecom

manufacturer, publicly traded on both

the Hong Kong and Shenzhen Stock

Exchanges (H share stock code: 0763.

HK / A share stock code: 000063.SZ).

For more information, please visit www.

zte.com.cn.

ZTE Wins Next-Generation Mobile Network Deal fromJapans Wireless City Planning


11/21

Now working

seamlessly

together.

Taking a large step forward can be

daunting. This is why we have based our

LTE solutions on mature hardware designs

for SDR centralized platforms a field in

which we are already leading global

suppliers and created systems that allow

for truly seamless upgrades and, above all,

super smooth performance. We also

customize everything down to the last

detail and provide superior after-sales

service so that you can be sure of

receiving and relying on a solution that

is a perfect fit for your unique needs.

This way, a huge step doesnt have to

feel quite so big.

www.zte.com.cn

LTE


12/21


Q&A WITH ZTE

What challenges and

opportunities will be brought to

the wireless networks by cloud

computing in the future?

ZTE believes that most users (more than

85%) will access IT world through wireless

technologies (wide range3G/4G/5G

and short range--WiFi). The smart-phones

and the Pads will dominate most peoples

private and business IT usage.

One of the major reasons is that cloud

computing lowers down the computing

capability of the devices on client side.

Only if the application can run on clients

devices with little requirements on local

device, device like Smart phone and Pad

can boom. Mobilization is a basic need

for people. A power cable connecting our

device which restrains our mobility is not

preferred. Based on ZTEs research, cloudcomputing can achieve this goal and be

the revolutionary technology to trigger the

BIG transition from desktop/laptop (all PC)

to smart phone and Pad. This transition

we also call it as POST PC era.

From the logic above, we can see how

big the traffic impact will be generated

on our radio network by subscribers.

In conclusion, we can say that only when

cloud computing is booming, all things

above could happen. Its one of the

major key technologies.

What is ZTE doing in wireless field?

ZTE is one of the worlds few providers

who are capable of providing a wide

range of wireless products and solutions,

including GSM, UMTS, TD, WIMAX,

CDMA and LTE. ZTE is now one ofthe leading suppliers in main wireless

standards in the world, offering diversified

options which create greater values

for customers. ZTE are making great

achievement in European & American

market and developing market with large

population. For example, ZTE gained

new cooperation in different standards

with global mainstream operators, such

as France Telecom, TelkomSALtd,

Telefonica, America Movil and Vivo, andgreat achievement in Brazil and South

Africa, establishing a firmer foundation

for the future development.

As of the end of 2010, ZTEs SDR base

station, which is highly recognized by the

operators, had been deployed in more

than 80 operators in over 60 countries

with accumulative volume of shipment

up to 700,000.

ZTE think what kind of products

and solutions in the market are

more competitive?

Operators are facing challenges, such as

longtime coexistence and evolution of a

variety of standards and spectrums for

wireless networks, increased difficulties

in site acquisition and antennae erection,

and problems related to the size of

subscribers, revenues, network load

balancing. On one hand, these challenges

lead to increased complexity and costs

in network building. On the other hand,

operators are more and more concerned

of how to increase network efficiency,

reduce network costs, safeguard return

on investment and avoid being dump

pipe. The integrated solutions offered

by ZTE, such as Uni-RAN, Uni Core and

Uni-backhaul, demonstrate that ZTE isable to provide E2E network networks

featuring unification, universalism,

convergence and evolution. With a

single platform architecture, unified

SDR base station solutions, RNC/BSC

platform solutions, backhaul solutions

and network management solutions are

provided to meet address the network

convergence of multiple standards and

Mr Tian Feng, Senior Director,

ZTE Wireless Architecture Department



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Q&A WITH ZTE

spectrums and smooth evolution toward

the next generation technology. They also

help simplify the network architecture

and reduce the TCO in a noteworthy

manner. Oct, ZTEs Uni-Ran basedLTE-A system with more than 1Gbit/s of

peak downlink speed showed up in the

Expo COMM China 2010. Additional,

in the three consecutive KPI evaluation

of the worlds largest WCDMA network

conducted by China Unicom, as well as

the evaluation of the WCDMA network of

Hong Kong CSL and South Africa CELL

C, ZTE were ranked first.

How is ZTE doing in LTE?

ZTEs ongoing LTE products cover FDD

LTE and TDD LTE. ZTE Corporation has

set up LTE R&D centers and marketing

research institutes both abroad and

at home, such as Xian, Shenzhen,

Shanghai, Nanjing, America, Europe,

etc. with more than 4,000 experts

focusing on the research of wireless

system, core network and terminals.

ZTE Corporation has entered the TD-LTE

field in 2005. ZTE has been continuously

committed to the development of radio

infrastructure, chipset and terminals and

led the TDD industry. Up to now, 8 TD-LTE

R&D centers are set up in U.S., Europe

and China including Shenzhen, Shanghai,

Xian and Nanjing, and marketing research

institutes both abroad and at home, such

as Xian, Shenzhen, Shanghai, Nanjing,America, Europe, etc. with a total number

of more than 4,000 experts focusing on

the research of radio wireless system, core

network and terminals. ZTE commits 10

percent of its revenue to R&D and cutting-

edge technologies. ZTE also has a 7%

share of the total LTE essential patents

and leads the industry with the most

independent IPRs.

ZTE LTE-A equipment can achieve

good compatibility with LTE and can

provide higher peak rate, throughput and

spectrum efficiency. At the Mobile World

Congress 2011 in Barcelona Spain ZTEfirstly demonstrate LTE-A CoMP-based

services in the world. ZTE plans to launch

LTE-A commercial products in 2012.

Respectively, how is ZTE doing in

GSM/UMTS/CDMA?

Years of R&D and market application

have developed ZTE into one of the

main GSM/UMTS equipment vendors

around the world. ZTEs GSM/UMTS

products had been applied in hundredsof countries and regions and 120

operators by the end of Dec 2010. In

particular, the SDR-based Uni-RAN

solution accelerates the breakthrough

making and market share increase in

global high-end markets. Because of the

outstanding performance of SDR base

stations, ZTE won the world-renowned

consulting company Frost & Sullivans

2010 Best SDR Equipment Vendorof the Year award. In June 2011, the

proposal of Smart RAN submitted by

ZTE was into InfoVision Award short list

in Broadband World Forum Europe.

CDMA is a traditionally strong area of

ZTE. During 2006 to 2010, ZTE kept

the first position in the shipment volume

of BTSs in the world. By Q2 2011, ZTE

had shipped over 310,000 base stations

accumulatively, has an accumulatedwireless capacity of 300 million lines, and

had been ranked first in global CDMA

market with a global market share of

32.5%. ZTE also has an accumulated

market share of 43.2% of Chinas total

CDMA equipment market, putting it

firmly ahead of the other competitors

in CDMA industry. At present, ZTEs

CDMA products had deployed large-

scale commercial network for over 120

operators in more than 70 countries.

In addition, ZTE had deployed EV-DO

network for over 80 operators in more

than 60 countries including, China, the

United States, India, Indonesia, Czech

Republic etc.

How is ZTE doing in Core

Network?

ZTE is the only provider of core network

solutions supporting all standards in the

industry and kept providing innovative

and optimized core network solutions

and services for wireless access

including GSM/ UMTS/CDMA/TD-

SCDMA/PHS/WiMAX/LTE/WLAN and

wireline access including PSTN/MSAN/

xDSL/xPON/LAN/ intelligent terminal.

ZTEs softswitch (including IMS) products are

in leading position softswitch Architecture

Magic Quadrant 2010 released by Gartner

showed that ZTE Softswitch products

increased continuously, and currently have

entered the Leaders Quadrant. Global IMS

Market 2010 released by iLocus showed

that ZTEs IMS ranked TOP 2 in terms of

comprehensive strength.

In the high speed developing era of mobile

Internet, ZTE owns the future-oriented

intelligent platform ETCA (Enhanced

Advanced Telecommunications

Computing Architecture) and high-end

router T8000, which provides solutions of

advanced ZTE Smart Pipe solution (ZSP),

intelligent user data convergence (UDC),

next generation CS&IMS convergence

network and intelligent network O&M,

etc. so as to help operators build a new

core network with high efficiency, high

intelligence and low cost.



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BUSINESS OPPORTUNITIES IN TD-LTE

ABUNDANT SPECTRUMRESOURCES

The rapid growth in mobile data traffic has

brought new profits to mobile operators

across the world. Statistics show thatdata revenue of Verizon, AT&T, T-Mobile,

Vodafone and other mainstream operators

has increased by an average of 30%.

Therefore, much attention is now being

focused on data and broadband services.

Obtaining more spectrum resources and

increasing spectral efficiency has become

of great importance.

Spectrum resources for Time Division

Duplex (TDD) are abundant. 2.3GHzand 2.6GHz are the most common TD

spectrum bands for TD-LTE, but most

of these bands are not being used.

TDD spectrum resources are available

in many countries and also available for

many operators. Of the 300 operators

who have TDD spectrum resources,

66% own 2.3GHz and 2.6GHz bands.

In addition to the two bands, recently

many operators also pay attention to the

potential frequency resources such as1.9G, 2.1G and 3.5G bands

PROMISING MARKETOPPORTUNITIES

TD-LTE is attracting leading operators

around the world. Many of the top

500 telecom operators own a chunk

of TDD spectrum and are vigorously

pushing forward TD-LTE development.

On February 14, 2011, a Global TD-

LTE Initiative (GTI) was kicked off by 7

operators, including Bharti airtel, China

Mobile, Softbank, Vodafone, Clearwire,

E-plus and Aero2. Till now, 29 members

have joined the GTI organization.

China Mobile owns 2.3GHz and

2.6GHz TDD bands and is leading in the

promotion of TD-LTE. After completing

the fifth phase of its TD-SCDMA network

construction, China Mobile will boast the

worlds largest 3G network with 340,000

TD base stations by the end of 2011.

The operator is expected to call for

bids on the evolution of its TD-SCDMAnetworks in the first half of 2012. Its

commercial TD-LTE network is expected

to be deployed in one to two years.

Mainstream European operators

Vodafone, Deutsche Telekom, KPN and

O2 have all acquired TDD spectrum

and are actively researching TD-LTE

technologies and application models.

Deutsche Telekom completed its TD-LTE

trial network in the second half of 2010

and has started testing the network.

Mobile operators in the U.S. including

AT&T, Verizon, and America Mobil have

promised to support TD-LTE. Leading

operators in Japan and Korea have also

played an active role in promoting TD-LTE.

Other operators with WiMAX, PHS (1900-

1920MHz) and TD-SCDMA will also

choose TD-LTE as their migration path.

TDD spectrum is easy to acquire, and thereis less competitive pressure in acquiring it.

The price of TDD spectrum in each country

is much lower than that of FDD spectrum.

Because FDD spectrum is very limited

and expensive, more and more operators

are considering TDD for feature-rich data

services and hotspot area coverage.

Using time division technique, TD-LTE

allows flexible timeslot allocation in the

downlink and uplink, meeting both voice

and asymmetric data needs and greatly

increasing the spectral efficiency. TD-LTE

can share the same core network with

an FDD system and can support flexible

networking. It can serve as an independent

network for hotspots and blind area

coverage or as a supplement to the FDD

system for data services. TD-LTE has

promising and widespread applications.

FAST-GROWING TD-LTEECOSYSTEM

Driven by operators, standardization

organizations, equipment vendors and

chipset makers around the world, theTD-LTE ecosystem is growing rapidly.

Members of the Next Generation Mobile

Networks (NGMN) Alliance include

various operators including China Mobile,

NTT DoCoMo, Vodafone Orange,

T-Mobile and AT&T as well as 29 mobile

network and terminal suppliers including

Ericsson, Nokia, Samsung and ZTE.

These companies are actively promoting

the standardization of TD-LTE. So far,

3GPP R10 specifications have been

completed, and the standardization

progress of TD-LTE has kept pace with

that of LTE FDD. Testing of TD-LTE

technology and networking organized

by the LTE/SAE Trial Initiatives (LSTI) was

first conducted by China Mobile and has

produced favorable results.

The TD-LTE industry chain has been

established and is growing fast. It

comprises chipset providers, terminalproviders, infrastructure equipment

manufacturers and testing instrument

providers.

All main chipset providers launched 3G/

LTE multimode chipsets in 2011. The

development of LTE chipsets drives the

development of terminal products. So far,

the first multi-mode (TD-LTE/LTE FDD/

UMTS/EDGE) USB dongle is already

released, which will further promote theflexible deployment of TD-LTE.

Equipment manufacturers Ericsson,

Nokia-Siemens, Alcatel-Lucent, ZTE

and Huawei have all developed TD-LTE

series equipment that can be applied in

different scenarios. These products have

been tested in the TD-LTE trials of China

Mobile and overseas operators. At



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BUSINESS OPPORTUNITIES IN TD-LTE

present, the products support 2.3GHz

and 2.6GHz bands and will support

1.9GHz, 2.1GHz and 3.5GHz bands in

the future.

Test instrument manufacturer Anritsu has

announced its MT8820C will support

TD-LTE radio testing. Rohde & Schwarz

and Anite also provide many types of

testing and measuring equipment.

As the industry chain matures,

commercial TD-LTE is just around the

corner.

ZTE LEADS THE TD-LTE

INDUSTRYSmooth evolution

ZTE provides a Uni-RAN solution

based on an innovative SDR hardware

platform. The Remote Radio Unit (RRU)

supports 700MHz, DD spectrum,

900MHz, 1800MHz, AWS, 2.1GHz, and

2.6GHz bands. The Base Band Unit

(BBU) supports GSM, UMTS, and LTE

radio modes, allowing rapid network

deployment. The Uni-RAN solutionenables smooth network evolution while

protecting investment to the greatest

possible extent. This helps operators

significantly reduce their TCO.

Large-capacity base stations

ZTEs single BBU supports up to 18 TD-

LTE cells, each having a bandwidth of

20MHz. The maximum throughput per

cell exceeds 100Mbps in the downlink

and 50Mbps in the uplink. The RRUadopts dual-carrier design and supports

at most 40MHz bandwidth, and can

provide power output of up to 420W.

The RRU also supports multiple modes

for different coverage scenarios. Both

IP over E1 and IP over PE/GE are

supported. Flexible networking and

good scalability helps operators cut their

network construction costs.

Compact and eco-friendly design

ZTEs distributed BBU+RRU enables

simple and flexible zero-footprint

deployment. The BBU has the smallest

size in the industry and can be mountedon a wall or in a 19-inch rack to save

space. The RRU is small and lightweight. It

is naturally cooled, silent, and saves power.

Commercialized and customized

terminals

ZTE can provide customers with various

TD-LTE terminals, including USB dongle,

modem, CPE, module, smartphone, tablet

PC, etc. So far, ZTE has released both

TD-LTE terminals and multi-mode (TD-LTE/LTE FDD/UMTS/EDGE) terminals,

which will help operators to speed up the

progress of commercial launch.

End-to-end full-service solution

ZTE is dedicated to offering TD-LTE products

that meet various deployment scenarios. Its

end-to-end, customized, full-service solution

encompasses services, core networks,

radio systems, and terminals.

Worldwide deployments

With fast growth of the industry chain, TD-

LTE trial networks have been deployed

in China, Japan, India, Russia, Germany,

Ireland, and the U.S. At the same time, ZTE

also has opportunities to help the world-

famous operators to deploy commercial

TD-LTE networks in different countries.

In March 2011, ZTE and China Mobile

worked together to build the large-scaleTD-LTE in Guangzhou. Though facing

complicated wireless coverage scenarios,

ZTE successfully served GTI and NGMN

held in the first half of 2011 and won high

recognition from the operators present

due to its advanced product solutions and

extensive network construction experience.

At the end-2010, by virtue of leading

technologies, ZTE and Hi3G jointly built

the world-largest LTE FDD/TDD dual-

mode commercial network in Sweden.

This network is expected to provide up

to 100Mbps data throughput for users.

Hi3G plans to allocate numbers andrun the network at the end of 2011.

At 2011, ZTE made breakthrough in

Japanese market due to its technologies

and customization capabilities and

became the chief strategic partner

of Japans third largest mobile carrier

Softbank. According to the agreement,

ZTE will help Softbank build the national

AXGP network, which will provide

Japanese users with wireless high-speeddata services. This network is expected

to cover 99% of the population.

In the second half of 2011, the largest

operator in India and the leading

mobile operators in Saudi Arabia

announced that they will work with

ZTE to build TD-LTE 4G networks. The

two projects will help the operators

to further consolidate their leading

position in their mobile broadbanddata service market.

CONCLUSION

The abundant spectrum resources,

technical advantages and flexible

networking features of TD-LTE may be

translated into great market opportunities.

As the industry chain matures, TD-LTE

has promising commercial prospects.

ZTE was one of the earliest players in

the TD-LTE field and has an industry-

leading outlook. With its visionary outlook

and years of TDD experience, ZTE is

developing excellent TD-LTE concepts

and solutions. The company is working

together with operators worldwide to

create higher value and to seize upon new

market opportunities.



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HUTCHISON 3G AUSTRIA, PLAYING A MOBILEBROADBAND MAGIC MUSIC

Fast deployment, HUTCHISON 3G

Austria to be the leader of mobile

broadband

Compared to other operators,

Hutchison 3G Austria is facingstronger market pressure. Hutchison

3G Austria will further enhance the

competition capability by modernizing

the network to provide new services

and reducing operating cost. To swap

1,300 sites is planned to be finished

by the end of 2010 and the whole

network modernization be finished

in 2011. ZTE as the selected vendor

has been closely cooperated withHutchison 3G Austria and quickly

implemented the swap of 1,756 hops

of microwave

and 1,336 sites at the end of 2010.

To appreciate the excellent work ZTE

have done, Mr. Matthias Baldermann,

CTO of Hutchison 3G Austria has

send his appreciation letter and best

regards to ZTE local office. He said,

ZTE team shows us high expertise

and dedication in this area and with

their great support we are looking

forward to finalize all tasks in time.

Based on the excellent contribution

of ZTE project members and their

management we are fully convinced

to make this project a great success

and to help us to improve our network

quality on a constant basis.

Now, in some area, users can enjoy

high-speed mobile broadband and

multimedia services by HSPA+

network. In 2011, all users of the

network can be served with high-

speed service of 43.2Mbps, or even

higher-speed LTE service of 100Mbps.

Hutchison 3G Austria will start a magic

mobile broadband play in the worlds

theatre.



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KPN, IMPLEMENTATION OF BACK TO GROWTH STRATEGY

About KPN

KPN history can be traced back to

1852 when the Dutch government

constructed telegraph lines. From

1994, the government has graduallyprivatized KPN, and finally reduced its

stake to zero in 2006. As of 2004, the

operations of KPN are mainly active in

Dutch, German, Belgian, Spainish and

French telecommunication market.

In the Netherlands, KPN offers fixed

telephone and is the market leader

in mobile phone operations (with

the brands KPN Mobile and Telfort,

also with VMNO brands Simyo, Ay

Yildiz, Ortel Mobile and Hi), Internet

service, and IPTV. Outside of the

Netherlands, KPN operates mobile

phone services as physical operator in

Germany (E-plus) and Belgium (BASE),

and as virtual operator Germany

(BASE, Simyo, Vybemobile and Blau

Mobilfunk), Belgium (Simyo and Ortel

Mobiel), Spain (Simyo and Blau), and

France (Simyo).

Strategy Back to Growth

In 2008, KPN set its strategy as Back

to Growth under such pressures

as regulatory tariff reductions

and shrinking traditional fixed-linebusiness. Year 2009 saw economic

downturn, and KPN announced All-

IP was moving into its final phase in

2010. KPNs ambitions on its mobile

international businesses include

investing in network innovation of

E-Plus to outperforming competition

in growing German market, re-igniting

growth in Belgium with broader

business scope, selective expansion in

Spain and France, and striving to be

the Best-in-Class operator.

High Speed Data Services Launch

To implement its strategy on mobile

operation in Germany and Belgium,

KPN partnered with ZTE in Q4 2009,

relaunched BASE brand in Q1 2010,

acquired valuable spectrum for high

speed data network and highest

capacity in standardized bands in Q22010, commenced accelerated roll-

out of high speed data network in Q2

2010, partnered with low cost Android

smart-phone providers in Q4 2010,

launched high speed data services

in first 9 urban areas (Germany) and

6 urban areas (Belgium) in Q4 2010.

After 2010, KPN will further exploit

mobile data opportunities on regional

basis. Until Q4 2012, 12k HSPA+ sites

will be in place in Germany with speed

of 21.6 Mbps.

Strategic Partnership with ZTE

By 2012, ZTE will swap existing near

6,000 Ericsson and NSN BTSs over

Germany and Belgium. Mr. Thorsten

irks, CEO of E-Plus, commented

on strategic partnership with ZTE:

ZTE is a challenger in the European

market and as such fits very well with

E-Plus Challenger strategy. ZTE

proposed solution has the following

advantages:

Easy deployment

Distributed BTS can reduce the

network deployment time. By installing

RRUs near antenna, less feeder loss

and better coverage can be achieved.

BBUs can be inserted into legacy

racks to save the space.

Smooth evolutionThe whole network can be seamlessly

upgraded to support MIMO and LTE.

Technical knowledge transfer ZTE

engineering training center in Germany

with systematic training scheme for the

third party will provide onsite support,

training and knowledge transfer to

KPN.

Smaller size

Base Station Size (H*W*D mm)

Ericsson RBS3106/RBS2106 1614*1300*710

NSN 2G outdoor Ultrasite BTS 1940*770*750

ZTE 2G/3G dual mode outdoor BTS BS8900A 1700*600*600



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cloud og final lr

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