News Brief

ZTE Awarded the Best Practice Award2010

Competitive Product for Packet Transport
Network Industry Accolade By Frost & Sullivan
9 September 2010, Shenzhen
ZTE today announced it has won the
prestigious Best Practice Award
2010 Competitive Product for Packet
Transport Network Industry. The
accolade was awarded to ZTE by Frost
& Sullivan, a world leader in growth
consulting company. Winning this
award is a direct recognition of ZTEs
contribution to the PTN field. This is
the second time ZTE has won one of
the celebrated Best Practice Awards
following receipt of the Best Practice
Award2009 IPTV Equipment Vendor
of the Year in 2009.
Based on its research in 2009, Frost
& Sullivan believed that with the
acceleration of the commercialization
of PTN, this market is beginning to
take shape. Based on its unique market
engineering method, Frost & Sullivan

conducted a comprehensive evaluation

of the PTN market, organizing an
expert panel to evaluate the overall
strengths, market share, technical
strengths and product advantages
of a number of mainstream vendors
in the industry including ZTE.
With its significant advantages in
PTN technologies and commercial
deployment, ZTE won the honor.
Since starting its PTN standard
research and product development
in 2004, ZTE has submitted 118
proposals, 164 invention patents and
13 basic patents related to international
standards to organizations including
IEEE, ITU-T, and IETF. ZTE is a key
player driving the development of
PTN technologies and industry supply
chains.
ZTE was the first in the industry

to introduce an entire range of PTN

products, covering the entire network
from the core layer to the access layer.
All five of ZTEs PTN products have
powerful networking capability and
application support capability, enabling
support for the most accurate and
refined time synchronization solutions
in the industry. The large capacity and
low power consumption design can
fully meet the green evolution needs of
networks as well as their core business
needs.
As the industrys first-class PTN
solutions provider, ZTE has entered into
in-depth partnerships with operators
across the globe, with solutions widely
adopted in many countries and regions
including Finland, The Republic of
Montenegro, Brazil, Malaysia, and
Vietnam. In the Phase-1 PTN project
for China Mobile, ZTE has successfully
delivered commercial PTN networks in
27 provincial regions including Beijing,
Shanghai, and Guangdong.
According to the Market Share:
1Q10 optical networks, global and
regional report by leading market
research firm Ovum, ZTE continued
to maintain fast growth in the optical
networking market and was already
one of the global top 3 players in terms
of market share. PTN has become a
key driver for ZTE in the deployment
of next generation optical networking
technologies, in order to excel in the
marketplace.

www.zte.com.cn

A Monthly Publication

Vol. 12 No. 10 Issue 129 October/2010

P3

Press Clipping
Mobile Data Demand Will Expand Market for TDD, Says
ZTE Head
An exclusive interview with Shi Lirong, CEO of ZTE, by
leading industry magazine Global Telecoms Business

Focus

P7

Building Profitable Bearer

Networks

P12

ZTE seeks to work with operators to

build profitable and evolvable bearer
networks through sound solutions,
quality equipment, and first-class
service

P10

Cluster Routers: The Best Choice

for Future-Oriented Backbone
Networks
The reliability, scalability, and energy
efficiency of an IP backbone network
gives operators a distinct market
advantage

A Reconfigurable Gateway for the

Coexistence of PTN and MSTP
Considering the long-term coexistence
of 2G and 3G, the best way to
capitalize on existing network
infrastructure is to carry 2G voice
services over SDH, and 3G and EOS
services over PTN

P14

Promonte Leads with All-IP

Transformation
The successful implementation of
the Promonte project helped the
company improve the quality of its
mobile bearer network

Interview

Editorial Board

Rooted in China: Stepping Forward to World-Class

Excellence

16

Editor-in-Chief: Jiang Hua

Deputy Editor-in-Chief: Huang Xinming
Editorial Director: Zhao Lili

An interview with Zeng Xuezhong, Senior Vice

President of ZTE Corporation

Executive Editor: Yue Lihua

Editor: Paul Sleswick
Circulation Manager: Wang Pingping

Third Eye

20

Future-Oriented IP Services Boost Operators

Ability for Service Delivery
ZTE is expected to succeed in gaining access to the
high-end optical network equipment market with the
introduction of ZXONE 8000

Subscription / Customer Services

Subscription to ZTE TECHNOLOGIES
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Tel: +86-551-5533356
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Email: wang.pingping@zte.com.cn
Website: www.zte.com.cn

P21

P24

Editorial Office
Address: NO. 55, Hi-tech Road South, ShenZhen,
P.R.China
Postcode: 518057
Tel: +86-755-26775211
Fax: +86-755-26775217
Email: yue.lihua@zte.com.cn

Research Note
LTE-A Leads Future Wireless Communications
By introducing key techniques including Carrier
Aggregation (CA), enhanced MIMO, relay, and
Coordinated Multi-Point Tx/Rx (CoMP), LTE-A can
meet or even surpass all IMT-A requirements

21

ZTE Profile
ZTE is a leading global provider of
telecommunications equipment and network
solutions. It has the widest and most complete
product range in the worldcovering virtually

Business Model Analysis of Managed Services

24

Managed services are driven by the transformation of

telecom operations in terms of financial targets, business
performance, deployment capability, management
optimization, and risk transfer

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 achieve continued
revenue growth and shape the future of the
worlds communications.

27

News Brief

ZTE TECHNOLOGIES

October 2010

Press Clipping

Mobile Data Demand Will Expand

Market for TDD, Says ZTE Head
September 29, 2010
Source: Leading industry magazine Global Telecoms Business (September/October 2010 issue)

he new president and CEO of ZTE

is enthusiastic about the future
of Chinas home-grown version
of 3G mobile technologyand its LTE
upgradeas a way of tackling the huge
strain that data services are putting on
mobile networks.
Shi Lirong, the 46-year-old
telecommunications engineer who took
over at the top of ZTE at the end of March
2010, believes that many of the 500
operators that already have time-division
duplex spectrum will consider migrating to
the TD version of LTE.
The technology can bring new value
to operators, says Shi, in an exclusive
interview with Global Telecoms Business.
TDD spectrum is valuable and the TDD
spectrum is cheaper, he adds.
Some operators are already deploying
the more usual frequency-division duplex
version of 3G and then LTE, but, says Shi,
because of spectrum limitations they are
considering TDD spectrum for their data
services.
China Mobile pioneered TD SCDMA,
a TDD version of 3G technology that was
invented in China.
When Chinese telecoms operators
were reorganized in 2008, each of the
three companies was allocated a different
3G technology: China Unicom got
conventional WCDMA, as used in most of
the world.
The Chinese government told China

Shi Lirong: innovative software-defined radio is

a unified platform for 2G, 3G and 4G LTE

October 2010

ZTE TECHNOLOGIES

Press Clipping

Telecom to use the Qualcomm version

of 3G, and China Mobilethe biggest
operator in the worldwas allocated
TD SCDMA.
There was some cost to China
Mobile, as the then CEO, Wang
J i a n z h o u , t o l d G l o b a l Te l e c o m s
Business in 2009: TD SCDMA did not
have the volume advantages that would
drive cost down.
But the sense of the industry
appears to be shifting in favour of
TDD, as customers around the world
start to use mobile broadband at levels
few ever expected.
And the attraction of TDD is that it
is efficient for data, which tends to flow
unequally upstream and downstream.
The system can dynamically adjust the
timeslots for each direction, freeing
space for other users.
There are lots of new
opportunities with TDD, says Shi,
who was in charge of ZTEs sales and
business development operations for
11 years until his promotion earlier this
year. He started out as an engineer, with
a masters degree in telecommunication
and electronic system engineering
a s w e l l a s a m a s t e r s d e g r e e i n
engineering.

Focused on Innovation

Is it engineering that excites him, or

the prospects of sales for ZTE? Both,
it seems. We are more innovation
focused: we can bring propositions to
our partner operators, he says, neatly
straddling both.
Our innovation is oriented to
market needs and oriented to the needs
of our customers, he says. We believe
in the future if ZTE wants to lead the
telecoms industry. This strategy is the
number one priority.
But he swiftly moves on to his
second priority for his leadership of

ZTE TECHNOLOGIES

October 2010

the company: market share. Currently

more and more operators know that
ZTE has good technology and good
total cost of ownership, and we can
deliver, he says. The company can
execute on the projects on which
it works, he says. We have very
competitive products now, so we hope
we can grow more market share.
This is the result of high spending
on research and development, he says:
consistently about 10% of turnover.
Revenue was $4.5 billion in the six
months ending June 30 2010, according
to the companys results published in
August, and was increasing by more
than 10% a year. Profit in the first half
was $129 million, a rise of 12% year
on year.
That means that annual spending on
R&D is getting close to $1 billion. We
have a huge R&D investment, says
Shi. We can develop lots of innovative
products.
About 10% of that R&D spend is on
forward-looking research, he noteson
projects such as next generation basestations and network.
ZTE has a patent portfolio of over
30,000 patents in China and 4,100
patents overseas, covering 2G, 3G
and 4G, including what it says are
essential patents in LTE and UMTS.
In 2009, ZTE says it ranked number
one in patent applications in China, and
it tripled the number of international
patent applications.
One result of this investment has
been the companys software-defined
radio equipment, says Shi.
This is a system that allows an
operator to hedge its bets on when
demand for 3G will start to overtake
the need for 2G base stationsand
when, in turn, it will need to ramp up
4G services. The answer, according to
ZTE, is to install a single standard of

hardware and put the difference in the

software.

Software-Defined Radio

Its a unified platform for 2G, 3G

and 4G LTE, he says. We are the first
company to develop and deliver this
software-defined radio equipment.
CSL, Telstras mobile business in
Hong Kongconveniently just a few
kilometres from ZTEs headquarters
in Shenzhen in southern Chinais
an enthusiastic user of the vendors
SDR, but there are others, says Shi,
listing South African operator Cell-C,
Portugals Sonaecom and KPN of the
Netherlands.
SDR is even more flexible than just
providing the ability to move through
the GSM family of technologies. We
can even combine CDMA, WiMAX
and TD-SCDMA in the same platform,
smiles Shi. So, if a WiMAX operator
wanted to do so, it could consider a
move to the TDD version of 3Gan
intriguing possibility.
The company makes WiMAX
systems, which are also TDD: it has,
for example, supplied Telefnica with
equipment for one of the first WiMAX
networks in Spain.
More and more people are
considering the TDD spectrum, as FDD
can be very limited and expensive,
says Shi. With more data focus and
broadband focus, operators need
more spectrum resources, so people
are considering TDD for wireless
broadband.
When the reorganization of Chinas
telecoms operators was completed in
2008, it had taken a long time to sort
out, leaving all three some way to
catch up with the rest of the world in
3G operations. But that meant they all
invested heavily and quickly in 3G
and ZTE was a huge beneficiary.

Volume Advantage

The smartphone
is still priced too highly.
People are asking what
will be next after Apple.
I think ZTE can provide
this.

We got the number one market

position in Chinese 3G, mainly because
ZTE is more competitive in technology
and total cost of ownership, says Shi.
It is competing in China with all
four of its international rivals: Huawei
is Chinese; Alcatel-Lucent has its own
Chinese subsidiary, Shanghai Bell;
and both Ericsson and Nokia Siemens
Networks have a significant presence in
China.
There are five vendors and all
five vendors compete, says Shi. But
ZTE claims to have won the five-way
battle in terms of market share. The
three operators all assessed the network
quality and ZTEs performance is the
best with the three operators, he says.
Best on what basis? For example,
China Unicom calculates factors such
as power consumption and so on.

This success in the first 3G

investment phase gave us a volume
advantage and therefore we became
more cost effective and more
experienced in 3G, he adds. So we
will get more chances in the second
phase and the third phase.
Thats given ZTE a good market
share in its homeland, and no doubt
helped with volume efficiencies
worldwide. In Asia Pacific our market
share is high, says Shi. And he has his
eye on other parts of the world: I hope
in the near future in big countries
Brazil, Russia, South Africa, Nigeria
we will get higher market share.
In the developed world, ZTE has
had a number of successes, but its
probably fair to say that the company
has not achieved the same sort of
market share as it has in the Asia
Pacific region and other emerging
markets. In Europe and North America
there is big potential, Shi accepts.
Politics possibly plays a part. Both
ZTE and its Chinese rival Huawei
and they are fierce rivalshave had
political opposition in the US, but Shi
is quick to respond that ZTE is a public
company, with shares quoted on two
stock exchanges.
We are a listed company, not
only in Shenzhen but also in the Hong
Kong region, he says. Everything is
very strict, as we follow Hong Kong
regulations. Its more transparent and
more regulated.
Around 21% of ZTEs shares are
foreign owned, he adds, and in 2010
the company appointed an American as
an independent board member. This is
Timothy Seifert, a former Freshfields
lawyer who is general counsel of
Alibaba, a Chinese online trading
company. We are quite confident
that ZTE is a very different Chinese

October 2010

ZTE TECHNOLOGIES

Press Clipping

company, says Shi.

China has also changed, like ZTE
has changed from a small company to
a big company. Our thinking has also
changedthats very important, he
adds.
So in the US, ZTE has started
slowly. The ZTE corporate motto
is step by step, he notesthough
a more formal corporate slogan is
bringing you closer.
It has started its approach in the US
with handsets and terminals. It was two
years hard work, he notes, but that
was the right strategy, which appears
to have paid off. Now the main
operators are choosing ZTE for the
devices, he says. We have delivered
handsets to Verizon.
In the longer term ZTEs ambition is
to provide an affordable smartphone,
says Shi. The smartphone is still
priced too highly. People are asking
what will be next after Apple. I think
ZTE can provide this.
But meanwhile the next step in the
step by step approach to the US market
is to approach the networks, he
continues. We have some successful
middle and small operators. Next
step, we hope we can get into tier one
operators.

Tier One Customers

Tier one is the clear goal. Our

strategy is focused on the big countries
and the big operators, multinational
operators like MTN, Bharti, Vodafone,
France Telecom, he says. We are
more focused on those operators.
The company is very careful
when dealing with smaller operators
and, he added, in India we are
very careful because there will be
consolidation. There are many
operators fighting for market share in
India.

ZTE TECHNOLOGIES

October 2010

ZTE doesnt completely avoid

small companies, though. In June 2010
the company signed a deal with a small
Canadian start-up operator, Public
Mobile, to design, build and operate
an end-to-end CDMA network which
includes wireless, core network, service
platforms and IP architecture. ZTE will
also deploy over 1,000 base stations for
the network.
That deal, said at the time to be
worth $350 million, was funded by
the Export-Import Bank of China.
When you provide the equipment
and the technical solution, sometimes
we provide a package of financial
facilities, says Shi. This can bring
value for operators. We have lots of
different financial partnersChinese
and European banks.
A financial package is not standard,
but sometimes we can provide a
package if the operator needs it, he
notes. Customers also have their
own channels for finance and they
evaluate the financial costs, but if we
can provide this we like to do so. Its
an option for our operators. He adds:
We are a listed company and we have
very strict regulations on risk control.
The design, build and operate part
of that Canadian contract is intriguing
too. Managed services are a very
important strategy for ZTE, says
Shi. We dont announce very much
about it, but we have already provided
services in many countries.
The company has 2,000 people
providing managed services in different
countries over the last three or four
years, he adds. We employ some
very professional people.
Shi lists MTS in Indiathe joint
venture between Shyam of India and
Sistema of Russiaas well as another
Indian company, Idea Cellular, and
Cell-C in South Africa as managed

services customers. We believe we

can see a very high potential in this
area, with more and more networks,
adds Shi.
Z T E s c o n t r a c t s a r e m a i n l y
greenfield, where we have built the
network, but some we take over, along
with the existing operational staff, he
notes.

Management Efficiency

Meanwhile, ZTE is as focused as

most other vendors on trimming costs.
The company wants to optimize
our internal management, he says:
Cost saving is also very important.
He means internal cost saving, by
optimizing its structure. ZTE has to
reorganize our structure to be more
flat and more effective.
That means he will be setting
clear goals for different departments
in the company, and assessing their
performance. He wants to save money
on travel by making more use of IT and
telecoms. Globally we have 400-500
videoconference terminals. We dont
need to travel.
Where next? The bringing
you closer slogan Shi mentioned
earlier is intended to reflect ZTEs
corporate high concern for humanity,
the companys global vision and
insight, the value of dedication to the
development of the communications
industry. Top issues include corporate
social responsibility, green technology,
carbon reduction, solar powered
handsets and green technology for our
customers, says Shi.
We need to bring ZTE propositions
to the operators, to the people, to the
community. Thats very important.
With R&D, technology, products,
service, we hope we can contribute to
the community. Thats very important.

Focus

Building Profitable
Bearer Networks

By Han Lijin and Chen Jianye

s networks converge and mobile Internet,

Internet of Things, and Cloud Computing
become prominent, bearer networks
will need to be capable of high bandwidth, QoS,
expansibility, and reliability. In the face of growing
competition, network operators must reduce bit
cost, realize efficient and reliable transfer of packet
services, improve user satisfaction with broadband
services, create new services and rapidly deploy
them, and construct low-cost TCO bearer networks
to recover costs. These are the considerations when
constructing a bearer network.
Low TCO, high benefits, and sustainable
development are particularly important in network
construction. With this in mind, ZTE foresees
seven development trends for bearer networks.

October 2010

ZTE TECHNOLOGIES

Focus

ZTE adopts the latest technical standards

to accommodate the seven development trends
of bearer networks, and to coincide with the
focal points of operators constructing networks.

The company senses the pulse of full

service operation, and is dedicated
to providing end-to-end network
solutions.

Development Trends of Bearer

Networks

Development trends in bearer

networks include flat structure,
convergence, broadband, packet
transport, optimized operation and
management, evolution towards IPv6,
and energy efficiency.
Flat structure
Flat network structure implies
a s i m p l i f i e d n e t w o r k h i e r a r c h y,
converged control layer, and unified
OAM. Construction costsincluding
costs for transfer interfaces between
equipment layers, and investment
in machine rooms, transport, and
power suppliesare lowered, as are
maintenance costs. A flat network
structure also reduces the risk of
network failure so that user satisfaction
is guaranteed.
Convergence
A converged network comprises
unified backbone network technology
a n d c o n v e rg e d s e r v i c e g a t e w a y.
In the backbone forwarding layer,
converged IP and optical transport
layer technology is the development

ZTE TECHNOLOGIES

October 2010

direction; in the backbone control layer,

Generalized Multi-Protocol Label
Switching (GMPLS) technology with
converged data and optical transmission
is the development direction (because
network resource use and distribution
is optimized). Service gateway
convergence implies the convergence
of Service Router and Broadband
Remote Access Router (SR+BRAS)
in a fixed-line environment, and
convergence of SR, BRAS and xGW
(SR+BRAS+xGW) in a full-service
environment. This effectively cuts
down network TCO.
Broadband
Market competition, service
expansion, and technological
advancement drive the development of
broadband bearer networks. Operators
agree that bearer networks must have
high bandwidth. Service expansion has
mostly been driven by wireless Internet
services and fixed video services;
and as a result, bandwidth demands
for fixed and wireless networks have
grown rapidly. Bearer networks with
higher bandwidth therefore need
to be constructed for operators to
become much more competitive.
Technological advancement depends
on the progress of microelectronic
technology, the improved capacity of
optical transmission equipment, and the

rapid development of broadband access

technology.
Packet transport
A broad technical consensus has
been reached that telecom services
should be IP based. Traditional fixed
telephony is evolving to VoIP, and
mobile networks are also evolving to
all-IP. With the trend toward packet
services, packet transport networks
with packet interfaces and packet cores
are inevitable. The packet interfaces
must support not only traditional
E1/STM-N interfaces but also FE/
GE/10GE/40GE/100G interfaces, and
the network core must adopt a packet
design to utilize bandwidth efficiently
and to better support various packet
characteristics.
Optimized operation and
management
Optimized operation and intelligent
management improves network
profitability, and helps in situations
where profits are falling or growth in
the user base has slowed. Intelligent
management involves using a unified
network management system for
rapid service deployment, centralized
performance monitoring, and accurate
fault locating. Optimized operation
aims at offering differentiated services
through service segmentation and real-

Access

MAN

Backbone
PE

RNC

Telecom Plane
VIP

BMSG

CDN

PTN

CTN6000

CDN

Service

IGW

ISPA

CR/P

CTN9000

ZXR10 T8000

Base station

T1200/M6000

DHCP/
BSS/
DNS NMS AAA OSS

PE
Internet
MGCF/IM-MGW

MAN

SBC

ZXR10 5900

HG SW/ONU

SW/OLT
SW/OLT

FTTB/C

Public Plane

OAM
ISPB

ASBR

ZXR10 T8000

CSCF

ASBR

IPTV

ZXR10 8900
OTN

OTN

ZXMP M720

IMS

ZXMP M820
ZXONE 8000

OTN/WDM

ZXMP M920
ZXONE 8000

IDC

GGSN

Figure 1. ZTEs end-to-end bearer network solution.

time network resource control so that

quality value-added services can be
provided.
Evolution towards IPv6
As the Internet expands and
demand for IP addresses by new
services such as the Internet of Things
grows, the number of available IPv4
addresses is rapidly decreasing. An
address bottleneck will therefore
ensue, and the need to introduce
IPv6 is pressing. The IPv6 industrial
chain is nearing perfection after
several years development, and IPv6
network equipment is now coming into
commercial use. The era of widespread
commercial use of IPv6 is fast
approaching.
Energy efficiency
Energy conservation, emissions
reduction, and environmental protection
have become strategic goals of most
countries around the world. With
such high energy consumption, the
communications industry recognizes

that environmental awareness must be a

core value. Domestic and international
operators have set targets for energy
saving and emissions reduction. This
protects the environment, cuts costs
for the operator, and strengthens
commercial competitiveness.

A Profitable End-to-End Network

Solution

ZTE adopts the latest technical

standards to accommodate the
seven development trends of bearer
networks, and to coincide with the
focal points of operators constructing
networks. ZTEs end-to-end bearer
network is the solution to building
a profitable network. As shown in
Figure 1, CTN9000/6000 is deployed
in the access and aggregation layers
of telecom planewhich adopts
1588v2/G.8261 high-precision
clock synchronization and MPLSTP technologies to create a packet
transport network. ZXR10 8900 carrierclass series switches are employed in
the aggregation layer of public plane

to realize convergence. ZXMP M720

(OTN equipment) should also be
deployed in the MAN layer to save
fiber resources. In the service control
layer, an advanced converged gateway
M6000/T1200 improves reliability
of the network by introducing highly
reliable backup technology. In the
MAN backbone layer, a flat broadband
network is constructed using ZXWM
M920 (40G/100G high-capacity
OTN equipment) and ZXR10 T8000
(high-end cluster router support
16+64 chassis cascade). In terms of
network operation and management,
the NetNumen platform is used for
quick end-to-end service deployment,
and GMPLS technology is used for
convergence of support networks in the
control plane of the bearer network.
IPv6 is also used for smooth evolution
to NGN.
ZTE seeks to work with operators
to build profitable and evolvable bearer
networks through sound solutions,
quality equipment, and first-class
service.

October 2010

ZTE TECHNOLOGIES

Focus

Cluster Routers:

The Best Choice for Future-Oriented

Backbone Networks
By Zhu Haidong

t took only ten years to increase

the interface rate of a router from
2.5Gbps to 10Gbps, 40Gbps and
even 100Gbps. Changes in the Internet
have proceeded rapidly and have gone
well beyond what could have been
imagined. The Internet has developed
from a simple data carrier to a central
part of the information infrastructure of
whole societies. And the IP backbone
network, a pillar of the Internet, is now
required to bear an increasing amount
of data traffic.
As the growth of IP services
continues to boom, data within the
backbone network becomes more
c o m p l e x . I P T V, Vo D , a n d P 2 P
traffic places greater demands on
the scalability and reliability of the
network.
Reliability and self-healing
To d a y s I n t e r n e t c o m p r i s e s a
countless number of operator nodes.
The stability of operator backbone
networks not only influences the
networks and services run by operators

10

ZTE TECHNOLOGIES

October 2010

themselves, but also the entire

Internet. Considering the vast ocean
of data exchanged over the Internet
in real time, even a small failure can
result in multi-million dollar losses.
Therefore, IP backbone networks must
be self-healing, highly reliable, and
capable of automated troubleshooting
and recovery in the event of sudden
abnormality. Such networks must also
guarantee availability under normal
operation.
Scalability and growth
The IP backbone network is a
scalable network. Internet traffic
doubles every 12 months, with IP
traffic growing exponentially. With
the rise of mobile broadband access,
video and interactive services, and
new network services, the growth of
traffic carried over the IP backbone
network is expected to accelerate
rapidly. Backbone networks must
therefore have excellent scalability to
counter the skyrocketing amount of
data. If scalability is not addressed,

investors will not be able to transform

their existing commercial networks
to suit their business growth, and
in full accordance with an ideal
network structure plan. Additional
nodes will add complexity to a clear
and neat network, which in turn will
impact service support and network
maintenance. Nodes should guarantee
reliable continuation of services under
a non-optimal network structure, and
provide more flexible, intelligent
service control capabilities. Such
requirements are part of the growth of
a network.
Full-service bearer
The IP backbone network is also a
converged network that bears many
kinds of services. Today, almost all
services are based on TCP/IP, and
all applications can be provided on
a uniform network. Bearer networks
are converged at all layers, and the IP
backbone network is the starting point
on the path to convergence.
By rapidly responding to market

demands, ZTE has introduced the

ZXR10 T8000 carrier-class router
which is designed to meet current and
future service needs. It supports 16+64
chassis cascade, and is suitable as the
Internet core node, backbone network
super node, and egress of a large
MAN. ZXR10 T8000 is an ideal choice
for operators aiming to build a flat
network and looking toward the long
term evolution of their uniform bearer
network.
Multi-level assurance
To ensure the backbone network
is reliable, ZXR10 T8000 provides
technical assurance in three aspects. It
applies Non Stop Routing (NSR), hot
patching, and In-Service Component
Upgrade (ISCU) technologies for
dynamic loading of functions. Using
active/standby switching of inter-frame
logical entities, a single router and
a cluster of routers can be expanded
smoothly without causing interruption
to running services. For the numerous
routing table entries and complicated
forwarding relations in a backbone
network, ZXR10 T8000 adopts
distributed processing, routing filtering,
and protection mechanisms to rapidly
screen failed nodes. This eliminates
routing instability and maintains
stable forwarding relations between
the nodes. ZXR10 T8000 also assures
reliability at five levelssystem
architecture, equipment components,
operating system, protocol processing,
and message flowsto ensure steady
operation with 99.999% availability.
Ultra-large capacity cluster
Scalability of an IP backbone
network can be improved by increasing
the capacity of a single device,
changing the network structure with
distributed network layers where
multiple devices are deployed in one
node, and placing multiple routers

NOC

2G/3G

Backbone

IPTV

IMS

NGN

EPC

Metro
ISP Peer

IDC

Figure 1. ZTEs IP network solution.

into a cluster. Clustering is a cheaper

way of meeting demands of service
growth, network performance, and
capacity expansion without creating
additional network complexity. ZXR10
T8000 supports multi-chassis cascade
and linear capacity expansion. The
switching capacity can reach up to
200Tbps. At present, the ZXR10 T8000
line card provides a 100Gbps wirespeed port at each slot that supports
smooth upgrade to 400Gbps.
Independent intellectual property
rights
ZTE owns independent intellectual
property rights for ZXR10 T8000. Its
ZXROS system is a modular multiprocess system. Using differentiated
kernel and user mode, independent
component process space, and full
distributed processing, it enables
the operating system to be open and
reliable, and paves the way for multiservice bearing and control. After years
of research and development, ZTE has
made breakthroughs in top-class router

chipsets, and has built its own chip

system that provides for continuous
evolution of equipment and technology.
Energy conservation
By applying energy-saving
technologies such as smart power
supply, smart dormancy process, smart
service adjustment, smart line-card
startup, and smart fan control, ZXR10
T8000 is energy efficient and consumes
23% less power.
Backed by a full product range,
and drawing on years of network
construction experience, ZTE can
provide a total IP network solution with
well-defined architecture, as shown in
Figure 1.
An IP backbone network employing
ZXR10 carrier-class routers provides
independent service access layers,
differentiated SLA, and security
assurance, thereby meeting the needs
of operators. The reliability, scalability,
and energy efficiency of such a network
gives operators a distinct market
advantage.

October 2010

ZTE TECHNOLOGIES

11

Focus

A Reconfigurable Gateway for

the Coexistence of

PTN and MSTP

By Zhao Yue

Challenges for Operators

s 3G mobile services develop

a n d d e p l o y m e n t o f LT E
networks rapidly approaches,
a next generation Packet Transport
Network (PTN) technology is necessary
for operators to reduce TCO and enhance
the competitiveness of their mobile
broadband networks. Since conventional
SDH networks will coexist with IPbased networks for some time to come,
smooth evolution from SDH to PTN is a
key issue that needs addressing.
Considering the long-term coexistence
of 2G and 3G, the most simple way
to capitalize on existing network
infrastructure is to carry 2G voice
services over SDH, and 3G and EOS
services over PTN. To accommodate the
expansion of 2G services, 2G BTSs must
be built or EOS services swapped from
SDH to PTN.
When PTN is used to bear services at
the new BTS side, there may not be any
idle STM-1 interface at the BSC side
for connection with PTN. As a result,
services sent from BTS to BSC may not
be transmitted through equipment at the
PTN core layer, but rather through the
original 10G/2.5G MSTP at the core
layer.
Because EOS services are transported
over SDH, substantial bandwidth is

12

ZTE TECHNOLOGIES

October 2010

consumed. If these services are swapped

to PTN, which is more suitable for data
service bearing, more SDH bandwidth
resource would be available for 2G
services.
To make full use of bandwidth
resource in MSTP and to address the
above networking issue, a PTN and
MSTP hybrid networking solution
(see Figure 1) is a good solution. The
following issues must be considered:
How to enable cross-domain traffic
transfer between BTS and BSC
How to provide cross-domain endto-end (BTS to BSC) protection
How to realize cross-domain NMS
interconnection between PTN and
MSTP

BSC

How to convert OAM information

between PTN and MSTP

Non End-to-End Interconnection

Solution

PTN and SDH implement pseudowire decapsulation through the STM-1

or STM-4 interface and the original E1
signals are recovered for transmission.
Because MSTP and PTN belong to
two separate ringsPTN access ring
and MSTP convergence ringthey
perform intra-domain traffic scheduling
respectively. Traffic from BTS to BSC
is configured separately for network
management. E1 to VC12 end-to-end
traffic is configured for PTN, while
VC12 to VC12 end-to-end traffic is
PTN

RNC

MSTP

Optical
Interconnection

Original MSTP
Convergence Ring

PTN Convergence
Ring

New NodeB

Original MSTP
Access Ring

BTS

New PTN
Convergence Ring

Original PTN
Access Ring

New PTN
Access Ring

NodeB
NodeB

NodeB

Figure 1. PTN and MSTP hybrid networking.

NodeB

New BTS

New BTS

configured for MSTP. The MSTP and

PTN rings are independently protected.
A non end-to-end interconnection
solution (see Figure 2) is easy to
implement and deploy on the existing
network. No alteration to existing PTN
and MSTP is necessary. However,
the solution has high risks in network
topology. Single node failure may occur
between the PTN access ring and MSTP
convergence ring, and this may lead
to service discontinuity between BTS
and BSC. Moreover, the solution fails
to provide end-to-end protection, endto-end OAM, or NMS interconnection
b e t w e e n P T N a n d M S T P. A n y
network failure entails layer-by-layer
troubleshooting. This affects rapid fault
locating, recovery, and QoS.

Reconfigurable Gateway Solution

ZTE has launched a reconfigurable

gateway solution for interworking
between a newly-built PTN and existing
MSTP. The solution provides unified
NMS, service and OAM information
conversion, end-to-end protection,
and clock synchronization. These help
operators integrate existing resources and
realize smooth evolution of networks (see
Figure 3).
In China Mobiles 2G/3G backhaul
network, MSTP was first deployed at
the convergence layer where there is
redundant bandwidth. At the access
layer, where bandwidth is scarce, a
new PTN has to be built. To protect
China Mobiles initial investment, ZTE
supplied a reconfigurable SDH gateway
for MSTP and PTN hybrid networking,
which allowed the transfer of both 2G
and 3G services.
ZTEs reconfigurable gateway
solution has advantages over a traditional
tunnel solution:
Low cost and easy deployment: The
reconfigurable SDH gateway has

PTN

MSTP

RNC

BTS

PTN Access/
Convergence Ring

MSTP Convergence/
Core Ring

NSTM-1/4

BSC
NodeB

Figure 2. Non-end-to-end interconnection.

Packet Access Domain

MSTP Convergence Domain

SDH Gateway Card

C.STM-1
NE1
BTS

NE1

PTN

MSTP

FE
NodeB

BSC
FE/GE

OAM Interworking / Synchronization Information

Exchange / Coordinating Protection

RNC

Active LSP
Standby LSP

Unified NMS

Figure 3. Reconfigurable gateway solution.

low-cost hardware that meets high

technical requirements. It can be
easily deployed with no change
to MSTP topology and without
impacting existing traffic.
Cross-domain traffic transfer: PTN
supports a reconfigurable SDH
gateway. After PTN simulation,
TDM traffic is converted into E1
signals, which are first transferred
to PTN gateway nodes, then to
MSTP through the STM-1/4 SDH
interfaces, and finally to BSC. In this
way, traffic encapsulation overhead
is saved and bandwidth utilization is
increased.
End-to-end OAM: A reconfigurable
SDH gateway makes it possible
to convert PW alarms in the PTN
domain into VC12 alarms in the
MSTP domain, and vice versa. This
helps implement end-to-end alarm
management, and end-to-end OAM
of network devices of different
vendors.
End-to-end protection: End-to-end
protection can be realized through

SDH protection and PTN protection

as well as interoperability of PW 1+1
protection and MSTP VC-12/VCG
1+1 protection.
Cross-domain NMS interconnection:
The interworking of Data
Communication Network
(DCN)PTNs NMSand Data
Communication Channel (DCC) of
MSTP allows fast fault locating and
recovery.
The reconfigurable gateway solution
meets customer requirements for
high performance, low cost, and low
power consumption. It supports easy
and flexible deployment in the newlybuilt PTN without impacting existing
services, and provides reliable end-toend protection, rich OAM functions,
fast troubleshooting, and convenient
end-to-end management. Because EOS
services are smoothly swapped to PTN,
SDH bandwidth resources are saved for
bearing 2G voice services, and this helps
operators protect their investments in
SDH.

October 2010

ZTE TECHNOLOGIES

13

Focus

Promonte Leads with

All-IP Transformation
By Li Lei

We are very
happy to establish this
new partnership with
ZTE and together build
a future-proof network
which will benefit both
Promontes customers
and the environment.
Christopher Laska,
Promonte CEO

14

ZTE TECHNOLOGIES

October 2010

ontenegro is located in
southeastern Europe and
has a coast on the Adriatic
Sea. With its picturesque coast and
a mountainous northern region, the
country is a popular tourist destination.
The Telenor Group, headquartered in
Norway, is the sixth largest provider of
telecommunications services worldwide,
and its subsidiary, Promonte, is
Montenegros largest mobile operator.
Promonte is 100% owned by Telenor
and its mobile subscriptions account for
50% of the population. As Montenegos
tourism industry has developed, its
mobile market has grown rapidly so that
mobile penetration now exceeds 200%.
Promontes networks were costly to
maintain and did not support smooth
upgrade to LTE, so the company decided
to upgrade its existing network to grow
and consolidate its market share. After
a vigorous selection process by Telenor
and Promonte, ZTE was chosen as
the sole vendor for the upgrade of the
2G/3G network (with some sites being
upgraded to LTE in 2013). ZTE supplied
high performance IP Transport Network

(IPTN) products for construction of the

bearer network.
ZTEs new generation SDR base
stations were installed to replace the
original ones, and a plan was made
to deliver LTE services by 2013.
This represented an evolution of
mobile services from TDM to allIP. Montenegro is a mountainous
country, and microwave is the dominant
technology for wireless base stations.
Issues such as utilizing and boosting
bearing efficiency, fast provision of new
services, improving user satisfaction,
and managing CAPEX and OPEX,
required careful consideration to
ensure long-term evolution of mobile
network and to build an outstanding
bearer network. With packet-based
kernel, IPTN can carry packet services
efficiently. Because Promonte holds
ZTEs IPTN products and solutions in
high regard, ZTE was chosen above all
others to build the bearer network.
One network to enable multi-service
access: New base stations are all IP
based. A number of E1 and STM-1
services, as well as services from

other networks, are still carried by

the existing network. ZTE provided a
complete IPTN solution to cope with
this situation. IP RAN was used for
access and aggregation layers, to carry
both Ethernet and TDM services.
ZXCTN 9008 served as a PE node
of the MPLS network for access to
all services from RAN and the core
side, while ensuring network security
through node redundancy.
Delivery of high-quality services in
tourist season: Because Promonte
employed microwave technology
to build the original network, the
maximum bandwidth of its three
national backbone rings was only
600MB. IPTN can provide an
IP-based networking mode and
implement bandwidth multiplexing
on the link, resulting in a higher
utilization rate for microwave link.
IPTN has a perfect QoS mechanism
and can deliver differentiated
services based on service class. This
satisfies the requirement for highquality service delivery during the
tourist season.

Reliability is the basis of network:

IPTN features robust reliability, a
complete OAM mechanism, and
protection schemes such as PW dualhoming and tunnel protection, which
provide end-to-end and hierarchical
protection from service layer to link
layer. High reliability, redundant
critical board, and universal board
design allow equipment to operate
normally even in severe weather.
Smooth evolution to LTE: IPTN
supports bearer technologies such as
IP RAN and Metro-E, and is capable
of smooth evolution to LTE.
Fast delivery: To guarantee network
stability prior to the tourist season in
summer, Promonte required network
swap to be completed before April
2009. This involved collocation
of nearly 300 2G/3G base stations
and core network equipment. As
the infrastructure network, the
mobile bearer network had higher
requirements. Prior to service swap,
ZTE needed to complete installation
and commissioning of transmission
equipment at all nodes and ensure

they passed acceptance tests within

three months. Many stations were
located in the mountains where
the terrain was difficult and the
roads were icy during winter. Some
stations on the mountaintop were
only accessible by helicopter. Despite
installation challenges caused by the
environment, ZTE engineering staff
braved the bitter cold to complete
the installation and commissioning
of the transmission equipment earlier
than agreed. All items passed an
acceptance test on the first attempt,
and this gave a strong indication of
success in subsequent service swap.
ZTEs swift response was greatly
appreciated by Promonte.
The successful implementation of the
Promonte project helped the company
improve the quality of its mobile bearer
network. It can now deliver muchimproved services to attract more
customers, drive service growth, and
consolidate its leading position in
Montenegros mobile communications
market. Montenegro is well on the road
to an all-IP era.

October 2010

ZTE TECHNOLOGIES

15

Interview

Rooted in China: Stepping Forward

to World-Class Excellence

An interview with Zeng Xuezhong, Senior Vice President of ZTE Corporation

By Zhao Lili

&T/EXPO COMM CHINA 2010,

to be held in Beijing this October,
will be the most influential ICT
event this year. The theme of the EXPO is
tri-network convergence, and topics such
as TD/LTE/4G evolution, green telecom,
and Internet of Things will be discussed.
In the lead up to the event, journalist Zhao
Lili interviewed Zeng Xuezhong, Senior
Vice President of ZTE Corporation, to find
out how ZTE is working with Chinese
operators to develop a new industrial chain
in a new industrial environment.

Zeng Xuezhong has been Senior Vice President of ZTE since 2006.
He graduated from Tsinghua University with a bachelors degree in
engineering in 1996, and with an EMBA in 2007. Mr. Zeng joined
Zhongxingxin in 1996. Between 1997 and 2006, he acted as Senior
Project Manager, Assistant to the Regional General Manager, Manager of
Guiyang and Kunming Branches, Deputy General Manager and General
Manager of the Second Sales Division, and Vice President of ZTE. Since
August 2006, he has been Senior Vice President of ZTE overseeing the
Third Sales Division. Mr. Zeng has many years experience in the telecom
industry, including more than 10 in managerial positions.

16

ZTE TECHNOLOGIES

October 2010

Journalist: 2009 saw the birth of 3G

in China, and the countrys three major
operators have been involved in 3G
network deployment and operation ever
since. What role has ZTE played in
Chinas 3G deployment? And how will
ZTE establish strategic partnerships with
these operators to develop their networks
to LTE?
Zeng: In 2009, Chinas Ministry of
Industry and Information Technology
issued 3G licenses to China Mobile (TDSCDMA), China Unicom (WCDMA), and
China Telecom (CDMA). This marked
the formal entry of China into the 3G
era, and for the first time, placed Chinese
telecom vendors on an even footing with
foreign competitors. ZTE is not only a
key participant in Chinas 3G network
construction, but also an advocate for 3G

industry development and technological

innovation.
According to a report released by
iSuppli in January 2010, ZTE holds
the largest share in Chinas 3G market.
In the TD-SCDMA sector, ZTE has
been a strategic partner of China
Mobile throughout its TD network
constructionfrom the phase one
and two network trials in 2007 and
2008 to the large-scale phase three
commercialization in 2009. ZTE has
played a key role in China Mobiles
technical innovation, industrialization,
network deployment, and service
delivery.
ZTE has also become the industry
leader in CDMA, holding the largest
market share in China since 2007.
Close cooperation was established with
China Telecom after it was awarded a
CDMA license, and ZTE infrastructure
equipment has now been deployed
in 27 provinces throughout the
country. ZTE helped China Telecom
build approximately 60% of its local
CDMA networks at the prefecture
level, and undertook most of its 3G
network planning, construction, and
maintenance.
ZTE has also been a key supplier
to China Unicom since the company
started WCDMA network deployment
in 2009. ZTEs market share increased
during phase two, phase three,
and phase four of China Unicoms
WCDMA project. The largest share was
clinched in phase four of the project,
which covered 20 provinces and 108
cities. Leveraging its implementation
efficiency and service capability,
ZTE became the leader in fast project
completion. Moreover, network tests
were passed with excellent results. All
this demonstrates ZTEs comprehensive
strength in the WCDMA field.
Operators worldwide are closely

monitoring the evolution of 3G to

LTE, and some are even initiating
the process. ZTE is devoted to LTE
research and development, and is
continually increasing its strategic
funding in both FDD and TDD. We
have applied for more than 1,700 LTE
patents, and own basic patents of the
LTE standard. With a quality product
portfolio and a growth strategy that is
prudent and sustainable, ZTE is ranked
among the Top 3 players in terms of
LTE strength by research firm Garnet.
ZTE offers sophisticated services
for TD-SCDMA, CDMA2000, and
WCDMA, working with operators to
develop the whole industrial chain. We
are highly recognized by operators for
our innovation mechanism, long-term
strategies, and enhanced brand image.
Chinese telecom vendors are certainly
capable of competing with global
telecom giants. The 3G era is a turning
point for Chinas telecom industry and
is of far-reaching significance.
J: The theme of P&T/EXPO
COMM CHINA 2010 is tri-network
convergence, and the Chinese
government has put in place support
policies to speed up this process.
What changes will happen in Chinas
telecom industry, and what challenges
and opportunities will this present to
equipment vendors?
Zeng: In January 2010, the State
Council passed a general proposal
for speeding up the convergence
of telecommunications, broadcast
TV, and Internet networks. This
proposal will alter the whole industry,
not only driving the growth of
telecommunications, broadcast TV, and
Internet businesses in China, but also
presenting opportunities and challenges
to all parties in the industrial chain.
Tri-network convergence will

change the competition pattern of

Chinas telecommunications industry.
For equipment vendors, it will lead
to increasing demands for equipment
because of network construction
and upgrade requirements. More
importantly, as telecom operators
transform into service providers,
equipment vendors will also transform
from simple equipment suppliers
to end-to-end full-service solution
providers. The group of three major
operators in China will expand to
include CATV operators. These new
operators will have diversified business
models and will challenge traditional
operators with their control over TV
content and broadcasting rights. Both
telecom and CATV operators will
have to innovate and explore new
areas of business to gain a competitive
advantage, and this will create new
market and cooperative opportunities.
Demand for triple play services will
g r o w, a n d e m e rg i n g m u l t i m e d i a
services such as position shift TV
(PSTV), interactive TV, high definition
video, mobile monitoring, and mobile
TV, will be widely sought after.
Moreover, with the current bandwidth
restrictions for broadband services,
telecom operators will be compelled
to increase network access bandwidth
and to widely deploy FTTH networks.
Likewise, because cable networks are
incapable of bidirectional transmission,
CATV operators will be compelled to
restructure their networks as digital
two-way systems.
Changes brought about by trinetwork convergence will present
opportunities and challenges
for equipment vendors, but the
opportunities are greater than the
challenges. The entire industrial chain
will be reshuffled. Infrastructure
equipment vendors, service equipment

October 2010

ZTE TECHNOLOGIES

17

Interview

vendors, OSS providers, high-end

integrated terminal suppliers, and
content and service providers will
become the markets focus of attention.
With the most complete range of
infrastructure, service, OSS, and
terminal equipment, ZTE has much
experience in integrated broadcasting
and control platforms, interactive and
converged services, transmission,
IP, fixed-line networks, and service
software. Drawing on the advantages
of our products and end-to-end network
solutions, ZTE will continue to be a
key player in tri-network convergence,
and will further improve its ability to
rapidly respond to operator needs.
J: Green technology, carbon reduction,
a n d e n e rg y c o n s e r v a t i o n a r e o f

18

ZTE TECHNOLOGIES

October 2010

paramount importance in todays

telecommunications industry. What
requirements are implied by these
issues and how will equipment
vendors and operators adapt to such
requirements? Specifically, what is
ZTE doing to minimize negative
environmental impact?
Zeng: Green products, carbon
reduction, and energy conservation are
now integrally linked to the sustainable
development of telecom enterprises,
and represent a revolution in values,
concepts, production modes, and
lifestyles. In a recent government work
report, Premier Wen Jiabao stated that
the global financial crisis was giving
rise to a technological and industrial
revolution, and that great efforts should
be made in developing emerging

strategic industries including new

energies, new materials, information
networks, and high-end manufacturing.
The ICT industry is vitally important in
promoting a low-carbon economy.
Telecom vendors and operators must
play an active role in a new low-carbon
economy, and are obliged to promote
healthier, more sustainable telecom
models. To create green, innovative
networks, and to drive sustainable
development across the industry, ZTE
has incorporated energy conservation
and environmental protection into
its technological innovation, product
R&D, and manufacturing.
We have been active in drafting
international standards, and have
established a complete green
operation and evaluation system

power consumption of base stations

implies limiting the use of auxiliary
devices associated with power supply,
cooling, and maintenance. When
combined with new energy resources
such as solar or wind, power savings
of around 50% are achievable. These
efforts are examples of how ZTE is
developing green, low-carbon, and
energy-saving products.

incorporating product research,

implementation, supervision, and
management. Environmental protection
is at the forefront of our product
design, testing, and manufacturing,
and this helps reduce TCO while
i m p r o v i n g p r o f i t a b i l i t y. G r e e n
packing, transportation, installation,
and operation and maintenance are
implemented as part of our logistics
and project delivery. Moreover, we
provide unified all-IP platforms, IMS
core networks, IP service engines,
multi-mode BSCs, and renewable
energy sources for network evolution
and convergence. Power consumption
of base stations can be reduced by
30% or more over a 24 hour period,
which translates into savings of up to
6,300kWh per site each year. Reducing

J: Driven by new service demands, new

business models and new technologies
such as Cloud Computing, Internet
of Things, and mobile Internet have
emerged and are being enthusiastically
promoted within the industry. How
will vendors and operators change their
supply and demand relationships to
cope with new forms of competition?
Z e n g : T h e e m e rg e n c e o f C l o u d
Computing, Internet of Things, and
mobile Internet has driven operator
demands for new products, industrial
convergence, and business innovation.
Increasingly, equipment vendors are
being asked to not only provide upgrade
solutions for products and platforms,
but also to develop new products. They
must meet network requirements in a
new industrial environment.
Today, the telecom industry is
converging with IT, entertainment,
Internet, and even traditional logistics,
and this trend inevitably presents
challenges and opportunities to
all parties in the industrial chain.
Traditional telecom enterprises,
however, may have little knowledge
of other fields. Providing operators
with new products and technologies
is not the only role played by
telecom vendors; they must also
work with operators to explore
future technological trends, network
development, and business models.
As well as helping operators increase

efficiency and profitability, vendors will

become long-term strategic partners
in the joint exploration of new market
opportunities.
With the widespread deployment
of 3G networks throughout China,
operators have transformed into fullservice providers. 3G service operation
has become a primary focus, and
mobile Internet strategies have been
put forth. Since the first half of 2009,
ZTE has been helping China Telecom
build its software stores and this year
won a project to build China Unicoms
software store. ZTE is working hard to
enhance its service innovation, and is
partnering with operators to offer high
quality feature-rich 3G services.
J: Finally, what are the future plans of
ZTE in China?
Zeng: China is a very important
market for ZTE. In the coming years,
we intend to continue helping domestic
operators explore opportunities and to
maintain our own high speed growth.
Drawing on our strength in integrated
solutions, quality project delivery,
and technological innovation, we will
cooperate with our partners to satisfy
requirements for mobile broadband,
to thoroughly enhance service quality,
and to contribute to the countrys
industrialization and information
building.
On the whole, ZTE will enhance its
ability to deliver integrated solutions
and resources, and will seek to
improve its competitive strategies,
product planning and deployment, and
market behaviors to provide operators
with a full range of products and
services. Although rooted in China,
ZTE is stepping forward to worldclass excellence by further improving
operational efficiency and developing
its global strategy.

October 2010

ZTE TECHNOLOGIES

19

Third Eye

Future-Oriented IP Services Boost

Operators Ability for Service Delivery
August 9, 2010, selected from the global-growth consulting firm Frost & Sullivan

ptical network is the backbone

of the entire telecom network.
Wi t h t h e a d v a n c e m e n t
of optical component and silicon
technologies, optical network is
witnessing a shift from single pointto-point topology to ring and mesh
topologies, accompanied by increased
automation of equipment.

Large-Capacity ODUk Digital Cross

Connection

In April 2010, ZTE launched

ZXONE 8000 series, a large-capacity
digital cross-connect equipment,
to cope with the requirements of
bandwidth and large-granule service
grooming in metro network. The
equipment can help operators build
intelligent and flexible transport
grooming network at IP granularity,
thus adapting to future metro networks.
ZXONE 8000 can perform highspeed and intelligent grooming of
services at granularities of ODU0/1/2/3
and provide OTN digital cross-connect
capacities ranging from 800Gb to 1.6Tb
and 3.2Tb. It implements non-blocking
digital cross connection at granularities
of ODU0/1/2/3.
Frost & Sullivan states that
ZXONE 8000 has reliable system
architecture. Its cross-connect unit

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ZTE TECHNOLOGIES

October 2010

employs advanced N:M protection

mode to identify cube-level failure rate,
resulting in much higher equipment
security compared to traditional N+N
protection mode with square-level
failure rate.
ZXONE 8000s other salient
features include: flexible access
of varieties of services like
STM-1/4/16/64/256, POS, GE/10GE/
40GE, OTU1/2/3, DVB, ESCON, FC-N
(N=1, 2, 4, 8, 10); dual-plane intelligent
control via loading WSON to accelerate
service provisioning; multiple
restoration paths for critical services to
enhance service survivability and boost
network utilization, analyzed Fox Hu,
consulting manager of ICT practice,
Frost & Sullivan.

Greener and Simpler

Wi t h t h e v a s t l y i n c r e a s e d
investment on 3G services, operators
will come under increasing pressure to
drive down network investment cost
and improve ROI, cited Cheney Ji,
consultant of ICT practice, Frost &
Sullivan.
Green network results in lower
operational cost. ZXONE 8000 can be
deployed in core layer optical network.
It recorded power consumption of
34.650W and 27.455W per 10G

bandwidth respectively under separate

tributary and line mode and transponder
mode. The service processing system
enables full utilization of bandwidth
reducing network construction and
operational cost.
Intelligent service control helps to
lower maintenance cost. By integrating
GMPLS control plane to the network,
ZXONE 8000s service processing
system (ROAMD and digital crossconnect system) can implement
highly intelligent service operation.
Operators can perform hierarchical
QoS management, implement networklevel service restoration and balance
link load; making the network more
intelligent and easier in service control
and maintenance. As a result, the
network operation and maintenance
cost can be reduced.
According to Frost & Sullivan,
core layer optical transport network
market has high technical barrier.
ZTE is expected to succeed in gaining
access to this high-end optical network
equipment market with ZXONE 8000.
Its outstanding system architecture
and performance can help operators
build high-performance and large-scale
intelligent optical transport network,
accommodating development of future
metro networks.

Research Note

LTE-A

Leads Future Wireless

Communications
By Mi Dezhong

or its high speed and low

latency, LTE has attracted
much attention from leading
telecom operators and equipment
vendors worldwide. Operators are now
increasing their LTE investments, and
are actively engaged in LTE testing.
Commercial LTE networks have been
available since 2010. To ensure longterm evolution and compliance with
IMT-Advanced (IMT-A) specifications,
3GPP has initiated research into LTEAdvanced (LTE-A) and has adopted it
as the preferred 4G candidate.
LTE-Asmoothly evolved from

LTEboasts higher peak data rates

(1Gbps in the downlink and 500Mbps
in the uplink), and higher spectral
efficiency (30bit/s/Hz in the downlink
and 15bit/s/Hz in the uplink). It
supports various deployment scenarios,
enabling seamless coverage from
macro cells to indoor areas.

Key Techniques for LTE-A

A number of new technologies

have been introduced into LTE-A to
meet IMT-A requirements. These key
techniques include Carrier Aggregation
(CA), enhanced MIMO, relay, and

Coordinated Multi-Point Tx/Rx

(CoMP).

Carrier aggregation
To reach the required peak rates,
LTE-A supports a maximum bandwidth
of 100MHz. Such high bandwidth is
hard to find in the available spectrum
resource, and also poses a great
challenge to hardware design of
eNodeB and User Equipment (UE).
Moreover, a key technique is needed
to fully utilize spectrum scattered on
various frequency bands. To meet these
requirements, CA has been introduced

October 2010

ZTE TECHNOLOGIES

21

Research Note

into LTE-A.
CA supports both continuous and
non-continuous Component Carrier
(CC), as shown in Figure 1. This not
only improves peak data rates and
system throughput, but also addresses
the issue of spectrum discontinuity.
Asymmetric carrier aggregation is
also supported in LTE-A. In a typical
scenario of asymmetric carrier
aggregation, downlink bandwidth is
larger than uplink bandwidth.
To allow compatibility with LTE,
LTE-A Rel-10 specifies that each CC
adopts existing LTE bandwidth and
is backward compatible with LTE. In
LTE-A Rel-11 or above, other nonbackward compatible carriers will be
introduced. In practical scenarios for
carrier aggregation, one or more CCs
can be scheduled per UE depending
on the transmission requirement and
capability.

Enhanced MIMO
Multi-antenna technology improves
channel capacity and spectral efficiency
by expanding transmission dimension.
In LTE-A, more antennas are supported
in the uplink and downlink, and MultiUser Multi-Input Multi-Output (MUMIMO) is enhanced in the downlink,
as shown in Figure 2.
Compared with LTE Rel-8 (which
supports single-antenna transmission),
in the uplink, LTE-A supports up to
four transmit antennas. For the Physical
Uplink Shared Channel (PUSCH), up
to two codewords and four layers are
supported with Single-User MultiInput Multi-Output (SU-MIMO). For
the Physical Uplink Control Channel
(PUCCH), transmission quality is
improved through transmit diversity.
In the downlink, the number of
transmit antennas is expanded from
four to eight, and up to two codewords

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ZTE TECHNOLOGIES

October 2010

and eight layers are supported. This

greatly improves downlink transmission
throughput and spectrum efficiency.
Moreover, dynamic switching of SUMIMO and MU-MIMO is supported,
and performance of downlink MUMIMO is optimized through enhanced
feedback of Channel State Information
(CSI) and a new codebook design.

Relay
In relay transmission, a relay
node or relay station is introduced
between eNodeB and UE. The relay
node is connected to eNodeB via a
wireless link. In the downlink, data is
transmitted from eNodeB to relay node,

LTE CC1

LTE CC2

and then to the end user, while in the

uplink, data is transmitted from the end
user to relay node, and then to eNodeB,
as shown in Figure 3. In LTE-A, relay
is used as a tool to improve highdata-rate coverage, to support group
mobility and temporary network
deployment, and to enhance cell-edge
throughput.
Relay falls into two categories:
type 1 and type 2. Type 1 relay has
an independent cell ID, and provides
resource scheduling and hybrid
automatic retransmission functions. For
an LTE Rel-8 UE, type 1 relay works
as an eNodeB; however for an LTE-A
UE, type 1 relay has more powerful

LTE CC3

LTE-A carrier

Continuous CA

LTE CC1

LTE CC3

LTE-A carrier

LTE-A carrier

Non-continuous CA

Figure 1. Typical scenario of carrier aggregation.

Downlink

Uplink

Support up to 8x8 antenna

configuration

Support up to 4x4 antenna

configuration

Support dynamic SU-MU

MIMO switching

PUSCH supports SU-MIMO

PUCCH supports transmit
diversity

Enhanced MU-MIMO
feedback

Figure 2. Enhanced multi-antenna solution.

preprocesses channel state information

under certain assumptions, and feeds
back information such as precoding
matrix indicator and channel quality
indicator to eNodeB. For SRS-based
feedback, eNodeB uses channel
reciprocity and obtains equivalent
downlink channel state information
according to the SRS sent by UE. This
scheme is suitable for a TDD system.

UE

Prospects of LTE-A

eNodeB

Relay Node

UE

Figure 3. Principle of relay transmission.

JP

CS/CB

Figure 4. Principle of CoMP.

functions than an eNodeB. Type 2

relay has no independent cell ID, and
no control information except traffic
is transmitted. Type 1 relay is now
adopted in LTE-A Rel-10.

CoMP
In LTE-A, CoMP is considered a
useful tool for improving high-data-rate
coverage, cell-edge throughput, and
system throughput in both heavy and
light load scenarios.
CoMP involves uplink CoMP
reception and downlink CoMP
transmission. Uplink CoMP reception
improves cell-edge user throughput
by joint multi-cell reception of user
data, and this has very limited impact
on RAN1 specifications. Depending
on whether traffic data is obtained

at multiple coordinated points or

not, downlink CoMP transmission is
divided into Joint Processing (JP) and
Coordinated Scheduling/Beamforming
(CS/CB). JP achieves transmission gain
through joint processing, while CS/CB
reduces inter-cell interference through
coordination, as shown in Figure 4.
To s u p p o r t d i f f e r e n t C o M P
transmission modes, UE needs to
provide feedback on channel state
information. Three feedback schemes
are defined for CoMP: explicit
feedback, implicit feedback, and
Sounding Reference Symbol (SRS)based feedback. For explicit feedback,
UE feeds back information such as
channel coefficient and channel rank
without preprocessing channel state
information. For implicit feedback, UE

Carrier aggregation uses band

aggregation to expand transmission
bandwidth; enhanced MIMO increases
cell throughput by further expanding
MIMO dimension; relay improves
coverage through relay of radio
transmission; and CoMP increases
cell-edge throughput by coordinating
multiple cells. By introducing these key
techniques, LTE-A can meet or even
surpass all IMT-A requirements.
As of July 2010, ZTE has concluded
seven LTE commercial contracts, and
built nearly 50 LTE trial networks for
telecom operators worldwide. The
company also places great importance
on LTE-A, taking an active part
in drafting related standards and
submitting proposals that have been
adopted by 3GPP. With in-depth
research into key LTE-A techniques,
ZTE has developed an array of
competitive solutions. ZTE is now
working hard to develop a LTE-A
prototype, and has made good inroads
to this end.
ZTE is leading the telecommunications
industry toward wireless broadband
communications. In 2012, its LTE-Abased eNodeBs are expected to be
deployed globally. This will allow
people to enjoy feature-rich multimedia
services and high-speed connectivity
using mobile broadband.

October 2010

ZTE TECHNOLOGIES

23

Research Note

Business Model Analysis of

Managed Services
By Wang Xinqiang

What are Managed Services?

Managed services are professional

network management services that
include integration; and operation and

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ZTE TECHNOLOGIES

October 2010

maintenance of the network layer,

business layer, and customer layer
based on a Service Level Agreement
(SLA). Managed services adopt
standard processes, reusable resources,
flexible value chain cooperation
models, and revenue distribution
schemes so that operators can
optimize their business and financial
performance and focus more on core
businesses.

There is no standard definition of

managed services, and this is ZTEs
current understanding of application
scenarios for managed services in the
telecommunications industry. The term
managed services originally referred
to any user facility management service
provided by operators to enterprise
users. It was overly simple and did not
take into account SLAs.
The SLA is the foundation of service

Business Layer
Customer

Customer

hen bidding begins for

large-scale network
projects, managed services
are often considered an admission
ticket. Many operators see managed
services as a business strategy for
globalization. Vodafone and Warid,
for example, use unified RFPs and
share bid evaluations, and have built
a joint global business evaluation
s y s t e m . S o u t h A f r i c a s M T N i s
considering adopting a managed
services strategy in both developing
and undeveloped countries. As well
as basic network operation and
maintenance, operators are demanding
more in terms of revenue management,
business management, and terminal
management, and managed services
have become an increasing focus of
attention.

A&C

Service

Collocation

SDP

Management

Management

Business

Consulting

Application

& Content

Partnership

SLA Assurance

Network

Maintenance

Design

Vendor

Plan
Optimization

Figure 1. Hierarchy of managed services.

Operation

Network

Deployment

Service Layer
& Logistic
Facility Management
Spare

delivery, and service capability is an

absolute prerequisite. Managed service
solutions should adapt to the business
models of operators and the following
should be considered:
Support measures for product
solutions (product maintainability,
interface openness, and SDP)
Integration with third-party products
and client devices
Delivery cooperation model and
income distribution program
Three changes should be considered
for business models:
C h a n g e s i n t h e p r o f i t m o d e l
(resulting from changes in the cost
and revenue models)
Changes in the value orientation
(from equipment selling to service or
business selling)
Changes in the customer relationship
(from a buyer-seller relationship to a
partner relationship)

home markets of other operators,

competition has heated up. Shorter
time to market for new products and
rapid development of new business
is therefore necessary to compete.
Management optimization: The
emergence and convergence of
new technologies, new businesses,
and complicated value chains have
made network management more
difficult. Supply chain management,
network technologies, and services,
need to be simplified and integrated
so that operators can focus on core
businesses and front-end markets.
Risk transfer: The risks associated
with new technologies and new
600000

400000

US$m

200000

Driving Force of Managed Services

Managed services are driven by the

transformation of telecom operations in
terms of:
Financial targets: As the telecom
market continues to slump and the
telecom ecosystem deteriorates;
new approaches to cost reduction,
streamlining revenue, cash flow
performance, and ROI must be
sought. Among these, reducing
OPEX is the most critical.
B u s i n e s s p e r f o r m a n c e : N e w
technologies are continually
e m e r g i n g . To i n c r e a s e c o r e
competency in the market, new
technologies must be obtained and
business performance improved at
reduced cost.
Deployment capability: Since
competition is globalizing and new
operators are asserting themselves
with new technologies in the

businesses should be shared with

equipment suppliers in order to
minimize investment risk.
Service management is an essential
part of the new telecom ecosystem
and this creates win-win opportunities
for all participants. By optimizing and
sharing resources, complementing
business abilities, and sharing risk,
service management creates additional
sources of income.
The need for service management
is also evident when the CAPEX and
OPEX of mobile operators is examined
and OPEX broken down (as shown in
Figures 2 and 3).
CAPEX of global mobile operators

0
2005

2006

2007

CAPEX

2008

2009

2010

OPEX
Source: Pyramid Research.

Figure 2. Mobile operators CAPEX and OPEX.

Network Services 70%

Transport 10%

Share of OPEX
100
90

Cost of Services 25%

80
70
60
50
40

R&D 2%

Interconnection,
Termination, and
Roaming 18%

Cost of Equipm ent Sales 15%

Depreciation and Amortization 25%

30
20

Selling, General, and Administrative 35%

10
0
Source: Pyramid Research.

Figure 3. OPEX breakdown for a typical mobile operator.

October 2010

ZTE TECHNOLOGIES

25

Research Note

Managed service capability is important

in the decision-making process for product
purchases. Outsourcing of managed services has
become a better choice for operators, and it is
crucial for manufacturers to provide professional
services.
reached peak value (about US$137bn)
in 2007 and has declined steadily
ever since. New business expenses in
CAPEX have increased from 10% in
2000 to 30% in 2010.
OPEX of global mobile operators is
three times CAPEX (about US$400500bn annually). However, since
2008when operators were equipped
w i t h c o n v e rg e d , a l l - I P n e t w o r k
technologiesOPEX growth has
slowed.
For a typical mobile operator,
service costs account for 25% of
OPEX, 70% of which are for network
service. The ratio of network service
expenses to total service expenses in
OPEX and CAPEX (e.g. for service
management tools) has grown from
33% in 2005 to 45% in 2010.
Conflicts and opportunities in next
generation network transformation
promote service management:
The traditional resource-based
profit model of bearer networks is
being challenged, and bit paradox
has become the bottleneck of
next generation business network
operation.
T h e v a l u e c h a i n m o d e l i s a n
inevitable trend, and virtual
operation and managed services
have come into fashion.
Managed services at the business
layer involve risk sharing while next

26

ZTE TECHNOLOGIES

October 2010

generation network profit models are

sought.
The development of an industry
profit model goes hand in hand with
development of managed services
business models. Manufacturers
can thus provide more solutions and
business models to meet customer
needs in the value chain.

Development Trend of Managed

Services

Managed service capability is

important in the decision-making
process for product purchases.
Outsourcing of managed services has
become a better choice for operators,
and it is crucial for manufacturers to
provide professional services.
Network-layer managed services
will dominate the market, and will be
provided by device manufacturers with
product operation ability or managed
services providers. Business-layer
managed services have an uncertain
future because industry profit models
are still being explored. However,
the total available market is growing
rapidly and business-based market
segmentation needs to be tracked.
Marketing of customer-layer managed
services will also be segmented and
more suppliers will offer managed
services.
The growing demand for managed

services from virtual operators and

enterprises may be a blue ocean for
traditional network vendors. The active
roles of IT enterprises in the managed
services field will give rise to new
competitive arrangements.

Conclusion

The transformation of the telecom

business models has led to the
development of managed services. New
networks, new businesses, and highvalue domains have grown quickly as a
result of value chain managed services.
The NGN business profit model is still
being explored, with risks being shared
with manufacturers.
The network layer, business layer,
and customer layer have different
capability requirements for managed
services. Equipment suppliers should
develop and offer different managed
service solutions according to different
paths and modes.
B u s i n e s s m o d e l s o f d i ff e r e n t
manufacturers have a common point
in taking advantage of their own
products and resources. Managed
services capabilities can be improved
through organizational transformation,
cooperation, and mergers, and profit
can be made by selling competitive
solutions.

News Brief

CSL and ZTE Set to

Commercially Launch the
Worlds First Dual Cell HSPA+
(42Mbps)/LTE Network
7 September 2010, Hong Kong At the LTE Asia
2010 Conference today, CSL Limited (CSL), Hong
Kongs leading mobile network operator in partnership
with ZTE Corporation, a leading global provider of
telecommunications equipment and network solutions
demonstrated CSLs progress to being the first in the
world to simultaneously deploy DC HSPA+(42Mbps)/LTE
technologies on an entire network.
CSL and ZTE demonstrated to the world live LTE
service with pre-commercial USB modems running various
broadband, multi-media applications, including high-speed
file download/upload, internet browsing, HD video download
and streaming performance, and many other features that
will resonate with the next generation of mobile users. This
gives the delegates a first-hand experience with the LTE
service being deployed all over Hong Kong.

ZTE Supplies Over 3,500 3G

Equipment to Taiwan VIBO Telecom
Total shipment of SDR base-stations is over 250
thousand units worldwide
27 September 2010, Shenzhen, China ZTE today announced
it has signed a contract to supply WCDMA wireless equipment to
VIBO Telecom Inc. As a subsidiary of theTaiwan Kinpo-Compal
Group, VIBO is the leader of pure 3G WCDMA operator in Taiwan.
Under the agreement, ZTE will supply more than 3,500 3G basestations to replace VIBOs existing 3G network around Taiwan
within one year. The base-stations to be provided for VIBO are
based on ZTEs industry-leading Software Defined Radio (SDR)
technology.
In recent years, ZTE has achieved a breakthrough across the
global UMTS markets based on its leading edge SDR technical
platform. To date, the total shipment of ZTEs SDR base stations is
already over 250,000 units, used by more than 60 operators in over
40 countries.

ZTE Awarded 2010 IPTV Equipment

Vendor of the Year Accolade
29 September 2010, Shenzhen, China ZTE has been recognized
as the Best Practice Award2010 IPTV Equipment Vendor of
the year, marking the second time it has received the accolade. It
received the award based on research conducted by leading consulting
company, Frost & Sullivan.
Among IPTV vendors, ZTE ranked third in the world IPTV
middleware market in terms of subscribers in 2010 H1, and was the
leader in the IPTV middleware markets of Asia and China in 2010 H1.
With the development of the global broadband market, IPTV
content and application has become more important. As one of the
latest broadband applications, IPTV has attracted industry attention.

ZTE to Build CDMA Network for

Polkomtel
Data services main driver for nationwide
network in Poland
14 September 2010, Shenzhen, China ZTE is to upgrade
Polish operator Polkomtels national CDMA network. ZTE will
supply equipment for the network in the 450MHz (L band),
upgrading existing infrastructure to improve coverage and
enable data and Push-to-Talk services.
Polkomtel is one of the largest operators in Poland,
with about 14 million subscribers. ZTE Poland will supply
all equipment for the network including base stations and
controllers, switching nodes, service platforms, and a GoTa
digital trunking system.
There is a growing demand in Poland for data services and
high-bandwidth applications. Our subscriber base wants to be
connected and make use of social networking. ZTEs CDMA
technology enables Polkomtel to stay ahead of the competition
and offer consumers the quality of services and innovative
applications they are looking for, said Jarosaw Bauc,
President of the Board at Polkomtel.

October 2010

ZTE TECHNOLOGIES

27

News Brief

ZTE Launches the

Gecko, the Worlds
First Multi-Carrier
Super-Mini CDMA
Base Station
30 September 2010, Shenzhen,
China ZTE today announced
the launch of Gecko, the first multicarrier super-mini CDMA base
station available in the industry.
The innovative Gecko is small
in size (measuring 26cm18cm
5.8cm), lightweight, easy to mount
and satisfies operators networking
requirements, such as indoor blindspot coverage and hot-spot traffic
distribution.
The Gecko helps operators
make up for any deficiencies,
improves network quality, enhances
user experience and builds highefficiency and high-quality CDMA
networks.
Z T E s G e c k o b a s e s t a t i o n
supports several IP networking
modes and achieves access by using
various transmission resources (such
as MAN, LAN, PON, xDSL, and
satellite). Its coverage radius can
reach 300 meters, thus meeting high
service standards for use in offices,
hotels, retail and entertainment
outlets, as well as providing high
quality indoor 3G data
and voice
services.

Gecko Base Station

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ZTE TECHNOLOGIES

October 2010

ZTE Launches Industrys Most Complete 100G

End-to-end Carrier Network Solution
Carrier network operators to benefit from comprehensive range
of UWB products and services
28 September 2010, Shenzhen, China
ZTE today announced the launch of
the industrys most complete 100G endto-end carrier network solution, which
will provide the bandwidth capacity for
network operators to meet increasing
network traffic demands.
The explosive popularity of IT
applications, HD video services and
cloud computing has led to a massive
spike in network traffic. For carrier
networks to provide sufficient capacity,
operators need to expand and upgrade
their networks smoothly. Through the
deployment of ZTEs ZXWM M920 and
ZXONE 8000 as part of the Ultra Wide
Band (UWB) 100G carrier network
solution, operators can eliminate any

traffic bottleneck in the core networks,

and fully meet the demands of the
growing data business.
To achieve the 80-wave, 100G ultrawide system capacity, ZTEs complete
solution incorporates the use of ZXR10
T8000 in the IP layer to realize the
smooth upgrade from 10G to 100G.
ZXR10 T8000 is a telecom-class
100G routing cluster system with the
largest capacity in the industry, which
can support multiple services with
compromising performance in case of
full-service overlapping. By using chips
with self-owned intellectual property,
ZXR10 T8000 can maximally support
16+64 multi-chassis system and 200T
switching capability.

ZTE Launches Converged Service Network

Platform
SDP as a Service solution announced at SDP Global Summit
15 September 2010, London
ZTE today launched its Converged
Service Network (CSN) at the SDP
Global Summit in London. ZTEs
CSN incorporates traditional SDP
architecture and cloud computing
features, enabling an SDP as a Service
(SDPaaS) solution for the first time.
The CSN provides an efficient and
stable service network platform for
operators, third-party application
providers, and individual or group
application developers.

The CSN is a new service network

platform integrating mobile and fixed
network infrastructure onto a basic
platform that supports both Internet and
telecoms services, providing a flexible
solution with efficient management and
control features. Traditional SDPs also
provide the flexibility to support and
manage different services, but are not
able to support multi-domain service
convergence, or an environment where
developers can collaborate and share
innovative services.

October 2010

ZTE TECHNOLOGIES

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ZTE TECHNOLOGIES

October 2010