HUAWEI COMMUNICATE JAN 2009 ISSUE 46

JAN 2009 ISSUE 46

Leap Wireless: Telecel Globe strides Yemen Mobile The new world of
Making a difference across Sahara is aiming high convergent billing

Vodafone AIC
The fruit of collaborative innovation
At Huawei, we know that simple ideas can lead to big things. In much the
same way a tiny acorn can grow into an oak tree, we strive to realize your
full potential through innovative products and solutions.
We devote 43% of our entire staff of over 82,000 people to R&D, which is
just one of the reasons why the world’s top telecom network operators
choose us as their partner.
We are committed to looking after your needs every step of the way. B y
putting you first, we grow your business to be as lasting and enduring as the
oak tree itself. That’s why at Huawei, we help you realize your potential from
the simplest of ideas, to ultimate success.
 Only the fittest survive
As the world-wide financial crisis continues to spread and deepen, it will have an
adverse affect on the telecom market, putting more pressure on operators to improve
customer satisfaction, increase operation income, and to cut operating costs at the same
time. Further, new telecom services such as mobile Internet, digital music, mobile TV,
mobile newspaper, and the wireless portal will continue to emerge in larger numbers
as operators compete for a larger share of the market. The ICT and TIME modes have
already begun to blur the borders between different industries, blazing the path for
Sponsor: industrial alliance and interpenetration. All of these factors represent major challenges
Huawei COMMUNICATE to operators’ ability to effectively operate these services and show a profit within a short
Editorial Board, period of time.
Huawei Technologies Co., Ltd. In a marketplace where the law of the jungle applies, only the fittest will survive.
Therefore, if operators want to become stronger in this kind of super-competitive
Consultants:
environment, then they will have to make more of a concerted effort to build core
Hu Houkun, Xu Zhijun, Xu Wenwei
competence. As the telecom industry continues to integrate with other industries such as
Tao Jingwen, Deng Biao, Huang Chaowen
the Internet and mass media to a greater degree, then traditional telecom operators will
Che Haiping, Yu Xiangping, Zhan Linkun
become more like comprehensive communications service providers. In addition, they will
Editor-in -Chief: bring with them new types of service networks that will cost billions of dollars to build
Gao Xianrui ([email protected]) and deploy.
Moreover, for big-name operators, one of the major challenges they face will be to
Editors: determine how to effectually generate a quick return on their investments in emerging
Xu Ping, Pan Tao, Xu Peng businesses such as mobile media, mobile adverting, and integrated communications. In
Li Xuefeng, Xue Hua, Chen Yuhong the meantime, the Internet will no longer be considered a threat to operators, but one
Liu Zhonglin, Huang Zhuojian, Zhou Huajiao more of the balancing roles they will have to assume in the new communications market,
Wang Hongjun, Zhou Shumin where the law of the jungle prevails.
The fourth reorganization in the history of China’s telecom industry occurred in 2008.
Contributors: This was just the beginning of a new era. So, the question became, “How could operators
Guo Yajun, Gao Zhihua, Xiao Jiwen
continue to win their customers’ allegiance, while continuing to expand their market in
Feng Weixiong, Zhang Deqiang
the midst of full service operations that offer more complicated services?” International
Li Zicui, Zhou Xu, Zhu Bo
telecom operators keep relying on new technologies and applications by leveraging
Li Sheng, Chen Jiuzhao, Zong Runhze
modern communications technologies to develop fixed-mobile convergent, value-added
Long Huimin, Cai Xiao, Guo Wei
services such as IPTV, mobile media, mobile Internet and mobile advertising. Perhaps we
Yang Jun, Chen Wei, Wu Zhiguo
can derive some edification form this successful practice.
In order to help operators to respond more quickly to market demands, Huawei
Tel: +86 755 28780808 Software is committed to the idea of strengthening its capacity to deliver customized
Fax: +86 755 28356180 services to operators. Based on its open SDP and CBS platforms, Huawei will continue to
Address: A10, Huawei Industrial Base, exploit ways to provide innovative services and new applications by forming partnerships
Bantian, Longgang, Shenzhen,
with operators, and developing new business modes such as hosting service and joint
China 518129
operation. These will help operators to better cope with new demands from individuals,
E-mail: [email protected] families, enterprises, and operation support.
Publication registration No.: So let us join hands in an effort to cope with increasingly complicated and intensifying
Yue B No.10148
market competition.
The information contained in this document is for
reference purpose only, and is subject to change
or withdrawal according to specific customer
requirements and conditions.

Copyright © 2009 Huawei Technologies Co., Ltd.

All Rights Reserved.
No part of this issue may be reproduced or transmitted
in any form or by any means without prior written Alex Deng
consent of Huawei Technologies Co., Ltd.
Huawei Software
What’s inside:

P.28 P.44
Global Digest Convergence • Tailored solutions
01 28Mps 3G mobile broadband to be 14 Vodafone AIC: The fruit of
launched in Italy collaborative innovation
By Chen Danbo

02 Mobile connections reach 4 billion

worldwide
17 SDP delivers more than speed
The service delivery platform (SDP) has greatly helped
04 Huawei records industry first, ships to shorten the time to market (TTM). Needless to
say, this has certainly helped operators to catch some
1 billionth mobile softswitch license golden opportunities in the marketplace.

By Zhu Haoying

Voice from Operators

05 Telecel Globe strides across Sahara
19 Past experience guides future practice
By Joyce Fan
SDP construction benefits from IN
operations
08 Leap Wireless: Making a difference By Yan Lixin
in customers’ lives
By Julia Yao

21 The new world of convergent

11 Yemen Mobile is aiming high billing
By Julia Yao By Wang Wei
 Let’s COMMUNICATE beyond technology and share understandings of the latest industry trends,
successful operational cases, leading technologies and more. Based on in-depth analysis of the
matters that lie close to your heart, we will help you stay on top in the competitive telecom industry.

P.36 P.50
Strategy • New opportunities Operation • Successful modes
24 The global financial crisis and 40 Adding value with the multimedia
telecom operations call center
By Liu Nanjie By Yan Xinyu

28 The new social networking arena 42 IPCC: from Asia-Pacific to the world
By Zhou Xu
By Hu Lixin

45 Unified enterprise communications

31 Growing big in niche markets solution
By Wang Keyan By Wang Yufan

Enjoy • Enhanced experience

34 Business model innovations in cloud
computing 48 The new IPTV platform
By Zhu Bo & Cheng Rentian By Liu Jinming

50 Mobile ads adds big revenue

36 Do Rei Me By Li Dawei
An exploration of CRBT operations
The color ring back tonemarket has enjoyed significant
success and brought in substantial income throughout
54 A new way to promote P2P
the world. Is there a secret to success in CRBT operations? messaging
By Bai Li By Yin Weihua
 GLOBAL DIGEST

News

28Mps 3G mobile broadband to be launched in Italy Sprint launches first 3G/4G modem
Telecom Italia first to offer generation broadband products US operator Sprint launches US market that can take advantage
H S PA + D a t a Ca rd s b a s e d o n that are coming to market in spring what the company claims as the of the device's capabilities. Sprint
Qualcomm chipset capable of 28 2009. HSPA+ technology, using first dual-mode 3G/4G device launched WiMAX services in the city
megabits per second downlink and Qualcomm chipsets, will roll out in to make it to market. The Sprint in September. But as Clearwire, which
5.7 megabits per second uplink. the first half of next year in an initial 3G/4G USB Modem U300 launches is merging with Sprint's WiMAX
Telecom Italia will be offering Data Card offering for PCs enabling i n t h e U S c i t y o f B a l t i m o re , business, rolls out its WiMAX network
mobile broadband connections mobile Internet connections at data Maryland on December 21. nationwide, the device will be suitable
speeds of up to 28Mps in 2009. rates of up to 21Mps (5.7 Mps Currently Baltimore is the only for more and more markets.
At its Turin Labs, Telecom Italia upload). Downlink speeds will rise
is the first company in Europe to 28Mps in the second half of
T-Mobile launches YouTube channel for G1
to run field trials of the next- 2009.
T-Mobile is launching a channel experts to answer via the video
on YouTube for its G1 Android sharing site. The channel will also
mobile phone. The operator is feature a range of videos letting
keen to develop its contact with consumers know about the benefits
its customers and is allowing them of the new phone and the range of
to upload questions for T-Mobile applications being developed for it.

Mobile video usage small but growing

According to a new report driven primarily by the presence of
issued by Nielsen, 10.3 million U.S. more Internet-friendly phones in
mobile subscribers access video the market. Nearly two-thirds of
content on their phones during viewers are watching video via the
a given month, roughly 5% of all mobile web (66%), though paid
wireless subscribers. subscription services and purchased
KPN launches Simyo MVNO in France H o w e v e r, t h e a u d i e n c e i s downloads continue to account for
growing, up 14% in 2008 vs. 2007; a sizable amount of viewership.
KPN launches its Simyo MVNO hours a day.
(Mobile Virtual Network Operator) in The introduction of Simyo in
France in January using the Bouygues France is part of KPN's strategy Fixed line broadband still sticky service
Telecom network. The Dutch group to deploy different brands in Ovum recently discovered that the the fixed line.
launched the Simyo brand in Spain in different European markets. KPN majority of consumers intend to scale The majority (65%), said they
January 2008. The MVNO uses a 100 said it planned to introduce other down rather than cancel their fixed would simply look to reduce spend in
percent online distribution model and propositions in France this year by line broadband service, and at the top certain areas, rather than cancelling
charges EUR0.19 per minute for calls using its own brands and through level broadband seems to remain a one of their services altogether. As
to all fixed and mobile networks 24 partnerships. “sticky” service. a result, spend will likely be evenly
The survey found that only 7% of cut across three areas: fixed voice
respondents would ditch their fixed calls, mobile voice calls and pay TV
Virgin launches 50Mbps broadband in Britain
line for both voice and broadband subscriptions.
Virgin Media has launched the or 35 pounds per month when in favor of mobile services, and only
first high-speed broadband service bundled with a phone line. 1% said they would be prepared to
in Britain. The company claims the Virgin hopes the high-speed keep their fixed voice but cut their
50Mbps offering is around 9 times network will cover 40 percent of its broadband access. Those thinking
faster than the nation's average customers, reaching the rest of the of cutting the mobile subscription
broadband speed. network–representing a possible stood at 6%, making fixed broadband
The plan will be offered for 51 subscriber-base of 12.6 million actually even stickier than mobile to
pounds as a standalone service, homes–by late 2009. those that are planning on keeping

1 JAN 2009 . ISSUE 46

 Data

New Orange 3G HSDPA network in Northern Ireland 25%

Faster mobile voice and data have both benefited from the Wi-Fi chipset sales jumped 25% Wi-Fi enabled mobile phones
services hit Northern Ireland. Orange recent upgrade program. Some in 2008 to 387 million in the face of shipped in 2008, a 52% increase on
announced the completion of its 760 sites across the areas have the rapid adoption of HSPA. the previous year. Demand for Wi-Fi
new 3G HSPA (3G+) network in been upgraded resulting in a Research by the Wi-Fi Alliance enabled stationary CEDs increased by
Northern Ireland, giving customers, 20% improvement in network and In-Stat reveals that 56 million 51% to 48 million.
living, working or traveling in the performance for both voice and
country access to even more reliable data. Orange now offers over 94%
voice and data services. population 3G coverage and over
USD1.36 billion
Northern Ireland and Scotland 70% 3G+ across the UK. The new CEO of Vodafone, The axe is thought to be hovering
Vittorio Colao, is expected to show over supply-chain departments
his mettle in the New Year by and new equipment orders, while
Intel still believes in WiMAX instigating a cost-cutting program outsourcing is being considered
WiMAX’s biggest backer, Intel, impleme nta tions aro un d t h e to fulfill his promise to save over for logistics, procurement, IT and
is still committed to the wireless world. Portland is the second city USD1.36 billion. technology operations.
technology despite the fast takeup in the U.S. to rollout a WiMAX
of mobile broadband and the network.” But he argued that
economic crisis. when LTE does reach the market,
USD940 million
Intel Chairman Craig Barrett vendors should look towards the China Unicom’s Hong Kong part of China’s telecom industry
said, “4G is starting to rollout. seamless integration of LTE and listed arm will pay about USD940 restructure, which has seen Unicom
There are 300 to 400 commercial WiMAX. million in cash to buy fixed-line buy Netcom’s fixed-line business
assets from its parent company and sell off its CDMA business to
and China Netcom. The deal is China Telecom.
China awards 3G licenses
China has issued the long- 23 requirements for the operations
awaited 3G licenses to the three of the 3G networks including rules
186.7 million
operators. The Ministry of Industry on competition, consumer rights, The Internet grew by at least 1.56 grown by at least 11 million in the
and Information Technology (MIIT) security, charges and facility building. million sites in December, reaching past six months. On average, roughly
has issued a TD-SCDMA license The news comes one day after the 186.7 million sites, according to 1.5 million sites were added per
to China Mobile, a CDMA2000 State-owned Assets Supervision and Netcraft's December 2008 Web month. The largest gain occurred in
license to China Telecom and a Administration Commission of the Server Survey. September, when 4.5 million new
WCDMA license to China Unicom. State Council (SASAC) approved the Judging by past surveys, the sites were added, quite possibly
According to state news agency China Unicom and China Netcom number of sites on the Internet has because of the Beijing Olympics.
Xinhua, the ministry also published merger.

1%
Mobile connections reach 4 billion worldwide Western Europe’s cell phone commented the director of Strategy
3G Americas announced that a nearly 415 million 3G subscriptions market stopped growing in the Analytics’ Global Wireless Practice,
historic milestone was achieved for to date, with 77% share of the 3G third quarter of 2008 as the global Phil Kendall. “Users are still talking
the wireless industry in December market on UMTS/HSPA networks economic downturn affected more than a year ago, but they
2008 with 4 billion connections or 320 million connections, and consumer spending across the are also pocketing some of the
to mobile devices worldwide. This the remaining 95 million on CDMA board, according to a new report savings offered by falling prices.
estimate by Informa Telecoms & EV-DO. The number of commercial by Strategy Analytics. Coupled with weakness in sectors
Media represents 60% of the entire UMTS/HSPA networks has risen to “Mobile voice revenues have such as international roaming, as
global population today. 258 in more than 100 countries, been falling by around 1% per companies cut back on business
The number of wireless users including 41 networks in 20 annum over the last 18 months travel, the European mobile voice
on 3G services continues to rise. countries in the Latin America and in Western Europe, and dropped market is set for a challenging
Informa estimates that there are Caribbean region. by over 3% in the third quarter,” 2009.”

JAN 2009 . ISSUE 46 2

 GLOBAL DIGEST

Huawei News

Huawei to open Network Innovation Center for further Huawei opens R&D centre and training centre in Indonesia
collaboration with Telecom Italia Dec 2008, Jakarta, Indonesia, PT. Huawei Tech Investment.
Huawei launched its R&D centre Huawei has maintained a
and training centre in Jakarta. strategy of continuous customer-
The new R&D centre is a centric innovation. Product R&D
wholly-owned unit of PT Huawei has remained responsive to
Tech Investment in Indonesia projected and actual customer
and it involves around 40 local needs. With the goal of maximizing
experienced engineers at the customer benefits and values,
beginning stage. The R&D Huawei continuously improved its
centre will focus on developing technologies, solutions and services.
customized application software As part of an integrated product
design for Indonesia market. This development processes, Huawei
will enable Huawei to develop reinvested no less than 10% of
services that will benefit its operator sales revenue in R&D and 10% of
partners, especially in content and the R&D budget in cutting-edge
value–added services (VAS). technologies and fundamental
Dec 2008, Rome, Huawei and mitigate digital divide, save energy
Huawei also established a technologies every year.
Telecom Italia signed an agreement to and reduce CO2 emission. This will
state-of-the-art training centre in Huawei's R&D system is now
kick-off a Network Innovation Centre bring significant economic and
Jakarta. The training centre will applied worldwide, strategically
(NIC), which is aimed at accelerating social benefits, protect environment
have the next generation network located in the US, Europe, India,
the development of advanced and contribute to mitigate global
equipments including NGN soft- a n d t h ro u g h o u t C h i n a , t h u s
technologies for Telecom Italia. warming issue.
switch, CDMA 1x and EVDO, core leverage on the highest quality
The NIC will focus on research The NIC will work in close relation
network, and access system. Both global human and technological
on green ultra-broadband with Telecom Italia research and
centres are located in Huawei resources. To enhance customer
network, Quality of Services, innovation labs (TILab).
Jakarta office. correspondence and optimal
Quality of Experience, Fixed Mobile "With Network Innovation Centre,
"Our business in Indonesia response, Huawei has established
Convergence etc. to provide more we will study new technologies and
is not only providing leading- joint innovation centres with
services and better experience to solutions to offer a broad range
edge solutions for our partners. Vodafone, British Telecom, Telecom
users in Italy. It provides a platform of benefits to the Italian business
We are also commited in sharing Italia, France Telecom, Telefonica
of both parties to share minds and community as well as the end-
and training talented Indonesian and Deutsche Telekom. These
invent new ideas, methodologies, users," commented William Xu,
engineers to grow together with centres expedite the translation of
and solutions to evolve towards Chief Marketing Officer of Huawei
Huawei in combined efforts to technological advantages into time
ultra broadband solutions, to Technologies.
Indonesia's telecom industry," said and efficiency critical competitive
Mr. Ma Yue, President Director of advantages.
KPN International network achieves 40Gbit/s performance
KPN International has completed is moving ahead with this upgrade
phase one of the upgrade to 40 to 40Gbit/s. Customer demand for
Gbit/s across its European fiber bandwidth and performance have
n e t w o r k . T h e Pa r i s - Lo n d o n - driven this development, and with
Amsterdam links can now run at the upgrade KPN International has
these high speeds, with other key been able to quadruple performance.
European destinations scheduled KPN International has achieved
for completion this quarter. these new service and performance
As part of its drive to provide levels through the widespread
next generation network services adoption of new Optical Transport
to carriers, service providers and Network (OTN) technologies from
corporate users, KPN International technology partner Huawei.

3 JAN 2009 . ISSUE 46

Huawei Marine joint venture launched Huawei named Wireless Broadband Network Vendor of the
Dec 2008, Tianjin, China, Huawei "Some industry-leading Year and NGN Infrastructure Vendor of the Year
launched its new joint venture players have been dominating phase, but were very popular among
company "Huawei Marine the submarine cable market for readers."
Networks" with its JV partner many years. Recently, Huawei "Operator executives and industry
Global Marine Systems Limited has successfully completed the peers as well as Telecom Asia's
(Global Marine). Huawei Marine submarine cable expansion editorial team who have selected
starts business from following projects for CAT, Hibernia, Med us for both of these prestigious
an unveiling ceremony in Tianjin, Nautilus, and Level 3. Huawei awards," said Mr. Charles Huang,
China. Marine will bring together both Huawei was named Wireless President of Global Marketing,
In recent years, demand for parent companies' advanced Broadband Network Vendor of the Huawei Technologies.
submarine bandwidth has risen expertise and resources in this area Year and NGN Infrastructure Vendor "Huawei's hard-working and
sharply as operators transition to to provide end-to-end submarine of the Year in the Telecom Asia talented staff is to be congratulated
All-IP networks and as consumers cable solutions, and offer a new Readers' Choice Awards in Hong for their continued commitment to
continue to embrace more choice for customers," said Mr. Kong on 8 December 2008. providing innovative and customized
bandwidth-intensive multimedia Guo Ping, Chairman of Huawei Telecom Asia's editorial team said NGN and wireless broadband
applications over the Internet. Marine. Huawei won both awards because of network solutions that are creating
According to industry analysis, the "Based on Huawei's optical its leadership in technology innovation long-term value and growth for our
global submarine cable market network leadership, powerful and its contribution to the industry. customers throughout the world."
scale is expected to reach USD2 R&D resources and exceptional "The volume and quality of the "We'd also like to acknowledge
billion annually over the next five reputation for customer service nominations as well as the response and thank our customers for their
years. Based on the huge increase with Global Marine's expertise in from readers has been fantastic," ongoing confidence in and support
in submarine cable market, Huawei the installation and maintenance Mr. Joseph Waring, Group Editor for Huawei's next generation fixed
Marine will gradually establish of subsea systems, Huawei Marine of Telecom Asia said. "The voting and wireless network technology
a s t ra t e g i c p a r t n e r s h i p w i t h is committed to becoming a world- was extremely close in a number of solutions over the past few years,"
customers throughout the globe, leading submarine cable solution categories, and there were a couple said Mr. Charles Huang, President
and spare no efforts to meet their provider," said Ian Douglas, CEO of of surprise winners that weren' t of Global Marketing, Huawei
demands. Huawei Marine. ranked high during the nomination Technologies.

Huawei records industry first, ships 1 billionth mobile softswitch license

Dec 2008, Shenzhen, China, world's first 3G mobile softswitch for Infonetics Research said, "Over dramatically, culminating in today's
Huawei announced it has now with separate architecture in the the last few years, mobile telecom milestone. Notable customers include
shipped over one billion licenses for United Arab Emirates. In 2004, networks have been revolutionized Vodafone, Orange, KPN, Telenor,
its All-IP based mobile softswitch. the company created the world's by changing from TDM-based Reliance Telecom, MTN, and Etisalat.
This significant milestone was l a rg e s t I P m o b i l e s o f t s w i t c h centralized control to IP-based Mr. Cai Liqun, president of
reached only five years after Huawei network in China. And in 2008, distributed control. Huawei's flawless Huawei core network product
shipped the industry's first mobile Huawei launched its service quality execution in delivering a reliable line, said, "Our expertise in
softswitch and it is the first time any management solution to simplify IP and scalable softswitch since the IP technologies is focused on
manufacturer has reached this level. core network maintenance. Huawei beginning of the migration has providing significant benefits for
Huawei softswitches are speeding continues to lead in the technology helped to accelerate that trend, as our customers as their networks
the transformation of mobile development of IP mobile core shown by their being the first vendor undergo IP transformation. We
networks to All-IP in more than 100 networks to help operators build to achieve this milestone." remain committed to customer-
countries. more open and flexible mobile core Huawei's focus on customer centric technology innovation
Huawei launched its IP-based network architectures in a cost- needs has resulted in continued and creating maximum value for
mobile softswitch solution in 2003 effective way. increases in the number of customers operators so that they can provide
and, in the same year, installed the Stéphane Téral, Principal Analyst and the capabilities have expanded the best services for end-users."

JAN 2009 . ISSUE 46 4

 VOICE
VOICE FROM OPERATORS

FROM OPERATORS

Telecel Globe strides across Sahara

The mobile business is as hot as the sun in Sub-Saharan Africa despite being underdeveloped with a lack of fixed
network infrastructure. According to an ITU report, there were more than 65 million new mobile subscribers
in Africa in 2007 and operators are looking to cash in. Mr. Yasser Abdel Naby from Telecel Globe, met with
COMMUNICATE to share his views on how Telecel Globe sees the Sub-Saharan market and its strategies to
explore the market, capitalize opportunities and meet challenges.

By Joyce Fan

O rascom Telecom is among

the largest and most
diversified network operators
in the Middle East, Africa,
Bangladesh and Pakistan. They withdrew
from the Sub-Saharan region from 2003 to
opportunities and meet challenges. He
believes it is a good time to invest in this
growing market.

Timing is everything
Choosing markets
Investors seek markets that have growth
potential, economic and political stability,
liberal regulators, and consistent policy.
Mr. Naby stated the same criteria. When
2004, but with rising subscriber numbers, Mr. Naby began by saying, “Telecel talking about economic stability, he added
it is a whole new ball game in 2008. Globe mainly focuses on acquiring networks that the revenue being in local currency is
Orascom set up a new company in emerging markets where we consider an important factor to be considered.
called Telecel Globe to capitalize on the there is great potential growth for telecom. In Telecel Globe’s perspective, the
new opportunities in the region. Telecel We are focusing on countries mainly in developing countries have considerable
Globe is on the lookout for investments Africa and Asia at this moment. You will growth potential. “Most countries have
and market penetration in previously find that the majority of the growth in the great potential, but not all countries
unprofitable or marginally profitable parts mobile industry is mainly coming from have the great growth potential available
of Africa and Asia where the subscriber Africa. So it is considered very attractive in Africa, especially Sub-Saharan. On
growth rate has taken off over the last for telecom operators. There is more than the other hand, it would be a good
couple of years. one operator now in each market. Having opportunity for us if the growth potential
Mr. Yasser Abdel Naby, Networks several operators is increasing the room for is coupled with political stability.”
and Projects Director at Telecel Globe, competition, and putting more pressure on
met with Huawei COMMUNICATE quality, tariff reduction and services, and
to share his views on how Telecel Globe therefore, we believe that this is leveraging Optimizing, not cutting
sees the Sub-Saharan market and its the standards of the telecommunication and
strategies to explore the market, capitalize IT industries.” The Sub-Saharan region is known for

5 JAN 2009 . ISSUE 46

The majority of the growth in the
mobile industry is mainly coming
from Africa. So it is considered very
attractive for telecom operators.
—Mr. Yasser Abdel Naby, Networks and Projects
Director at Telecel Globe, Orascom

JAN 2009 . ISSUE 46 6

 its poor infrastructure and connections, areas. WiMAX is being considered a very To bridge the digital divide is most
while customers desire affordable viable technology.” relevant in Africa. What is Telecel Globe’s
communication services. We asked Mr. Alternative energy is also a way to plan to connect the unconnected and serve
Naby what he thought was the key to optimize OPEX. According to Mr. Naby, the lower-end of the market?
success in the low-ARPU market. solar, wind and other alternative energy “Actually, we are already working on
“Our main challenge in regard to sources will alleviate cost problems. Africa this by exploiting the market potential in
the competition is to launch a high is a hot continent with plenty of sunlight the African market. We are leveraging on
quality network with CAPEX and OPEX and solar energy may be the best solution. the telecommunication capabilities. We
optimization. Technology and equipment “We are currently using generators as also have very good development in IT
can reduce the CAPEX.” the source of power, however we are closely infrastructure. We have different service
For sustainable growth, operators have monitoring the development of the solar portfolios depending on the users. For
to launch an affordable service that is energy. As soon as the solar energy reaches example, we have WiMAX data services
reliable and not of lower network quality. the mass deployment phase the prices will for the fixed users, we have a full portfolio
Regarding CAPEX and OPEX, it is not go down and it will achieve the desired of mobile services including 2G, 2.5G
simply about cutting costs and using less OPEX reduction.” and we will go 3G depending on the
expensive equipment, but the proper When talking about popular practices market requirements. We are offering a big
optimization that is crucial. Telecel Globe in optimizing CAPEX and OPEX, Mr. spectrum of services,” Mr. Naby said.
strategy includes leveraging the power of Naby feels that no business model is Some observers argue that it is too
advanced technologies in developing the definitely the best one, and situations early to implement 3G service in the Sub-
telecommunication & IT standards where should be judged individually. Saharan region considering the income
it operates together with offering high “Like managed services, it is probably level is relatively low and there is not a
quality services at affordable prices. different in the African market compared strong demand for data services.
Using shared platforms to implement to the European market, as the income To Yasser, the 3G is becoming different.
different technologies is one method to and competence levels as well as growth “I agree with the statement about the
optimize CAPEX. potential in Africa are different than in average income which directly drives the
Mr. Naby said, “Looking at Africa we other areas of the world. Managed services ARPU in Africa, and the penetration
found that operators have started to focus might not always be the most viable rate for the data services, are all factors
on data services, however, to efficiently model, it is situational and varies from one indicating that this is not the right timing
use shared platforms, there should be well opportunity to the other. to go for 3G. But on the other hand, the
defined and comprehensive guidelines And looking at RAN sharing, as a 3G implementation is different now from
from the regulatory bodies in Africa which technology, it needs to be very creative and what it was before. Now, many vendors
is not yet the case.” very powerful in its regulation. Therefore, have equipment which supports both 2G
Using effective technology suited to the I don’t think this kind of regulating will be and 3G. So, you will find the CAPEX
market is another aspect to consider. Telecel available for the markets we are exploring. It for 3G is highly optimized. Now it is
Globe is quite interested in WiMAX. is too early because the regulators need to be possible to offer 3G services with 2G and
“We see WiMAX as a very effective developed to have the capability to do this.” 2.5G capacity. This makes a new positive
technology for fixed networks. Because it dimension in the business case of 3G.”
actually offers VoIP, as well as IP Internet,
which is very relevant in Africa because Different 3G for a Editor: Gao Xianrui [email protected]

there is no widely used DSL in remote different life

“The 3G implementation now is different from

what it was before. You will find the CAPEX for 3G is
highly optimized. Now it is possible to offer 3G services
with 2G and 2.5G capacity. This makes a new positive
dimension in the business case of 3G.

7 JAN 2009 . ISSUE 46

 VOICE
FROM OPERATORS

Leap Wireless
Making a difference in customers’ lives
Leap Wireless International, a U.S. wireless operator, provides innovative, high-value wireless services to a fast-
growing, young and ethnically diverse customer base through its Cricket® brand. With its growing coverage
and rich service features, Leap is committed to making people’s lives better through better communication,
especially for those whose basic and advanced wireless needs have not been met by traditional communications
companies. COMMUNICATE met Doug Hutcheson, the company’s President and CEO and Glenn Umetsu,
Executive Vice President and CTO, who shared their operational success and business ambition.

By Julia Yao

C
OMMUNICATE: We know Our customers use their wireless service plans are rapidly reaching market
that Leap serves a diverse differently than the average mobile phone saturation. Wall Street analysts predict U.S.
market segment. Can you user. They talk an average of 1,500 minutes wireless penetration will reach 80 percent
describe your customer per month–more than double the wireless by 2010. Additional penetration is expected
demographics and their usage patterns? industry average and over two thirds of to come from the market segments we
Doug Hutcheson(CEO): Our our customers no longer have a land-line currently serve. Second, the young and
customers are younger, and they are phone and depend solely on our phones for ethnically diverse users are the adopters of
more ethnically diverse. They tend to communication. So, what we are doing is new services. Because they are younger, they
have a lower income. (According to Leap really help them communicate and make adopt new services faster than the other
Corporate Presentation at UBS 36th their lives better. customers. So, if you look at what we have
Annual Global Media & Communications done over the last 3 years, we’ve actually
Conference, 57% of Leap’s customers COMMUNICATE: Your customer increased our ARPU by 6 dollars. We’ve
are from ethnic groups, compared with segment covers the medium and lower done that by driving more products at those
just 10% of traditional wireless carriers. demographics. Some people may doubt customers. In our most recent success years,
Additionally, 79% of their customers report the profitability, or ARPU-capability we launched our RBT, and in a little over
that they make less than USD50,000 per of such a customer base. What are the 30 days after we launched that, we exceeded
year, whereas just 48% of customers from market opportunities underlying your all the other operators’ average penetration
other wireless carriers report the same. 62% market strategy? that had taken them two years. So, by
of their customers are younger than 35, Doug Hutcheson: There are basically driving more products at those customers,
compared with 39% industry average.) two things. First, contract-based wireless we are well positioned to capture this

JAN 2009 . ISSUE 46 8

 Over two thirds of our customers no longer
have a land-line phone and depend solely on
our phones for communication. We make a
lot of difference in people’s lives.”
Doug Hutcheson, Leap Wireless President and CEO

market opportunity and increase its market Doug Hutcheson: Actually, our In addition to the broadband initiative,
share. upgraded network enables us to deliver a we are also able to deliver a series of
series of advanced options. We are proud advanced options, not only the recent
COMMUNICATE: What are the to lead the industry by introducing an announcement we made with a relationship
special features or differentiators of unlimited mobile broadband package with Fox Interactive but, in addition, other
your products and services to cater your that fits within the budgets of everyday ARPU-enhancing features in 2008 such as
customers’ needs? consumers. When we launched our mobile the download of video clips, download of
Doug Hutcheson: Our products tend broadband service in 2008, we found that music tracks, the recently launched mobile
towards being a value leader in the market, it exceeded our expectations for acceptance video and other initiatives that will be
and we aim to provide the best value by our customer base. We thought there available, either bundled or on an à la carte
unlimited services in the market. Cricket® might be in the first quarter of commercial basis. We look forward to expanding both
is our leading wireless brand. Cricket® is a service about 10,000 customers. Instead, we our web activities and streaming upgrades
simple, affordable wireless service offering told Wall Street analysts in our conference in 2009.
consumers and local businesses a flat-rate call for investors that we had achieved
unlimited service over the latest technology, 14,000 customers. By the end of 2008, COMMUNICATE: Although from
high-quality, all-digital CDMA2000 1X we have already gained approximately an average rate per user Cricket® is one-
and 1xEV-DO wireless network. Moreover, 150,000 customers, far exceeding the third less than the industry average, the
Cricket® is the pioneer of unlimited services 100,000 forecast. For a company like ours services are not compromised. Cricket®
with no long-term commitments or credit which focuses on the medium to lower still delivers adjusted EBITDA margins
checks required. Cricket® offers customers demographic areas, it is very exciting for similar to other leading wireless telecom
access to a variety of the latest devices us, and shows that new technology with a companies. How do you achieve that?
and feature-rich mobile applications such great supplier like Huawei can make a huge Doug Hutcheson: We relentlessly focus
as unlimited text, instant and picture difference in people’s lives. on costs. We have an industry leading cost
messaging, Mobile web, popular games, The major broadband usage is primarily position. We produce our minutes for
ringtones and wallpapers. But when you Internet access. A lot of users are putting it less than other operators, and we sell our
compare the price with those offered into their computers at home like DSL, to minutes for less than other operators. Cost
by large national carriers like AT&T or have the access to the outside world. That differentiation is a very critical component
Verizon, you will find that we would save is very exciting for many of our customers. for us. In order for us to offer the value-
our customers more than 600 dollars a year, For the first time people in this customer laden service plans we must keep our
which is a big saving. segment are receiving fast broadband operating costs low.
services. On our broadband product, what
COMMUNICATE: That’s very we were finding was that, over half of our COMMUNICATE: We notice that
impressive indeed. Spending much less customers only had dial-up access before. many of your services are unlimited.
on their bills, can your customers still So we are really helping them, leading them This must have generated heavy network
enjoy advanced options, such as mobile get higher speed data services, which is traffic, giving you some issues with
broadband? pretty exciting for them. network capacity. Then, how do you

9 JAN 2009 . ISSUE 46

 “We know the future will be in data, it is a
very important component for our success.
We look forward to continuing our fine
collaborative work with Huawei, as we plan
for a very exciting future.
Glenn Umetsu, Executive Vice President and CTO

manage the heavy network traffic? that we are building out, thanks to Huawei 2009 and offer rev. A service.
Glenn Umetsu: We find that the usage in part, up to another 50 million covered We will probably consider LTE for the
is about double what it would be for bigger POPs so we can cover about half of the US future. We believe that makes a lot of sense
carriers. That certainly presents some population, or little less than half. Those for the spectrum that we have. On the other
challenges. But with good engineering, new POPs, or potential subscribers, are in hand, we are quite open to either LTE or
business planning, and excellent quality new cities which will come online in the WiMAX, depending on if we are fortunate
products from Huawei, we can make sure next year or two. Then the third growth to acquire other spectrum. We will use one
that we provide not only the right amount driver what we have is the broadband or the other technology. So, we know the
of capacity at very reasonable costs, but product. As we hit 150,000 subscribers by future will be in data, it is a very important
also we’re finding that it is very high quality the end of 2008, we see that to be a very component for our success in the future.
at the same time. People won’t sacrifice nice growth curve, which will be really We look forward to continuing our fine
price for quality. So you have to be very useful to our business. collaborative work with Huawei, as we plan
competitive with quality. Because we sell for a very exciting future.
the service for much less, we have to have a COMMUNICATE: On the network
very good cost structure as well. We think engineering side, how does your network COMMUNICATE: We will be looking
that we can be very successful because of support your future growth? forward to Leap’s great leap in the future.
the fine quality that Huawei is providing to Glenn Umetsu: We certainly know that And we believe with your wider business
us. we are going to have to continue to evolve. coverage and richer advanced service
The company has invested significant options, you can help more customers
COMMUNICATE: You have money in our networks to have them communicate better.
succeeded in doubling your business size be the latest technology, and we see the Doug Hutcheson: We make a lot of
in three years ending 2007, and you are benefits of that occurring not only in our difference in people’s lives. As I mentioned,
aiming for another doubling by the end ability to provide services to our existing over two thirds of our customers no longer
of 2010. What are your major drivers for voice customers but also with our mobile have a land-line phone and depend solely
that growth? broadband initiative. We have one full-time on our phones for communication. This
Doug Hutcheson: We have three EVDO carrier across all of our markets, and is a stunning statistic in a very mature
principal drivers for additional growth: all of our networks are connected to a data market like ours. So we make a difference
enhancing current markets, the launch of superhighway. in people’s lives. Also, Huawei is making
new markets and introducing new products We’ve invested USD165 million a huge difference in the United States and
and services. First of all, we operate a core over the last three years to support this North America, and you too are really
business that is growing nicely covering initiative, and now we’re beginning to doing something that changes people’s
about 61.7 million covered POPs as of the see additional benefits as a result. Our lives. The world is a better place when
third quarter in 2008, and that has a lot of new markets are all launched with rev. A we communicate. With a shared vision,
growth potential. We think we will achieve equipment, both the networks and the together we can enrich people’s lives
an attractive increase in penetration out of handsets, and we expect to upgrade our through communication.
that by the end of 2010. The second area is existing business networks to rev. A during Editor: Gao Xianrui [email protected]

JAN 2009 . ISSUE 46 10

 VOICE
FROM OPERATORS

Yemen Mobile is aiming high

The Arab Advisors Group projects Yemen’s cellular market to grow at a CAGR of 15.7% from 2008 to 2012,
reaching 10.537 million subscribers (a cellular penetration rate of 42.4%). At the same time, the entrance of
a fourth cellular operator in 2007 has enhanced competition in the Yemeni cellular market. COMMUNICATE
invited Mr. Sadek M. Mousleh, CEO of Yemen Mobile to share with us their experiences and strategies in market
development and network expansion.

By Julia Yao

C
OMMUNICATE: We know best call tariffs in the Yemeni mobile phone profit. We find that there is a strong
that Yemen Mobile has market. We are honest to our subscribers demand for high-speed data services from
the biggest market share and our reputation is very good. With those business clients, which unfortunately
of 32% and is a respectful wider network coverage, new 3G services is not met by the current services available
and valuable brand in Yemen telecom and attractive tariffs, we are confident that in the Yemeni market. We also notice that
market. How will Yemen Mobile we can gain a substantial number of new these customers don’t really care about the
prepare, in terms of business operation, subscribers, both on the high-end and low- prices of such services as long as they get
network construction, etc. to grasp the end, in the competitive Yemeni market. these services. We will provide them with
strong market growth and maintain a a comprehensive service portfolio covering
competitive edge? COMMUNICATE: The teledensity voice, data and roaming. Moreover, the
Mr. Mousleh: We have a plan for the in Yemen is among the lowest in the oil companies are usually located in some
coming years to attract new subscribers. Arab states. I guess many Yemeni people rural areas or even deserts. While it is
Firstly, as the only operator with 3G are just starting to use mobile phones costly and difficult to deploy cable in those
license, we announced in June 2008 that for basic voice connection. Do you environments, for mobile services, it is
we would upgrade our CDMA network think there are sufficient demands to feasible and fast to deploy. This makes a lot
to provide EV-DO services in 2009. We justify your 3G initiative? What are of sense for our decision to go for 3G.
hope to attract more business subscribers the timetable for network deployment, We have contracted Huawei for the
towards our fast-speed data services. In service rollout and business strategy? network EV-DO upgrade project. We
addition, we are working hard to increase Mr. Mousleh: Our 3G services will plan to launch 3G services by March 2009
our coverage to cover all Yemen rural areas. target VIP customers such as oil companies in some main cities and locations of oil
Also it is worth noting that we offer the and banks to increase our revenues and companies in Yemen.

11 JAN 2009 . ISSUE 46

 “Our 3G services will target VIP customers
such as oil companies and banks to increase our
revenues and profit. We find that there is a strong
demand for high-speed data services from those
business clients, which unfortunately is not met by
the current services available in the Yemeni market.

COMMUNICATE: You mentioned generators or solar cells, depending on the launched in Sudan, Morocco, Mauritania
that you are going to expand your BTS capacity and power consumption. and many more countries. As the number
network coverage for rural areas. Could I mean in dense rural areas, we have to of CDMA operators increases, it helps
you briefly introduce the deployment install large BTS for which solar can not us to solve this problem because of scale
plan? support the required energy. We are glad of economy. We are contacting and
Mr. Mousleh: Among our 1.9 million that with Huawei’s new BTSs which have encouraging suppliers to sell handsets to
subscriber base, about 30 percent of which lower power consumption, we are able to the Yemeni market and also the Arabian
represent rural subscribers. Before we use solar energy even in some rural areas country market.
were focusing on urban cities, and now with high capacity. Roaming used to be a problem and it
we have plans to move to rural areas. One is solved now. We made a contract with
advantage Yemen Mobile has its large COMMUNICATE: Yemen Mobile is one GSM partner and it can support
network coverage compared to that of its the only CDMA operator in the Yemeni international roaming in 200 countries.
competitors. We are the first operator in cellular market. There are a couple of So any subscriber of ours can make phone
Yemen to have covered most of the country issues common for CDMA networks, calls when he travels abroad. But still, he
of which about 70% of the populated such as limited handset choices and needs to insert his CDMA card into a GSM
areas. Now, we are trying to cover the rest roaming constraints. How do you see phone while roaming outside Yemen.
of the rural areas also. We plan to install those issues affect your business and
60 new base stations in 6 months, most of how would you cope with those? COMMUNICATE: How do you see
which would be in rural areas to provide Mr. Mousleh: The lack of handsets is Huawei could help you, in addition to
both voice and data services. a problem for us. Actually, it has hindered providing network equipment?
our attempt to launch more innovative Mr. Mousleh: We consider Huawei as
COMMUNICATE: The rural services, such as MMS, SMS long and our partner and also consultant. We began
environment is often characterized by cell broadcast. It’s still a problem, but working together from the beginning of
under-developed infrastructure, lack of somehow it has improved. We are looking 2001 before Yemen Mobile was officially
power and cost pressure to serve low-end for possible solutions such as buying from established. During the past years, with
customers. How do you cope with these more suppliers and are considering asking the assistance and support of Huawei, we
challenges? handset vendor to customize handsets for started business from CDMA WLL which
Mr. Mousleh: We have the same our subscribers. progressed to mobile CDMA now evolving
challenges in rural areas, and this makes Now we have a lot of suppliers and to EV-DO. We saw our subscriber base grow
going for the rural areas costly for us. We the price is relatively good now. You can from zero to 1.9 million. We have compared
decided to roll out deployment gradually now find handsets priced at 50 to 300 several suppliers, and found Huawei’s
and find out the most suitable alternatives. U.S. dollars whereas you would not find solutions and prices are the best. Huawei can
For example, in areas where there is no handsets less than 150 U.S. dollars before. really deliver customers’ requirements.
electricity, we would either use our own In addition, CDMA recently has been Editor: Gao Xianrui [email protected]

JAN 2009 . ISSUE 46 12

Convergence • Tailored solutions

By establishing open SDP and CBS platforms that can be integrated with
telecom networks, BSS/OSS, and the Internet, operators can achieve quicker
delivery of value-added services. This not only helps operators obtain a more
competitive edge in intensive market competition and cooperation, but also
helps them to gain greater control of the value chain. An analysis of the latest
development occurring in ICT industry through the application innovation
center (AIC), suggests that operators can develop practical solutions that are
able to meet present market demands and cater to most customers’ habits.
Furthermore, all efforts on the part of operators should be customer-oriented,
aiming at delivering services tailored to customers’ specific demands!

13
14 Vodafone AIC: The fruit of collaborative innovation
17 SDP delivers more than speed
19 SDP construction benefits from IN operations
21 The new world of convergent billing

Vodafone AIC:
The fruit of collaborative innovation
By Chen Danbo

V
odafone Spain and Huawei signed a current, major challenges for Vodafone, and what are
memorandum of understanding (MOU) at your considerations for setting up the AIC?
the end of 2007 to establish the Vodafone Fernando: We currently face two major challenges.
Application Innovation Centre (AIC) in One is maintaining growth, the other is minimizing costs.
Madrid. Signed by Francisco Roman, CEO of Vodafone While this requires new revenue streams, the pivotal factor
Spain, and Dr. Che Haiping, President of the Huawei is optimized efficiency in terms of lowering CAPEX and
Application and Software Product Line, the contract OPEX. Broadly, we intend to increase our service range
ratified Vodafone’s commitment to innovate A&S and offer services to customers at a lower price.
solutions’ through a domestic testing process. To do so, we’re seeking flexible service solutions with
The two companies’ combined knowledge of mobile minimized TCO. They must be tailored to customer
networks and applications has to date been channelled needs, reach the market quickly, and be inexpensive to
into new technologies and business models relating to develop and run. If this were easy, we’d have already done
the project. To gain greater insight into the effectiveness so, but it’s a highly complex process. Previously, we worked
of the AIC’s operations over the past year, Huawei with vertical platforms and applications, but we now need
COMMUNICATE talked to Fernando Molina Zamora, greater flexibility via platforms that define new business
Head of Products, Services & Innovation, and Santiago models for customers and partners. In this sense, the
Borrero Ortiz, Head of Innovation at Vodafone Spain. AIC provides an optimum platform to meet Vodafone’s
innovation needs.

AIC on target COMMUNICATE: Could you briefly introduce

the AIC’s operations? How do you generate ideas for
COMMUNICATE: Spain has always been a innovation?
forerunner in the pursuit of innovation. What are the Santiago: We hold formal, By Wang meetings
quarterly Kening &between
Ling Yun

JAN 2009 . ISSUE 46 14

 “We currently face two major challenges. One is maintaining growth, the other
is minimizing costs. While this requires new revenue streams, the pivotal factor
is optimized efficiency in terms of lowering CAPEX and OPEX.
–Fernando Molina Zamora, Head of Products, Services & Innovation

our R&D and Marketing departments ambitions. other regions to create success stories for
to study all the projects in which we are The AIC is the basement out of which Vodafone in Europe.
planning to be involved. If we have an we innovate and test Vodafone software to The other is Huawei’s technical
idea for innovation, like ZoneTrigger for develop services for the European market. capability and proven responsiveness, as
example, we’ll find some local R&D and The measure of the AIC’s success is the evidenced in our previous partnerships.
marketing people to focus as much as success of the services it generates. While our cooperation with Huawei has
possible on local services. We can then Santiago: I see the AIC as a natural been confined to other areas, we think that
find out if the market really needs the station for developing new ideas. When our mutual success will continue in the
solution. This accelerates the success of the someone in the Vodafone community applications arena.
innovation process and avoids wasting time. has an idea, there should be no confusion Furthermore, Huawei is also
We hope everything we do locally is about its destination; it should go to the characterized by its solid commitment to
aligned with European market. Though AIC for incubation and growth. From the innovation and cooperation with other
we may allow some leeway due to market idea, comes the solution. I see the AIC large enterprises. This proactive and
variations, it’s increasingly obvious that as a farm for new ideas deriving mainly responsive approach convinced us that
we can succeed in other countries as we’ve from Asia. The AIC develops, spreads, and Huawei was the right choice for the AIC.
done here in Spain. So, the key point is to communicates these ideas.
expand our efforts to other regions in the COMMUNICATE: After almost one
world. year of cooperation, what’s your view of
Partner selection Huawei?
COMMUNICATE: The AIC was set Santiago: Steve Pusey (Vodafone
up about a year ago. How have things COMMUNICATE: Have Vodafone Group CTO) and Jaime Bustillo (Vodafone
gone so far? previously set up similar centers with Spain CTO) began our partnership with
Santiago: Let’s first review the process other companies? Huawei in China in October 2007, which
up to now. The first phase was to discuss Santiago: We’ve established innovation- extended to Spain in November. Later, we
the center, during which time we solidified centric partnerships in the past, but signed the MOU. It’s been one year since
our relationship and the related processes. they weren’t as formal as the AIC, and then.
The second phase was the creation of the simply focused on particular projects. So far my experience has been
centre from scratch. Now we have entered The AIC has been set up with long-term extremely positive. We continue to enjoy
the third phase: the AIC is up and running cooperation in mind. a constructive relationship with Huawei,
and we have involved several Vodafone who we view as the leader in the Asian
teams. From this, we’re expecting to grow COMMUNICATE: Why did telecom market. The company’s capabilities
and deliver results. In fact, we’re already Vodafone choose Huawei as a partner to include bringing Asian innovation and
generating output from the perspective build the AIC? experience to Europe, and we believe that
of pure innovation. There are various Fernando: Compared with other Huawei can add value to Vodafone in
projects on the table that we’ve developed vendors, Huawei has three prominent terms of market positioning and service
and plan to commercialize, thus bringing advantages. provision.
innovation to market reality. The first is the experience Huawei We conceive and develop ideas together,
has in Asia and other markets and the and in this context, Huawei has the
COMMUNICATE: What is your knowledge it has gained by developing capability to fully adapt to our technical
expectation for the future of the AIC? solutions in these markets. Huawei has and business requirements. In particular,
Fernando: We expect the AIC to rich experience in other markets. Although Huawei demonstrates its high flexibility
contribute to the continuous success of market conditions are not identical in and rapid response capabilities that are
our company in the market. The AIC is different regions, Huawei’s accumulated vital to our success.
not the only initiative that Vodafone has knowledge transfers to our market where
underway, but we anticipate that it will
contribute significantly to Vodafone’s
it can be tested, and then refined and
adapted as necessary. We can exploit
Innovation and
success and allow us to achieve our the lessons learnt from other projects in expectation

15 JAN 2009 . ISSUE 46

 Huawei Communicate

“I see the AIC as a natural station for developing new ideas. When someone
in the Vodafone community has an idea, there should be no confusion about
its destination; it should go to the AIC for incubation and growth.
–Santiago Borrero Ortiz, Head of Innovation at Vodafone Spain

COMMUNICATE: Companies call technology as an example, it is not Call Center service, and so on. Attractive
need innovation to push them forward. being used in the same ways we saw in the service packages enhance customer
Innovation has been a buzzword for movies. So what’s happening? relationships and loyalty. We aim to give
years. Is there any difference between In reality users adapt at a certain pace our customers what they want, which is
today’s innovations and those of the to innovations. We have to develop and the key to achieving and retaining a solid
past? What are the principal differences? adapt interfaces in a way that is compatible customer base.
Fernando: Innovation has been with the things people have already. An
vital since the inception of mobile innovation has to be comfortable and
communications. The Internet experience convenient for people to use. The only Editor’s note
has shown us that innovation cannot certainty is that we don’t really know
operate through a single company in a what will be accepted or in what form The Wireless Application Protocol
closed loop anymore. something will be accepted. (WAP) is gradually losing its attraction for
The AIC embodies an open cooperative SMS is a huge success, but its initial mobile operators’ end users. One reason
platform between Vodafone and Huawei design anticipated its use as a low-key for this is that connection to a WAP
that will act as a springboard with future business tool, a kind of pager. Now, it is site takes too long in a circuit switched
cooperation with other companies. If we central to people’s daily communications. network. To fully utilize a data service–
build capabilities together, these may be If its creators said they anticipated its such as purchasing stocks–several screens
employed by other partners of Vodafone enormous market dominance, they would must be opened and numerous keypad
to provide more effective solutions. This is probably be lying. The only thing we can operations must be completed. Subscribers
the main change that has happened when say about the future is that it demands prefer a more efficient, direct way to
comparing past and present approaches to adaptation. We have to be prepared to easily surf on the mobile Internet via their
innovation. Implementation methods are change whatever we build. cellphone.
completely different, and the competencies Santiago: We’re dedicated to iPhone is a pioneer of Internet access
needed for success have changed. innovating and launching the fruits of through the cell phone platform. It
However, let’s not get obsessed by the AIC in the market. Basically we need emerged at the right time, and quickly
innovation by itself; it is useful simply as far to be very flexible and very quick with became iconic as a tech savvy fashion
as it serves the needs of customers. There services, maximally shortening the time statement. However, is there any solution
are too many technological innovations to the consumer. Innovation focused on to create more iPhones out of ordinary
that have not been successful in the market the end user is the crucial point. Platforms mobile phones and bring iPhone functions
place, not just in the mobile industry, are useful for operators, but only services to the masses? This issue is the tip of
but in any industry you can think of. are useful for end users. Zero end users the iceberg in the evolving process of
Many technological innovations that were translate into zero revenues. the application and software market.
technically astonishing failed because they Exploiting opportunities of this type is
were not tailored to the needs of people COMMUNICATE: What’s an ideal exactly what Vodafone expects from the
at that time. Often, they were either too future for the end user? AIC.
advanced or complex, or the timing was bad. Santiago: In this context, the enterprise Vodafone aims to create the optimum
is the end user as employees don’t pay for user experience by providing abundant
COMMUNICATE: What’s your the services they use at work. So, with differentiated services and high-quality
vision for the future of innovation? this distinction in mind, the ideal future content. It seeks to effectively manage
Fernando: I’ve dedicated almost ten for the end user is a platform that allows third parties and the whole industrial
years to the field of innovation. Whenever the use of all services anywhere and at chain, launch precision mobile ads, and
you ask people about their vision of the anytime. We provide top quality voice and realize full-service interconnection and
future they tend to give answers based data services for our customers and we’ll interoperability. Vodafone is anticipating
on Sci-Fi movies. The strange thing is continue doing so. Also, we’ll add a range the jump to this ideal mobile application
that some of the technologies seen in of new Vodafone and third party services state. As the AIC proves, Vodafone is on
movies, for example, video calls, have to cover end-users’ needs. For example, the road.
been developed. However, taking video customers can access Vodafone Live!, the Editor: Joy Zhou [email protected]

JAN 2009 . ISSUE 46 16

 Convergence • Tailored solutions
SDP delivers more than speed

SDP delivers more than speed

The service delivery platform (SDP) has greatly helped to shorten the time to market (TTM).
It used to take approximately 5 to 12 months to introduce a new service, but presently it only takes
about 5 weeks. Needless to say, this has certainly helped operators to catch some golden opportunities
in the marketplace.

By Zhu Haoying

SDP forms an edge set of telecom middleware that is located

between the telecom network and its
integrated operator who provides fixed
and mobile services, mainly in Europe and
application/content. Latin America. In recent years, Telefonica

W
ith the gradual convergence Because the SDP can be smoothly has been pursuing a cross-country
of the telecom industry with integrate with the telecom network, integration strategy and is working hard to
the Internet, IT and media, business support system (BSS), operations establish a regionally integrated operation,
the boundaries between support system (OSS), as well as the especially in Latin America. Recently,
these industries have gradually blurred. As Internet, it greatly reduces the TTM of Telefonica joined hands with Huawei
a result, market competition has become new services. It also significantly reduces in a cooperative effort to build an SDP
increasingly fierce. In order to survive in such the CAPEX and OPEX of services and Openness platform that will be able to
a highly competitive business environment, further enhances user experience by rapidly deploy VASs.
it is vitally important for operators to provide integrating telecom services with the According to the CMO of Telefonica
more differentiated and personalized services, Internet. For instance, some studies show Latin American, the SDP project is
while ensuring user experience. that the SDP is currently capable of considered to be a key project which
From a business perspective, the SDP shortening the TTM of a new service to will help increase revenue, quicken the
is wildly recognized by the industry as a about 5 weeks, where previously it took response to market needs, and greatly
powerful platform that is able to support from 5 to 12 months. enhance Telefonica’s competitive advantage.
the differentiated and competitive services As advanced IT technologies such as After implementation, the SDP project
of operators. There are several advantages service-oriented architecture (SOA) are will be capable of supporting Telefonica’s
of using SDP, which are: it enables applied and network is further integrated rapid deployment of a large number of
operators to have better control of the through SDP, the content and application VASs (beyond the basic communication
value chain; it encourages cooperation in c a n b e s e p a r a t e d f ro m t h e r a p i d l y - services). It will also help Telefonica to gain
the industry; and it helps operators avoid developing network access technologies. more market opportunities and further
being “channelized”. According to many It also helps simplify the integration consolidate its advantages in Latin America.
experts, the core value of the SDP lies between existing and future networks. Telefonica’s SDP project is one of the
in its rapid ability to deliver convergent Another added benefit is that it allows largest of its kind in terms of scale and
value-added services (VASs). partners to enjoy lower input costs for the complexity. It uses an advanced SOA and
As an all-in-one solution which development of new telecom services. a cross-country hierarchical networking
specifically targets convergent VASs, the structure that covers 13 countries via
SDP is capable of rapidly providing a Telefonica’s subnets in Latin America.
large number of new services with higher Market opportunities for During the implementation process,
quality and lower costs. Hence, this allows
operators to quickly roll out a larger
Telefonica Huawei was responsible for integrating
various network equipments, along with the
number of new services after deployment postpaid and prepaid systems of multiple
of the SDP. The SDP can be defined as a Telefonica is an internationally known vendors. Huawei has also provided a “wide

17 JAN 2009 . ISSUE 46

 Huawei Communicate

stage” for small and medium-sized service popularity of VASs in Saudi Arabia. architecture, other parts of the SDP
providers (SPs), as well as multinationals Huawei’s SDP solution primarily architecture may be modified and selected,
and large Internet companies. As a result, focused on a unified portal, content depending on the actual condition of the
the network is now able to provide management, as well as CP/SP access and operators. However, the SDP framework
abundant VASs for tens of millions of management. It also focused on multi- fundamentally remains the same. In short,
Telefonica subscribers in Latin America. channel delivery, flexible charging and it is the basis upon which various SDP
The successful deployment of strong marketing support. In addition, it solutions are derived.
Telefonica’s SDP project highlights provided abundant content and services “2” represents two major solutions
Huawei’s competence in executing large- such as downloading, email, RBT, SMS/ currently available at Huawei: SDP Media
scale engineering projects. It also provides MMS and location based service. As and SDP Openness. Both solutions have
a good example of its rapid delivery a result, this changed Mobily’s focus, been elaborately designed by Huawei in
capability, and further amplifies the from primarily providing voice and accordance with the current development
advantages of having the SDP solution. communication services, to now providing of telecom value-added applications.
Huawei also provides a lot of attractive data VASs that highlight infotainment and These solutions primarily cater to core
SDP-based VASs for Telefonica such as content. In the second phase, by targeting SDP requirements commonly sought by
Message+ and the Mobile Newspaper. a user-oriented service delivery model, operators, such as providing medial/content
Furthermore, based on the Huawei provided an SDP solution that VASs and allowing rich applications to
overwhelming success of the SDP project, would enhance Mobily’s capability in the be provided by third parties. SDP Media
as well as promising prospects in the fields of unified portal, community service, and SDP Openness pre-integrate parts
Latin American market, Huawei and and marketing support. developed by Huawei, as well as parts from
Telefonica have established a win-win Upon the construction and successful third parties, along with embedded rich
innovative revenue-sharing business mode. commercial use of the SDP, Mobily was value-added applications. They also help
In addition, Huawei’s participation in able to quickly roll out a number of to optimize rapid delivery of value-added
service planning and operational support personalized mobile data services, which applications for operators. In addition,
underscores its evolution, from being a resulted in a market breakthrough. In they help drive service innovation, increase
traditional telecom equipment producer, addition, the SDP effectively reduced revenues of VASs, and help to reduce overall
to one that now forms partnerships with operating costs for Mobily by integrating CAPEX/OPEX.
operators to deliver better value in software its existing service systems. “3” represents the three features
and service related fields. provided by Huawei in the SDP field:
products, professional service, and a new
The 1-2-3 solutions
A new breakthrough for business model. However, these are not
traditional solutions or product forms.
Mobily How does the SDP help operators For instance, in terms of professional
succeed in the present telecom market? service, Huawei provides multi-directional
Led by Etisalat, Mobily had obtained After several years of concerted effort in the professional services that incorporate the
the second license to operate in Saudi SDP field, Huawei has gradually developed whole process in regards to the design,
Arabia. It deployed a GSM network in July a c o m p l e t e s e r i e s o f e c o Sp a c e S D P planning and implementation of the
2005, and a 3G network in June 2006, and solutions, which can best be summarized SDP. This ranges from business analysis,
currently has a subscriber base of about as “1-2-3”. “1-2-3” provides tailored SDP service planning and architecture design
7 million. Before the launch of its SDP solutions and services for operators. in the preliminar y phase, to system
project, Mobily faced multiple difficulties “1” represents a unified SDP reference integration and custom development in
in terms of its network operation, some of architecture. Huawei provides customized the latter phase, guaranteeing the creation
which included: a small subscriber base, SDP solutions for operators with different of value for operators. In addition,
low ARPU, a lack of high-end subscribers, network conditions. Despite apparent Huawei also offers operators a complete
a shortage of CP/SP resources, and a lack changes, all such solutions are essentially platform in regards to hosting services and
of content/services. the same and in compliance with current joint operations. And finally, it adopts
Faced with an unfavorable market unified reference architecture. Guided flexible and innovative business models
environment, Mobily decided to form a by the reference architecture and its in accordance with operators’ different
partnership with Huawei. After careful supporting methodology, Huawei is requirements, allowing better support for
analysis of Mobily’s existing network and able to provide operators with high- all their service requirements.
operation requirements, Huawei provided quality architecture design, along with The success of Telefonica and Mobily
an end-to-end solution to be carried out a rich variety of services. Through the hinges on the SDP framework’s unique
in two-phases. In the first phase, Huawei tailored SDP solutions, operators can benefits, along with the technical and
provided an SDP Media solution for develop services in the best possible way. service advantages it offers operators.
Mobily, in an effort to help promote the Based on this unified SDP reference Editor: Xu Peng [email protected]

JAN 2009 . ISSUE 46 18

 Convergence • Tailored solutions
SDP construction benefits from IN operations

Past experience guides future practice

SDP construction benefits
from IN operations
By Yan Lixin

F
or the past twenty years, network As many large and powerful operators options for selecting other suppliers.
operators have had the primary did not anticipate these difficulties and Due to proprietary protocols, some
goal of rapid development and fast failed to consider the future upgrade of the operators are not able to swap their backward
deployment of required services, IN protocol of the MSC/SSP equipment, IN equipment and glitches abound in the
which can be available any time and any they did not agree on upgrade issues (such mobile prepaid market as a result. From
where. as time and money) with the MSC/SSP a short-term perspective, proprietary
Intelligent platforms and intelligent equipment supplier in advance. As a result, protocols may bring some benefits to the
networks (INs) have been constructed to upgrade the MSC/SSP from CAMEL operators, but in the long run, the protocols
one after another and now some operators Phase 1 to CAMEL Phase 2, operators had impact competition among equipment
have started to construct service delivery to carry out long-term negotiations and suppliers and are fundamentally not in the
platforms (SDPs). In spite of different forms pay a considerable amount of money. best interests of operators.
and constant technological progress, the The SDP will involve a large number of When constructing the SDP, operators
intelligent platform, IN and SDP basically vendors and many protocols for different should request that equipment suppliers
have the same goal: providing high-quality equipment. Some protocols will have to be follow public protocols and guarantee the
services quickly at a lower cost. rolled out in a phased manner. To ensure interworking among equipment rather
Though the intelligent platform and the that operators’ interests are protected, than setting up barriers on interfaces.
IN have made significant strides, both have they must enter into an agreement with Equipment suppliers should focus on fully
experienced construction problems and the the vendors on the protocol upgrades in meeting the functional requirements of
SDP may also face similar problems in the advance and reach consensus on issues such the operators and improving the internal
future. A careful summary of the experience as time of version delivery, interoperability systemic performance. Equipment
and lessons learned from the construction of test, upgrading engineering and expenses. functionality will be strengthened and
intelligent platforms, especially the IN, will Operators need to learn from past vendors can easily comply with the long-
undoubtedly help us identify and determine mistakes, and take into account the term interests of the operators.
the impact of the SDP accurately and equipment within the SDP project and
facilitate the construction process. other possible equipment on the network
This article reviews experience and lessons which may be connected to the SDP. Suppliers’ partnership
learned from the construction of the IN and
features a comparative analysis of the SDP. There was once a powerful alliance
Proprietary protocols formed by two different suppliers who
combined their respective advantageous
Multi-version protocol In the construction of their INs, products and capabilities, forming an
some operators use proprietary protocols integrated solution to develop the IN
Due to a lack of foresight, there were (provided by suppliers) on the external market. The two parties did not get along
shortcomings in the early inter-network interfaces. A common belief is that the well in the end and operators suffered.
protocol of the mobile IN, which failed introduction of proprietary protocols will This is not an isolated case. There is
to provide sufficient support for some key enhance some service capabilities. frequent acquisition in the industry and
service capabilities in the latter service But in reality, proprietary protocols many examples of failure in internal
implementation process. The CAMEL affect inter working and can present integrations after the acquisition. Many
protocol for the IN was rolled out in a technical barriers to equipment from rigid barriers, disputes and uncertainties
phased manner as a solution. other vendors, severely narrowing operator between departments in internal integration

19 JAN 2009 . ISSUE 46

 Huawei Communicate

can create problems and increase risks, not When constructing the SDP, service promotion and financial feasibility.
to mention the independent suppliers who
do not always cooperate with each other. operators should request that
Compared to the IN, the SDP has a large Service creation
number of components. It does not lend equipment suppliers follow
itself to having individual suppliers provide public protocols and guarantee People think that when an operator
independent solutions for there are too many buys an SDP, they will have a service
opportunities for weak links in the chain. the interworking among creation system and create services in a
Construction of the SDP generally rapid manner. Let’s review the IN.
requires participation of system integration equipment rather than setting What seemed to attract operators the
providers to provide an overall solution. One up barriers on interfaces. most in the initial deployment of IN was
of the more serious problems can be the level creation of services. There was an idea
of cooperation among multiple suppliers. Equipment suppliers should that, with simple training and a clear
Operators need to keep this in mind when understanding of service processes, various
planning; especially paying attention to
focus on fully meeting the service “architectures” could be built quickly
the interaction of the system integration functional requirements of the out of dozens of simple service “materials”.
providers and equipment suppliers. Some operators bought the service
The SDP targets SOA-based operators and improving the creation environment (SCE) equipment
interworking and easy integration among initially and built up some experimental
components. It may not be difficult for
internal systemic performance. services through the connection of various
a good system integration provider to service independent blocks (SIBs) and
integrate an entire project and system on providing infinite combinations. The IN configuration of data and parameters in a
a one-time basis. Generally speaking, it is is able to provide infinite services from the graphical environment. However, it was
simple enough to provide advanced SDP theoretical and technical aspects. However, rare to see operators develop services on
technologies and functions in the first it turns out that services most frequently their own through the SCE and put them
commercial use of the SDP. used are prepaid service, collect call service, into successful commercial use.
The SDP has a very long lifecycle after virtual private network and a few others. The reason is that even though service
its first commercial use. After the SDP is According to experts, simpler services logic may be created through the SCE,
put into operation, operators may need have fewer features and do not need the commercial use of a service requires
customized functions of a component, vigorous promotion, cost less, and have a lot of support such as auxiliary service
or require software or hardware upgrades more users. On the contrary, services with management and operations, most of which
for a certain component of an important more functions and features require vigorous cannot be developed through the SCE.
function. This can become more promotion and higher costs, but have fewer Programming is still indispensable.
complicated when multiple suppliers are users, and operators might finally give up The SDP may encounter the same
involved as times and relationships change. on promoting these services. This view is situation. Operators with power ful
The operator, integration provider, and reasonable to some extent. In the promotion development strengths may develop
one or multiple suppliers may all have of IN services, costs need to be given full services; while others do not need to
different interests in terms of customization, consideration and many small services are develop services by themselves and it
upgrade and related issues. This can not popularized for this very reason. may be better to authorize a third party
sometimes be a toxic situation leading to The SDP may provide more advantages for ser vice development and related
disagreement and delays with the operator as than the IN in terms of supporting new auxiliary support. This is because service
the final victim. It is suggested that wherever services. When services are developed by implementation is sometimes much more
possible, operators adopt overall solutions service providers (SPs), the SPs may seek complicated than it looked like at first.
with a simple cooperative relationship while target users and promote the services, then Although the SDP is already a strong,
system integration providers develop many operators do not have to pay development flexible and open platform, operators should
components themselves. and promotion expenses for the services. keep in mind that the SDP still requires
So, from the theoretical, technical, and extensive software customizations from
economic aspects, operators can support equipment suppliers in its commercial use.
Service types various long-tail services with the SDP. Past experience guides future practice.
Thousands of new services could be The SDP can emulate the practices of the
It is believed that the construction of made available, but it is too early to tell. We IN globally and more. The IN racked up an
the SDP will make thousands of services need to rely on the performance of the SPs. impressive record of significant achievements
available anytime, anywhere. The IN SPs have made it on the Internet, and could and the SDP is expected to perform in an
defined dozens of “standard” services before, also make it on the SDP. Besides offering new outstanding manner as well.
and it abstracted various service features, services, however, operators have to consider Editor: Xu Ping [email protected]

JAN 2009 . ISSUE 46 20

 Convergence • Tailored solutions
The new world of convergent billing

The new world of

convergent billing
By Wang Wei

N
ascent and rapidly emerging inevitably complex due to the number ads in real time. Should online statistics
mobile services based on of variables involved, different parties show that the G1 ads has been particularly
innovative business model being charged, and the speed at which effective, the advertiser may subscribe more
like mobile Internet, mobile they change. One of the major reasons service channels for the ads and offer, say, 10
adver tising, M-payment, etc., have hindering the launch of new services is the minutes free talk-time to ads watchers, or
created a maelstrom of new challenges for lack of an agile BSS. This necessitates the buy exclusive rights for naming a particular
operators, especially for their BSS/OSS parallel development of new services and service. The operator can then embed an
systems. IDC notes that, “It’s likely that their corresponding charging and billing interactive operation into the ad, enabling
Telco 2.0 will be the engine to drive the mechanisms in order to expedite the time users to order the G1 mobile phone or
industry’s growth over the next several to market (TTM). inquire about product information online.
years, but without the right BSS (front In turn, the operator can gain a 5‰
and back office systems) to support these Operators play to their strengths commission of the total sales value gained
initiatives, service providers may stall right from the advertiser at each successful sale.
Given the interplay of telecom
out of the gate.” This type of business model requires
networks and the Internet, operators must
the charging and billing systems to be
fully exploit their unique advantages:
sufficiently flexible. More importantly,
New business models network access control, user data, and
the basic system architecture needs to be
billing & operation relations. It is difficult
beckon for many Internet enterprises to identify a
highly adaptable and online extendable to
meet dynamic business needs.
steady profit-making model as most lack
Telco 2.0 defines new business model a mature and convenient billing relation. Creating new customer value
and a new role for operators in which On the other hand, both network access
customer value is maximized. It embodies control and user data can underpin the Charging systems can affect end user
an open ser vice environment where charging strategies; the former can do so experience actively, especially in terms
network capabilities are open to third party by controlling network resource allocation of mash-up of multiple services, real-
developers to create new applications and as a part of the charging policy, and the time charging notification, real-time
services more easily. In this sense, it is not a latter can offer price plans according to promotions, and payment modes. MTN,
lack of service development that is troubling precise marketing segmentation. a South African operator, and China
operators, nor is it insufficient network or As an imaginary example, let’s use a Telecom provide two apt examples of
content resources. Wang Jianzhou, President mobile advertisement for the new Google innovative charging mechanisms.
of China Mobile, reinforced this view G1 mobile phone to describe the flexible A new service promoted by MTN covers
recently, “While we’re faced with numerous charging scenarios. An operator can transmit its subsidiaries in a number of countries to
challenges, the most pressing comes neither the G1 ads when users access mobile offer user discounts according to the dynamic
from technology nor from the market, but broadband services. The service charge for network traffic based on cell location and
from the business model.” users can be reduced, and the operator can time. Specific preferential entitlements can
From the perspective of charging and bill the G1 advertiser for the shortfall. The be sent directly to the screens of users’ mobile
billing, a new business model may involve advertiser can benefit by learning exactly phones whenever and wherever they want
many charging requirements, which are how many people have clicked the mobile to make a call, which not only considerably

21 JAN 2009 . ISSUE 46

 Huawei Communicate

Collapse of the operation model.

traditional models
Exploring construction
To d a y, o v e r h a l f o f t h e w o r l d ’s
population uses a mobile phone. Since the beginning of 2008, the
Despite huge regional differences in planning and construction of the
communications development and convergent billing solution has been
penetration rates, even operators in prioritized by operators globally. For
emerging markets are feeling a slowdown new networks, an end-to-end convergent
in new subscribers. It is noteworthy that billing system is generally in-built, which
the emergence of various broadband reflects the accelerated rate of change in
access networks, new services, and new the general industry environment.
models from Web 2.0 have opened up a Evolutions to the new generation
panoramic horizon for operators’ future solutions, including broadband-based
development. Thus, convergent operation, wireless access, IP-based core networks, and
charging and billing, and services based SDP reconstruction, are all time-consuming.
on multiple networks have become an The evolution of convergent billing is no
inevitable developmental trend. exception, and requires a unified planning
Internal TCO reduction: To radically mechanism that can be implemented stage
reduce OPEX and to maximize the return by stage and based on local conditions.
on investment (ROI), operators must If existing prepaid systems fail to
move away from the network-specific and respond to new requirements and become
traditional dedicated charging and billing developmental bottlenecks, the best way is
raises QoE of users, but also greatly enhances system model. They need to construct a to begin from existing IN reconstruction,
network utilization. horizontal operation set that maximizes followed by introduction of online
Recently, China Telecom rolled out its platform sharing and unified operations charging system (OCS), and then
Digital Campus offering for college students to reduce TCO. According to Mr. Andrew gradually cover the postpaid area. If the
in Zhejiang province, China. Extremely Macleod, Vodafone senior management, traditional postpaid billing system proves
popular among students, the service offers “The convergent billing solution will really to be inadequate or becomes obsolete,
a unified telecom account under which bring down huge amount of operating cost the existing billing system can shift to a
students can choose a service package that can in the long run comparing with energy- new OCS, which can then be combined
provide fixed broadband, wireless broadband oriented cost-saving solutions.” with the prepaid service. For networks
on campus, IP calls, and SMS over Internet. External user focus: Existing network- with a weak data/broadband ser vice
The charging mechanism is extremely centric and service-centric operation models charging capability, it’s better to exploit
flexible, which includes different services will transit to a new model of customer- broadband network construction to deploy
with free trials, fortnightly, monthly, and centric. The major problems with the an additional local new online charging
semester packages. Real-time account traditional BSS system are its vertical system dedicated to all non-voice services.
information can be accessed online, and architecture and the separation of user and This will reduce the impact on current
students can conveniently pay for their product data based on different networks, mainstream voice services, and converge
chosen service package via top-up cards, services, and payment methods. This mainstream voice service charging when
online bank transfers, or even college complicates both obtaining unified user the local system matures.
canteen cards. information and also realizing the unified In the long run, BSS system transition
Within only two weeks of its debut, management of cross-product services. is inevitable and a vital part of operators’
the service attracted over 80,000 users During the dominance of voice services this strategic transformation. Its potential
across the 40 colleges that have applied for was not an issue, but it is rapidly becoming should be constantly explored during
a subscription. Underpinning the success one with increased service types and new operations, and its internal operation
of Digital Campus is the most advanced complexity. Convergent billing solution can m o d e l s s h o u l d b e c o r re s p o n d i n g l y
convergent online charging system in the meaningfully focus on users, get unified optimized and improved in actual practice.
whole industry. data anytime, and provide multi-directional The long-term planning and advance
We can find that the flexible online products and services quickly. deployment of new generation convergent
charging capability is integral to realizing It is inevitable that the collapse of the billing solution will guide operators to
customer experience innovation and then traditional, vertical, and isolated charging success in a rapidly changing market and
rapid TTM; it provides the most powerful and billing architecture will be mirrored communications arena.
weapon to achieve differentiated marketing. by the rise of the convergent billing and Editor: Xu Peng [email protected]

JAN 2009 . ISSUE 46 22

 The inception of portal websites, the explosive popularity of instant
massaging, and flourishing of Internet search engines like Google and
Baidu, as well as the now common use of commercial C2C business
operations, pioneered by eBay and taobao.com... The advance of a
new idea has always created a significant impact on the world at large
and may bring the bearer of that novel idea his or her first pot of gold.
Opportunities usually lay hidden in the shadows somewhere, unnoticed,
waiting to be discovered, which means that we should keep a sharper eye
out for new business opportunities.
Strategy • New opportunities

23
28 The new social networking arena
31 Growing big in niche markets
34 Business model innovations in cloud computing
36 Do Rei Me – An exploration of CRBT operations

The global financial crisis

and telecom operations
By Liu Nanjie

Far-reaching effects of the On a global scale, investment and economic

development are proportional to the GDP as a
world financial crisis whole. It is predicted that in the next two to three
years, the GDP of many countries will see negative

C
onsulting firms estimate that total losses growth or a slowdown. The impact on information
directly related to the current financial spending varies with the commercial environment,
turmoil are in the range of 15-20 trillion affecting about 5% of the real economies, which is
USD, or the equivalent to a drop of 1/3 quite significant.
in the GDP of the world’s major economies (such as History shows that the shortest lifecycle of a crisis
the G-20). The worst part is that it will take at least a is at least two years. What’s more, this crisis is so big
year for the domino effect to play itself out. that the foundation of the global economy shook
Real estate prices can continue to fall in the U.S., and the tremors have no where near subsided and
China and other parts of the world. Economic will reach places far and wide.
indicators look grim for the U.S. and Europe, and As a traditional sector, the telecom industry is
the Japanese economy also has trepidation. As intertwined with other industries and being in a
investment slows down, so does disposable income, transformational period, it is difficult to escape
while living costs rise with inflation, home values the crisis. Once the telecom industry gets into a
decrease and credit tightens up. recessionary cycle there will be stronger impetus
For the past twenty years, the development of for market share and more needed capital. It can be
science and technology and wealth creation has been predicted that 2009-2010 will mark a very difficult
following the Dow Jones Industrial Average. Most and crucial period for the entire industry.
fast-growing companies (especially IT and telecom
companies) are fed by capital infusion and need a
healthy global economy. With the current downturn Industry chain feels the pain
of the macro economy, these fast-growing companies
might get stopped in their tracks. The telecom industry follows the typical growth

JAN 2009 . ISSUE 46 24

 Strategy • New opportunities
The global financial crisis and telecom operations

model of investment and consumption. The U.S. has been excessively developed, and the saturation of
dollar-based economy has a direct effect on more than remaining markets has reached critical mass. Bubbles
60% of investment and financing in this sector. Europe have also emerged in the traditional operations market.
and other developed markets have been hit hard by Inflation rates are notably higher in emerging markets
the U.S. subprime lending crisis and are stuck paying than in developed countries, and inflation may get out
the bill for defaulted mortgages and loans. These losses of control in some emerging markets. In some regions,
will gradually be seen in the diminished expansion and due to slowdown of GDP growth, telecom operators
growth cycle of some markets in the next few years. will have weakened investment ability and willingness
Some operators are involved in subprime lending, to do so. Only the strong will survive if there is a
exotic banking instruments, high investments and big negative growth rate of -5%.
risk taking. They raise the prices of their own stocks, Telecom investments largely consist of financial
apply for bank loans, and then push their stock prices capital or sovereign wealth funds, with an emphasis
even higher to raise more money by leverage. Market placed on long-term returns. If the markets are stagnant
demand is artificially exaggerated and amplified which and the economic downturn is chronic, investors
can cover potential problems. Cut-throat competition, cannot see expected returns and they will slow down
new licenses, small size, high PE, and financing or stop investing, particularly during transformation in
difficulty can easily pop the growth bubble, especially the early stages of telecom development when balance
during the current crisis. sheets are still in the red.
In many countries, traditional telecom infrastructure The financial storm will expose the contradiction
in the transformation of the traditional telecom
industry, and the contradiction between the saturation
of per capita access demand and per capita bandwidth
demand. It will correct the course of bad investing
as in the past, bringing more attention to per capita
bandwidth, and cause some market bubbles to burst.
Correct choices will be more crucial with no room for
excessive and inefficient investments.
The growth of market demand will slow and
customers will reduce procurement, leading to
a dramatic decrease in operating income for the
IT and telecom industries. Financial institutions,
large enterprises, and governments are always large
consumers of telecom and IT, spending heavily to
replace equipment and upgrade networks each year.
The financial crisis will make the financial chain tauter
and lead to more complex embedded restrictions.
Since 2008 Q3, more than 90% of enterprises
around the world have experienced negative year-on-
year growth. 43% of enterprises have started to cut
IT spending, and 49% of financial institutions have
started to reduce IT budgets. Almost all enterprises
have started to cut expenditures in 2008 Q4. In
2009, all enterprises will invariably cut their expenses.
Due to various reasons, downsizing has begun in
the information industry and around 10% of the
total workforce have lost their jobs, and this is in an
industry where the number of employees has already
been declining.
As governments tighten up monetary policy and
financing costs increase, over-expanded and fragile
links of the industry chain will run the risk of their
financing drying up. This is especially true for newly
established companies that rely on venture capital
and many of them happen to be the “anchors” of
future supply chains. They will bear the brunt of

25 JAN 2009 . ISSUE 46

 Huawei Communicate

Liu Nanjie: PhD, in Networking and Telecommunication Engineering, winner of the National Youth
Natural Science Fund, and a senior expert in Strategy and Marketing at Huawei Technologies.Dr. Liu has
extensive expertise in such fields as telecom economics (like Bit Economics), business modeling, Internet
service operations, NG-Infocomm, NG service networks, communication fingerprinting (network DNA),
marketing intelligence (MI) & planning, value chain, competition and cooperation.

the trauma. As credit and loans become opportunities for innovative enterprises. In traditional CAPEX will experience a
difficult to obtain and liquidity drops, the this scenario, the digital economy becomes CAGR of -3% - -4%, which forebodes a
traditional telecom industry will see slow a buffer between the virtual economy and turning point for industry transformation.
development. the real economy, and provides a new When revenue from voice services and
Multinational operators must also face impetus for the GDP. traditional CAPEX cannot cover operators’
the risks of exchange rates and inflation, In emerging markets, there is still total cost of ownership (TCO), new
because their revenue is generated in local considerable impetus for the development services and new investment will become
currencies. Due to the impact of the US of mobile services. But the evolution new opportunities and breakthrough
dollar economy, most countries have from the per capita access model to the points.
experienced inflation (depreciation of per capita bandwidth model will take Since the financial storm began,
currencies). As a result, most multinational place ahead of schedule because per capita Mergers & Acquisitions (M&A) have
operators’ revenue started to decrease access is essentially saturated all over the decreased with a corresponding drop in the
in 2008, and revenue from operating world. The financial crisis will expose price of assets. VC/PE firms have reduced
companies will continue to drop. At over-construction in some developing the capital stock. IPOs are dormant. Stock
the same time, multinational operators’ countries where construction was based on markets are slack. Trading of cash and cash
operational baseline is rising with outperforming the stiff competition. This equivalents is brisk. At this point, although
associated growing costs. Job-cutting and will trigger more rational development M&A takes place between operators, the
other cost reduction measures become an of the telecom industry, and promote outcome is not teaming up to overcome
inevitable choice. the cohesive development of services difficulties as wished. Because cash
At present, light-asset companies and applications, making it essential to shortage plus cash shortage still equals cash
are in a better position than the heavy- adjust the traditional capital expenditure shortage, and the result of weak plus weak
asset ones, because the latter have more (CAPEX) model. is death.
links that require cash, and they have The cost of debt and inflation will M&A has gone from offensive to
to mortgage their high-quality assets dramatically increase an operator’s cost. defensive, from size expansion and
to get sufficient amounts of cash for Financing will become a precondition business diversification to the acquisition
survival. Large quantities of outdated to contract signing for operators both of more “winter clothes” to make it
networks, inventories, accounts receivable, in developed and developing countries. through the cold, bleak times. M&A
redundant staff, old product lines, non- Operators will also adopt light-asset deals concluded after the crisis began are
profitable businesses, and non-liquid fixed operation models, putting greater pressure generally cash transactions and prices are
investments will become big burdens for on equipment vendors to adopt new very low. Almost like a pawn shop where
enterprises with aged assets. models like managed service and capacity the seller can’t redeem the merchandise.
service. The seller gets cash for selling high-quality
Consumers will not give up mobile assets cheap, while the buyer obtains a
Riding out the storm voice or fixed broadband for now. Internet- mortgage or cash equivalent that they can
related applications and solutions like let appreciate and cash, namely a mortgage
In developed countries and regions, as mobile broadband and mobile Internet of a long-term loan. This is the basis
informatization provides notable support devices (MID)/PC-like terminals, will behind the universal depreciation of the
for (in developed applications and a become the new stars. In the terminal entire industry including the reduction of
high penetration rate), broadband and market, the high-end and the low-end market capitalization.
application growth. Despite the impact segments will become the focus; iPhone, In the past few years, telecom
on the real economy, the digital economy GPhone, and simplified black-and-white equipment vendors have posted a decrease
(characterized by low cost and innovation) terminals will become primary choices for in gross profits, which, to a great extent,
will be significantly stimulated and most people. resulted from the migration costs required
developed, creating new growth spaces and At least in the next three years, the by the development of G/U networks. In

JAN 2009 . ISSUE 46 26

 Strategy • New opportunities
The global financial crisis and telecom operations

a sense, it signifies the relative economic saturation in their demand for broadband Internet. During
of markets. Mobile penetration rates are quite high previous crises, some history-making companies
in many countries. Competitors can only increase emerged. Google rose during the end of the IT
overall market capacity by trading in the market or bubble period, and Apple survived and prospered
encouraging new investments. by evolving its product line and promoting Internet
In the next few years, the financial positions of services. To ambitious people, a crisis actually spells a
operators and equipment vendors will not allow this rare opportunity or as Napoleon once said, “I create
phenomenon to go on, and there are no more technical opportunity”.
or business reasons to convince operators to adopt a Governments worldwide have unveiled economic
migration policy to improve competitive conditions. incentives. Implementing governmental investments
CAPEX, including suppor ting infrastr ucture and consumer stimulation policies requires the
investment will notably decrease. assurance of information networks and IT systems.
Only companies with robust business models Consumer spending and retailing are moving away
that provide present and future value for customers from brick and over to click. Among traditional
can survive. At this time, customers need valuable industries excluding pure resource industries, only
services more than ever and most valuable services and digital industries receive little or no impact and still
applications are now Internet applications. Revenue achieve growth.
from Internet-related services will show stronger New information consumption models, mobile
growth and anti-recessionary features during this broadband, and Internet applications will become the
financial crisis. These services include digital media, highlights of growth. New-business handsets (terminals)
digital media entertainment, digital property rights also show a greater value for users. For example,
trading, digital advertising, search, e-commerce, Internet voting and online campaign advertisements
wireless Internet, MID, intelligent Internet devices accounted for nearly half of the total spending during
(IID) and mobile broadband communities. the 2008 U.S. Presidential Election. Telecom has
The industry is experiencing fast, fiery, and certainly entered an age when sales are driven by
profound changes that go beyond our expectations. services and terminal applications.
We are living in the age of Web 2.0, where users are Although the financial crisis is extending from
contributing content and networking socially. Telecom developed markets to emerging markets, operators can
operators should take note and follow the trend to be well positioned to protect themselves by promptly
weather the storm. changing business models and gaining more revenue
During the crisis, operators will need to focus on from information consumption. In China, a 4 trillion
revenue generating units (RGU). Only Internet-related RMB (approx. USD583 billion) government plan
services can yield high revenues at a low cost. Operators can help offset the impact of reduced telecom and IT
will cooperate with more partners in the value chain to spending. China’s industries are still in the preliminary
share costs, and team up with successful dot-coms to stage of informatization and there is still significant
gain revenue and create more data applications to meet space for development and imagination.
new enterprise customer requirements. History reminds us that a number of new-type
enterprises and new business models will emerge after
each crisis. The mobile broadband Internet industry
Opportunity in adversity will shine during this period of innovation. Creating
new businesses and grasping new opportunities are
The financial crisis will expedite the transformation very likely to be the recipe for success.
of the telecom industry, resulting in the quick During the crisis, to address increased operating
transition from the per capita access model to the per costs and outdated networks, operators need to
capita bandwidth model. As a result, the concept of streamline their organizations and cut back on
information consumption and the digital economy investment and spending. Meanwhile, they need to
will be fully validated in the market. Through years cooperate with dot-coms and seek new opportunities
of cultivation, market demand has exceeded growth. to expand business scope, shifting from telecom
Informatization has become essential to the bottom services to information services.
line and to people’s lives. If operators can effectively avert risks and roll out
There is still solid market demand. In particular, a new valuable solutions at the right time to create long-
large number of capital-driven startups hold immense term service value exclusively, they can turn difficult
power for content creation on the Internet where there times into an opportunity.
is no governing body. They are creating fresh demand
all the time and there is no substantial decrease Editor: Xu Peng [email protected]

27 JAN 2009 . ISSUE 46

 Huawei Communicate

The new social

networking arena
Social network software (SNS) has emerged as a popular and increasingly mainstream area that operators have extensively
researched and are beginning to enter. In China, there are over 100 million QQ zone users, and in the U.S. 80% of
university students use Facebook. Unsurprisingly, operators are keen to show off their advantages in this burgeoning field.

By Hu Lixin

China’s big three set foot sought to exploit network resources, given after the launch of an open platform, for
that operators boast huge network and example, Facebook had attracted more
in the arena telecom service resources. However, these than 4,500 third-party applications. A
resources are open to application providers;

I
social networking website can not only
n September 2008, China Mobile SMS, for example, stimulates cooperation deliver this type of success for a given
launched its own online SNS, the b e t we e n a p p l i c a t i o n p rov i d e r s a n d operator, but also deepen and broaden
139 Community. Immediately operators through ISPs. The gap between its range of services and applications.
after China’s National Day, a new network resources and applications means Operators can thus occupy a strategic
link www.u-powerbook.com was found in that the former has a limited impact on the position from which to effectively develop
China Unicom’s “U-Power” brand website latter, restricting the advantages operators and leverage the unique value of future
that target teenagers. After four months can obtain from network resources. Internet applications.
of trials in Liaoning Province, it has The second measure involved the
already attracted 200,000 China Unicom value stimulated by capitalizing on their
subscribers. Moreover, China Telecom’s wide user base. Operators partnered with Contending for SNS’s
providers to offer various applications, and
plan to deploy its own SNS platform is
underway following its successful CDMA allow subscribers access to the applications. strengths
network acquisition. However, due to high customer service
costs and marketing constraints in the Social networking is a natural extension
niche markets, this strategy offers operators of telecom services. However, an SNS
Strategic SNS a slim chance of success. cannot be built by simply improving
Pinned down by these disadvantages, existing telecom services, and this has
The enormous number of SNS users operators have been looking for a third led some operators to par tner with
offers huge potential profits for operators measure. To this end, people’s appetite for online social platforms to tap the SNS
if they are able to provide a rich variety social networking may have positioned goldmine. Orange has already signed
of VASs. Nevertheless, it is impossible SNS as a smoother, wider road which they a deal with Facebook, and MySpace is
for them to do so by simply expanding have been searching for. Operators can cooperating with Bebo. However, in these
existing telecom services, which poses a set up an SNS platform easily and, with a collaborations, the Internet SNS provider
challenge for their transformation. guaranteed user base in tow, readily deploy owns the social network, while operators
The last decade has seen the telecom various applications on the SNS platform. offer network access only.
industry explore two measures, yet the Moreover, telecom operators can make use Given this, it is more logical for
terrain of both has been tough. The first of users’ real social networks. Four months operators to develop their own SNS.

JAN 2009 . ISSUE 46 28

 Strategy • New opportunities
The new social networking arena

User resources friends. As the Internet becomes prevalent

in people’s lives, operators can expect an
The technological role
In addition to profile space and shared organic and steady growth in business, and
applications, the SNS offers a core feature A social networking website is not only
integrate a variety of services with the SNS
named friends’ list. This gives operators a popular online application, but also an
to attract users. These can include Web bill
a natural advantage; in a recent review application platform for which robust
queries, familiarity number services (FNS),
with Communications Weekly, 3G.cn’s technologies are not only relevant, but a
call filtering, caller name presentation
President, Zhang Xiangdong, stated that precursor for success. To date, extensive
(CNAP), SMS signatures, and CRBT.
SNS websites need real user information, research has been conducted on social
For example, a Web bill query can be
and this can easily be found in the user networking website platforms, among which
integrated into SNS to allow a user to see
resources that operators have accumulated Facebook and OpenSocial are the most
the names of friends matched with their
over many years. influential. Oriented mainly to ordinary
telephone numbers. This type of feature
People have far more contacts in Internet SPs, however, the two platforms
helps personalize user experience and
their mobile phone directory than on cannot fully satisfy operators’ requirements.
enhance customer loyalty.
their social network page. When a user To bridge this gap, Huawei has developed
Integrated services have added distinctive
logs on to an operator’s SNS website, several technologies to help operators
value to SNS. By personalizing content
the operator can utilize the user’s Call construct their social networking websites.
and services, telecom operators can rapidly
Record to recommend friends that the expand their subscriber base. At present,
user can then confirm and add. So the Simple and open interface for
existing social networking websites attract
SNS uses the user’s social network to users by special service provisions such as
applications
promote new telecom service applications. dating, making friends, job search, and A core function of the SNS is to
Friends’ recommendations are invariably business-specific information. Most users, attract mass Internet applications through
e f f e c t i v e , a n d t h e S N S c a n g re a t l y however, have little interest in these services. simple and open interfaces. Online SNS
reduce recommendation costs. Through During the early stages of operating demands that applications must be aligned
acquisitions, Comcast in the U.S. and a social networking website, operators to the SNS’s platform architecture. For
Vodafone U.K. are providing users with a can promote their SNSs through a self- example, Facebook applications must be
shared directory service. service websites. In the near future, social composed in Facebook Markup Language
networking websites can develop and (FBML), and OpenSocial applications
Service resources
be enriched by user generated content must run on a Gadget container. In this
When deploying their own SNS, (UGC); users attract others, which will case, application architecture has to be
operators need to base their services on increase user numbers without the need significantly modified, which will result
enriching communication between real-life for expensive marketing campaigns. in poor usability. Technically, application

29 JAN 2009 . ISSUE 46

 Huawei Communicate

providers do not need to modify architecture, and can Differentiated user security control
simply introduce the platform SNS function through
‘injection programming’. As most applications require Existing online social networking platforms are an
only a simple SNS function that enables each user entertainment platform and lack sufficient security.
to recommend or comment on content or view Applications installed on Facebook and OpenSocial
records of friend visits, the hyper-link and HTML can read all of a user’s information, including friends,
component can be embedded. For complex functions which may later be acquired by the application
such as implementing authority control via SNS providers. The operator’s SNS caters for real-life
friend information, a small number of codes can be friends and thus requires differentiated authority
inserted to activate the Interface exposed by the SNS control.
platform. Applications are minimally modified, and
programming is relatively simple.
Interconnection and interoperability
This technology enables mutual communications
Powerful relationship management among all SNS communities so they can make
friends with each other. Online social websites
Relationships in the SNS refer to inter-user currently operate on a global scale and each
connections, between friends’ lists and groups. community network accepts registrations from all
Relationship management is a core SNS function and over the world. Therefore, these websites need not be
is vital for QoS and user QoE. Existing online SNS interconnected and interoperable.
platforms fail to offer strong relationship management, However, operators managing their networks
which weakens their functions. For instance, the in specific regions must support interconnection
group function of both Facebook and OpenSocial has and interoperability in order to enable cross-
not been upgraded to platform capability, and users regional communications and collaborations for
remain unable to conveniently link users in the same their subscribers. The SNS solution provides such
group. The SNS has to constantly strengthen this core interconnection and interoperability abilities to
to connect users with more friends via a high address help operators enhance user QoE and improve
integration mechanism that protects user privacy, competitiveness.
avoids unwelcome disturbance, and quickly develops So far there have been some mature basic
the user’s SNS function. While deploying the SNS, standards that suppor t interconnection and
operators must enhance relationship management interoperability, e.g., the security assertion markup
while fully utilizing the social relationships between language (SAML).
existing users. Editor: Chen Yuhong [email protected]

A social networking website can not only

deliver this type of success for a given
operator, but also deepen and broaden its
range of services and applications. Operators
can thus occupy a strategic position from
which to effectively develop and leverage the
unique value of future Internet applications.

JAN 2009 . ISSUE 46 30

 Strategy • New opportunities
Growing big in niche markets

Growing big in niche markets

The French word niche means a recess in a wall, especially one for holding a statue or icon. A niche,
though small can hold rich treasures. All markets begin in small niches, as mighty forests start with one
tiny fertile seed. The trick is to find and propagate niche markets in a timely manner.
By Wang Keyan

31 JAN 2009 . ISSUE 46

 Huawei Communicate

I
n the 1970s, Apple and Microsoft planted two nothing. An enterprise can discover or create a new
seeds in the personal computer (PC) niche in market and win the market based on its sufficient
IBM’s backyard. The first Apple computer was resources. Not all niche markets are among the big
invented in a garage by high school students circles. Undoubtedly, the best way for an enterprise
and Microsoft was started by a university drop out to be successful is to satisfy the potential or hidden
named Bill Gates. Ten years passed and the two desires of consumers and create a new market.
small seeds grew into giant trees. The previously The third method is to take over the market from
underestimated PC market niche blossomed into competitors. In an emerging market, an enterprise
a boundless, verdant landscape, growing with each can win a good market position with comparative
new technical development and increasing user advantages even when competitors are stronger. The
requirements. key is to find a competitor’s weakness and exploit
Flash forward ten more years and, Bill Gates was the niche. A weakness here refers to the difference
still quite pleased with his operating system and huge between the competitor’s performance and the
market share. Then two young men from Stanford highest satisfaction level of the consumer.
University focused on the Internet search engine When the competitor tries to satisfy consumers
niche and innovatively planted a strong seed they and they are not satisfied, it becomes a market
called Google. opportunity. The enterprise can then target the
When Bill saw Google, he was amazed that such a competitor’s market if it is capable of providing better
giant tree grew in his own backyard from such a tiny services or products. Michael E. Porter, a leading
seedling. The Internet search engine market, which authority on competitive strategy and international
was once neglected as an unprofitable niche, became competitiveness, said that the best battlefield for
a big moneymaker with Google’s new technology. competition is the markets in which competitors are
The French word niche means a recess in a wall, not ready or are still weak in competition.
especially one for holding a statue or icon. A niche,
though small can hold rich treasures. Create distinctive products
All markets begin in small niches, as mighty
forests start with one tiny fertile seed. The trick is Many characteristics can bring distinctive values
to find and propagate niche markets in a timely to products including special style, service, technical
manner. support and quality guarantees. Philip Kotler, a
pioneer in modern marketing said, “Marketing is
not the art of finding clever ways to dispose of what
Four steps in niche market you make. It is the art of creating genuine customer
exploration value.”
By carefully studying consumer requirements and
Identify exclusive customer groups behaviors, understanding their concerns and needs,
and by using distinctive business models, enterprises
First, seize every opportunity. “Identifying and can create distinctive products to meet customer
catering to underserved markets” was one of the demands and lead the market.
most important capabilities that the Wharton School
of the University of Pennsylvania valued in selecting Design marketing strategy
the top 25 business people of our times in 2004.
Discovering niches brings both challenges and When developing an enterprise strategy, niche
opportunities. Akio Morita, a co-founder of Sony, products and markets should not to be overlooked.
created a “gap theory”. His theory is that among the If product is not outstanding or well-known, an
numerous big circles (markets of big companies) and important strategy is to design some distinctive
small circles (markets of small companies), there are marketing policies, including selecting and creating
still some niches, or undiscovered markets. Due to non-conventional channels and tailored marketing
their narrow scope of business and small capacity, policies for target customer base.
niche markets are often neglected by big enterprises. Strategically, the first thing to do is occupy niche
However, they offer good opportunities for medium channels. Peter F. Drucker, the management guru,
and small enterprises to expand their market once pointed out that, changes in distribution
shares and profitability. Once opportunities are channels might be insignificant for the GNP and
seized, enterprises can gain specific and significant macro economy of a country; however, it is of vital
advantages over the competition. importance for an enterprise or industry. All people
The second method is to create something out of noticed the constant development of technologies as

JAN 2009 . ISSUE 46 32

 Strategy • New opportunities
Growing big in niche markets

well as the market changes in terms of globalization, to the survey, each college student spent about
labor force and population structure, but nobody USD1300 each year. This was calculated by
noticed the changes in distribution channels. spending on laptops, mobile phones, living costs and
An effective channel strategy sometimes might be consumables like clothing and cosmetics and did not
the only competition strength and advantage of an cover tuition fees. When added up the spending of
enterprise. In rare cases, niche channels have been Chinese college students, it represents a new market
taken as part of enterprise strategy. with huge potential.
The second step is to select niche-market College students are a group that likes to try new
oriented promotion policies. things. Pitches for new energy
Non-conventional promotion Small firms are constantly drinks, MP3s, digital cameras
policies can win better recognition and scanners are particularly well
and understanding from
growing into big received by college students. With
underserved, thin-client markets. corporations. All these good concepts and marketing
To help explore the niche market, efforts, a brand can gradually firm
operators should design advertising
enterprises were once up its reputation and find loyalty
or marketing events for specific seeds in niches. With among college students. The
consumers and create marked determination, a strong mobile education market should
differences to cut competition. continue to hold huge potential
life force and strenuous and remain successful among
Retain existing markets efforts, they became students.
This niche has two options
After winning a relatively stable towering trees looked up available for new marketing. One
niche market, all means should be to by the whole world. is to explore a bigger space for the
used to keep it. Three steps can be niche with all your resources and
taken to solidify market position. then transplant the product as a
Retain and strengthen differentiated advantages: fully grown “tree”. The second option is to plant a
The niche strategy is a differentiation strategy. To seed in the niche and nurture it with sunshine and
remain competitive, it is critical to make products nutrition, so that the seed can break through the
that can not be easily replicated or are more niche space and grow into a big tree.
expensive to copy by competitors. China Mobile Jiangsu selected the second
Guard the niche market with innovation: For each option. Believing in the life force of the market
enterprise exploring the niche market, innovation is when sufficient nurturing is available, this operator
their anchor. is determinedly deploying mobile education and
Diversify development: After getting a foothold leading the market.
in a niche market, an enterprise needs to find a By cooperating with renowned English
way to cultivate it further. Many enterprises choose educational institutes in China, China Mobile
diversification in business development, and Jiangsu launched the “English World” service, which
diversities should be new niches as well. enables users to learn English through pictures,
words, and audio and video materials transferred
as multimedia short messages. The service makes
China mobile’s case study: learning fun and users are quickly improving their
mobile education English.
“English World” has some distinctive features.
Mobile education is one niche market. When First, users can use the service on demand and at any
mobile communications are accessed on any campus time or place. Second, users are offered multimedia
or by those wanting to gain more knowledge, experiences. They can practice listening, speaking,
there suddenly is a wide range of potential areas to reading and writing and effectively improve their
capitalize on. English. Third, users can review what they have
In 2007, more than 5.6 million students were learned at any time. Fourth, the service is very simple
enrolled in Chinese universities, and the total number and users are offered highly practical content.
of college students in China is over 20 million. This is “English World” is but the tip of the iceberg
one fourth of the population in Germany or one third in the mobile education market. Once the mobile
of the population in the U.K. . education idea is widely accepted, new markets will
A survey was conducted in 2004 at universities open up limited only by lack of imagination.
in 10 large and medium cities in China. According Editor: Xue Hua [email protected]

33 JAN 2009 . ISSUE 46

 Huawei Communicate

Business model innovations

in cloud computing
By Zhu Bo & Cheng Rentian

T
he high costs incurred in
multiple supplier/buyer
transactions forms the basis
for the introduction of a high-
value agent service, the existence of which
Adrian J. Slywotzky and David J. Morrison
categorize as a new business model in The
Profit Zone. This type of agent-based model
can lower costs for both buyers and sellers,
including monetary, mental, and physical
expenditure. It is also a model that pervades
daily life; traditional retailers, banks, stores,
and real estate agents not only operate
under this new model, but many of the big
names in e-commerce are also its successful
proponents, including Amazon, eBay, and
Alibaba. Unsurprisingly, the model has
begun to edge its way into the telecom field.
This new business model can be
categorized as HaaS, SaaS, and cloud
computing.

not the only pioneer of the HaaS business provides computing capability in the
HaaS model, as Amazon’s Kindle Store also same way that utilities’ companies provide
allows users to download digital content, electricity, water, and gas. For example, if a
Apple is now one of the world’s most such as E-books, newspapers, magazines, family buys an air conditioner, they do not
well-known companies, and its iPod, and blogs. need to consider the power station from
iPhone, and Apple TV have become Amazon Web Services (AWS) leases which it draws electricity, but simply turn
household names. An important catalyst IT facilities that enable other companies it on. Equally, a cloud computing service
driving Apple’s success is the connection to rent rather than purchase ser vers user does not think about whether or not
of its products with Apple’s vir tual or data centers. Other IT hardware the infrastructure provider will need to
supermarket, the iTunes store, without companies also lease IT facilities online, increase expense.
which the company’s products could including EMC, IBM, HP, and Dell. The
not thrive. The iTunes store sells both HaaS business model that provides IT
Apple hardware and digital content such facilities is broadly referred to as cloud SaaS
as music, films, videos, podcasts, and computing, though at present this term
applications. This retail model takes on lacks definitive parameters. In terms of In addition to HaaS, the Software
a service format, which is referred to as its service features, cloud computing as a Service (SaaS) business model also
Hardware as a Service (HaaS). Apple is embodies an infrastructure service that f a l l s u n d e r c l o u d c o m p u t i n g . Sa a S

JAN 2009 . ISSUE 46 34

 Strategy • New opportunities
Business model innovations in cloud computing

provides software services through the infrastructure investment, including in first emerged in IT, they are also influencing
Internet under which a vendor deploys applications and hardware. CT. Being an open system, IT has been
application software on servers. Users The core of the HaaS business model developing quickly and gradually merging
can rent the application software service is “hardware+software”. Hardware is with CT, though ICT is not yet a mature
they need online, and pay according to the service carrier, while software forms field. Nevertheless, telecom operators’
service quantity, type, and duration. The the specific service. For example, a GPS traditional walled garden is being breached
SP, not the user, undertakes complete device is the carrier, while the GPS by uninvited guests who are bringing with
software maintenance and management. software provides the location service. them services unrelated to telecom, rather
Online applications incorporate software The core of SaaS is “software+Internet”. than traditional VAS. They use wireless
operations and local data storage functions Traditional software that requires licenses connections given by telecom operators,
that enable the leased software and services is transformed into online software that and gain the most profits from their own
to be used anytime, anywhere. The SaaS provides services through the Internet. VAS. This process is gradually marginalizing
leasing feature negates the need for would- Cloud computing is thus a service for end operators into becoming merely wireless
be users to invest heavily in hardware, users; metaphorically, the hardware and broadband channel providers.
software, maintenance, constant upgrades, software are obscured by a cloud that is Operators, especially those in the
and staff. Far superior to the traditional neither reachable for users, nor is it their mobile field, need to provide these services
methodology, cloud computing currently concern. themselves rather than simply hosting
forms the most profitable business model wireless connections, which necessitates
in terms of network applications. their own SaaS, HaaS and cloud
The understanding of cloud computing The new business model computing platforms. In other words, it is
has been largely derived from Google. and IT & CT time that the telecom industry had its own
After software takes on a service format, Kindle Store and iTunes store.
computing not only becomes omnipresent, In a s p e e c h d e l i v e re d a t t h e 7 t h
but also takes on the structure as utility Influence on IT Chinese Internet Research Conference
service provision. Both individuals and HaaS, SaaS and cloud computing are in September 2008, Lu Xiangdong, Vice
enterprises can access a large range of set to influence various fields in the IT President of China Mobile, stated that the
software services online, and only pay for industry. next-generation mobile Internet terminals
what they use when they use it. Firstly, PC-centric computing will were the key to future networks. The
To date, Salesforce, Google, and become Internet-centric and the Internet launch of the iPhone and the prosperity of
Microsoft provide SaaS. will be available not only on PCs, but the mobile software market in China have
on mobile terminals such as phones and positioned the “terminal+service” model as
a new, ultra-strong link in the value chain.
The HaaS, SaaS and intelligent terminals. Secondly, PC-based
applications and software will be replaced According to Lu Xiaodong, “In industrial
cloud computing inter- by Internet-based SaaS that too is available integration, China Mobile is a digital
content integrator, editor, and distributor.
relationship cross-terminal. Thirdly, hardware-and
software-driven business models will evolve The boom of mobile multimedia
into new models driven by HaaS, SaaS, services has encouraged us to become
HaaS and SaaS are not as conceptually and cloud computing. information integrators.” Mr. Lu clearly
complete as cloud computing, though rapid Just as desktop computing is gradually expresses China Mobile’s understanding
Internet popularization has initiated the re p l a c e d by In t e r n e t - c e n t r i c c l o u d of the “terminal+service” model, and the
evolution of both into cloud computing. computing, the IT service will be replaced operator’s objective of becoming a digital
Of the three, SaaS enjoyed the earliest by the cloud service. Existing IT software content publisher. With a large existing
inception in 1999, when Salesforce, the and hardware industries will need to fall customer base and mature marketing
representative company of the SaaS business in line with this trend and adjust their channels, the potential of media services
model, was founded. HaaS, on the other strategies to maintain commercial viability. for operators is enormous.
hand, has been widely recognized since Companies that own cloud computing The launch of the iPhone and Google’s
Amazon released the AWS in 2005. In the centers will operate as virtual supermarkets G1 has illustrated the rapid expansion of
early stages of HaaS and SaaS operations, and provide applications and online IT into CT. As the Internet is becoming
cloud computing is not necessary, as computing capability according to demand. mobile, mobile operators are faced with
a traditional data center can form the IT software and services existing outside this both threats and opportunities; the
necessary infrastructures. However, it is platform will gradually become obsolete. former entails being sidelined as a channel
not cost-efficient to expand data centers in provider, the latter encapsulates the wealth
the event of either service expansion or a Influence on CT of profits up for grabs.
large subscriber increase. Cloud computing
can be adopted to significantly decrease While HaaS, SaaS, and cloud computing Editor: Pan Tao [email protected]

35 JAN 2009 . ISSUE 46

 Huawei Communicate

Do Rei Me
An exploration of CRBT operations
The color ring back tone (CRBT) market has enjoyed significant success and brought in substantial
income throughout the world. Is there a secret to success in CRBT operations?

By Bai Li

Charms of CRBT Music is universally loved and almost

all mainstream IT enterprises, telecom
operations.

operators and Internet enterprises in the

S
hortly after it originated in the world have clear strategies for developing Secrets to successful
Asia-Pacific region in 2002, CRBT
service gained huge popularity
digital music and entertainment. CRBT
service has let telecom operators expand
CRBT operations
in a short time and was quickly into entertainment and multimedia.
introduced to other markets. The creator Su c c e s s f u l i n r o a d s m a d e b y A s i a n Setting up a healthy ecological
of the service, SK Telecom has earned operators, including SK Telecom and environment
magnificent profits. China Mobile, a China Mobile, are being replicated by
successful follower, has achieved over other operators worldwide. Operators in In the digital music field, huge user
68% service penetration rate in CRBT Russia, the Middle East and even Africa demand has boosted the formation
applications and raked in more than have reaped the benefits after making and gradual maturity of a digital music
USD1.45 billion from the service in 2007. significant breakthroughs in their CRBT industrial chain, which is comprised of

JAN 2009 . ISSUE 46 36

 Strategy • New opportunities
An exploration of CRBT operations

Internet companies, record companies, industrial value chain. Wireless music bulletin: According
content providers (CPs), operators and to the quantity of CRBT downloads,
mobile phone vendors. Many players Content-based operations an operator can establish a music chart
in the value chain have accumulated The quick development of the CRBT based on the real consumption data, to
rich experience in content, innovation, service can be attributed to it being provide users with wireless music services.
channels and marketing. a means of expressing different users’ This helps an operator build a complete
Similarly, CRBT service is also in need personalities and tastes. Users have industrial value chain and form a unified
of a complete industrial chain, which diversified requirements; new hits emerge wireless music marketing platform.
is expected to drive the market towards and there are constantly new requirements Wireless music club: By integrating the
even more prosperity and sustainable t o f u l f i l l . To r e m a i n c o m p e t i t i v e , music value chain, operators can provide
development. Operators should integrate operators have to continuously create new users with one-stop music consumption
resources in the value chain with an open, content to enhance user experiences and and entertainment services, including
cooperative attitude. Content and service this is driving CRBT service in better music forums, star concerts and discounts
providers are important components for development direction. from associated stores. Each operator
operators. In the upcoming years, value in the can run a wireless music club as a bridge
When looking at the development of digital music field will be generated from of contact. With rich and interesting
successful CRBT service operators, we “content-based operations”. The CRBT products, the operator can cultivate highly
can see that when they first deployed the service should provide users with a brand- active, loyal users while introducing a lot
service, effective business models were new content platform, offering one-stop of users with strong musical requirements
established to attract and encourage CPs music consumption and entertainment and high consumption to CD companies,
and SPs to jointly participate in marketing. services, including music downloads, CPs and SPs for added revenue streams.
Based on strengths in content and sharing, promotion and communications. In addition to content-based
channels, partners’ deep understanding of At present, widely-used CRBT content operations, operators should further
local markets, service innovation capability package forms include: optimize the CRBT subscribe modes.
and rich marketing experience, operators Music box: Each music box normally At present, CRBT access modes include
quickly attracted a large number of users comprises 3-6 CRBT songs, and the price the wireless application protocol (WAP),
to overcome operational difficulties in is lower than the sum of all songs in the web, interactive voice response (IVR),
the early phase. User numbers have been box. The CRBT music box can be used short message service (SMS), unstructured
growing constantly and revenues have in various marketing activities. It can be supplementary service data (USSD), and
been increasing. As a result, operators used with the launch of new CDs, in club customization by the customer service
have been continuously making service and membership activities, and in Internet center. With the development of services,
innovations, expanding promotion marketing. It remains quite popular operators need to optimize existing service
channels and exercising firm control on the among users. processes and add more functions like
CRBT duplication and CRBT search.
Operators should also enable
the built-in SIM Application
Toolkit (STK), so that users can
conveniently order and use the
service.

Flexible charging
policies
Most operators
require that users pay
monthly rental, content
download and browsing
fees to use the CRBT
service. In developing the
C R BT s e r v i c e , o p e r a t o r s
normally adopt the tariff model
of “monthly rental + content
d o w n l o a d f e e” t o e n s u r e
stable income. In different
development phases,

37 JAN 2009 . ISSUE 46

 Huawei Communicate

operators should adopt different tariff popularity, improve product influence, and and benefits to users.
models and pricing polices to attract users. increase service stickiness. In product and function design, the
In the CRBT impor t period, the growth phase focus is on improving
operator can offer a free trial period of 1-3 the users’ stickiness in using the CRBT
months to lower the entry threshold of Operational policies for service and decreasing the churn rate. For
users. This promotion allows the operator different phases example, each operator may design a lot of
to quickly deploy the service, cover users, annual fee or half-year fee products to cut
increase popularity of the service and get a The CRBT service development cycle down on users opting out. The operator
lot of users onboard in a short time while can be divided into four phases: launch can also design monthly fee products to
increasing the penetration rate. preparation, import, growth and mature. lower the costs of changing CRBTs and
After the penetration rate has reached increase user interest in using the CRBT
a certain point (generally about 10% Launch preparation phase service. Users can be invited to make
penetration), the operator may concern CRBTs. They can place DIY CRBTs in
more about the loyalty and activity Tasks in the launch preparation phase their CRBT databases or sell their DIY
of users, rather than the numbers. In include market research, user experience ringing tones, so that the users not only
this phase, the operator can set up a design, tariff policy making, brand have fun making personalized CRBTs, stay
membership program to increase user name orientation, user recognition and loyal and maybe even profit a bit.
loyalty. At the mature period of the media promotion planning. The phase In the growth phase, the operator
CRBT service, when the penetration rate mainly paves the way for future service should simplify the CRBT operation
increases slowly, the operator can stimulate development. model and process to improve user
consumption and improve the average experience. For example, when a user dials
revenue per user (ARPU) of the product in Import phase a number and hears a good CRBT, he can
the installment-by-month mode. duplicate the CRBT on his mobile phone
Being a receiver-paid, caller-perceptive
by just pressing a key. Upon hearing a
service, the CRBT service can be viral.
All-dimensional marketing After one user orders the service, other
favorite song, the user can also send the
song name or performer to the CRBT
users can have the experience when they
The marketing of the CRBT service platform through the CRBT search
call in. The promotion can be tremendous.
is a cross-industrial, multi-channel and function on his mobile phone, make fuzzy
In the CRBT service import phase, the
experience-oriented process. Each operator searches or order the CRBT.
operator’s major task is to find seed users,
can form an all-dimensional online, offline In terms of marketing promotions, all-
who can kick off the viral marketing
marketing network comprised of existing dimensional, integrated marketing should
among other users.
channels, record companies, CPs and SPs, be executed in the growth phase, including
During this phase, the CRBT service
other media and websites. event or holiday marketing, media ads,
should be oriented as a fashionable,
By using the online precise marketing CD fliers, and recommendations through
personalized service targeting people under
mode, the operator can analyze the customer service centers. Marketing
25 years old. The major marketing mode
consumption behavior of users and channels should be expanded to more
is experience marketing. The operator can
conduct oriented, precise marketing, locations including cinemas, Karaoke
offer free trial service in order to attract
including personalized, similar and rooms and video rental shops.
a big number of users in a short time.
new product recommendations.
Product design for this phase might not
Recommendations can be made through
fully satisfy user experience. User surveys Mature phase
the SMS Push, WAP Push, and manual
should be conducted, and access portals
call-out. The operator can also make In the mature phase, the CRBT user
should be optimized. The operator should
recommendations and marketing through penetration rate can reach over 50%,
strengthen marketing in various forms in
the CRBT portal websites and network which means that the market becomes
order to enhance product recognition.
associations. gradually saturated. Users get into the
An operator can also make offline Growth phase habit of changing ringing tones and expect
channel promotions. In addition to in- to make more friends through music. In
house promotions, the operator can The service growth phase features low this phase, the operator should conduct
promote the CRBT ser vice through user loyalty, frequent changes of users in precise targeted marketing. New services,
traditional media, such as TV, radio, big numbers, poor user experience, major such as the music community and CRBT
newspapers and magazines, and outdoor difficulties in using the CRBT functions, advertising, can be introduced to integrate
advertising. The operator can also and low frequency of changing songs. The the CRBT with digital music while
cooperate with mobile phone stores and prime objective of this phase is to expand keeping an eye on developing towards full-
record stores in marketing. Periodical the user group and adjust the CRBT blown digital entertainment.
meet-the-star events can be held to gather orientation to present the service values Editor: Li Xuefeng [email protected]

JAN 2009 . ISSUE 46 38

 A business mode itself does not automatically guarantee operators’ instant
success. CRBT notched out a place for itself in China, but will it succeed
elsewhere? Could IPCC or the sunshine industry as it is commonly referred
to, thrive elsewhere in Asia? It appears that proper operation is the key to
success in all the above mentioned entities. So, how can one operate so as to
make a profit, while at the same time satisfying customers’ needs?
Operation • Successful modes

V WAY

39
40 Adding value with the multimedia call center
42 IPCC: From Asia-Pacific to the world
45 Unified enterprise communications solution

Adding value with the

multimedia call center
Competition in the telecom market describes a heated battle for customers. Operators are forced
to constantly expand their service channels and improve service quality to fully meet customers’
varied, increasingly demanding, and individualized service needs. In response to this, the
multimedia call center has emerged, bringing customers a fresh, value-added service experience.

By Yan Xinyu

A
call center is a CTI-based system that accordingly. Access media is shifting from voice-only
incorporates a range of communications to multimedia; previously isolated contact channels are
network and Internet functions. working in partnership; and service applications are
Connected to an enterprise’s background transiting from a single service to converged, multi-
service system, it provides a full range of high-quality services.
and efficient services for customers. Early in 1990s, Huawei entered the call center field in 1993, and
call centers were being deployed on a massive scale has since acquired 15 years’ experience and expertise
across a range of sectors. developing the cutting-edge technology that can now
As an evolving information service model, the value be applied to call centers. The culmination is a total
of call centers is increasingly appreciated by operators as multimedia call center solution that supports front-end
a means of securing a competitive edge. In just a decade, access through various media, achieves seamless inter-
they have evolved from a single-source hotline into a media coordination, and provides a range of convergent
comprehensive multi-channel customer contact and back-end service capabilities. These new technologies,
service-rich call center that can be accessed by phone, features, and applications are set to revolutionize user
IVR, e-mail, WAP, SMS, and the web to deliver a range experiences. Let’s illustrate the possibilities through our
of services. three users: Amir, Maria, and Scott.
Given the dynamism of customer demands and the
increasing maturity and application of voice, data, video
and Internet technologies, their structure is evolving Multimedia access

JAN 2009 . ISSUE 46 40

 Operation • Successful modes
Adding value with the multimedia call center

We’ll begin with Amir’s experience. Amir IM. Multimedia access enables customer layer according to CRM. Thus, a unified
first calls his operator’s customer service representatives to serve a number of service request model is formed to meet the
hotline–the multimedia call center–to customers simultaneously through different requirements of multiple service processes.
query a recent telephone bill. A soothing access media (such as SMS, IM), thus greatly The call center identifies services, and
voice welcomes him to the Interactive Voice improving productivity. Customers in turn transfers them across and through numerous
Response (IVR) service, and directs him to are free to choose their favorite contact channels and procedures. This guarantees
the IVR menu that has been transmitted to channel and method to communicate with an unbroken, seamless service experience for
his screen. A few simple commands bring up the multimedia call center. customers regardless of the channel they use.
his latest phone bill on screen. Amir selects
Manual Inquiry and watches a promotional
flash video clip from the multimedia call Multi-channel Multi-service
center while he is being connected to a video coordination convergence
call with a customer representative.
In comparison with the above video Let’s move on to Maria. She calls the Finally, let’s find out about Scott’s
communications scenario, a legacy call operator’s service hotline and asks to join experience. He is keen to modify his home
center mostly provides a voice-based inquiry their gifts-for-points offer. The customer broadband service package, activate mobile
method that is supplemented by SMS and representative directs Maria to the nearest Internet access, and inquire about a pre-
email. Media constraints not only limit the sales hall and texts her a service request paid phone offer. So, he calls the operator’s
amount of information that can be sent and number, and simultaneously transfers the service hotline on his home phone. After
received, but lengthy, tedious, and complex service request to the hall. On arrival and verifying his identity by password, the
interactions are required from the user. seeing Maria’s service number, the hall customer representative changes Scott’s home
Following the launch of 3G services, clerk immediately exchanges Maria’s bonus broadband service package to a monthly
real-time media such as video access will points for a stylish new handbag. This is a payment plan for 2Mbps bandwidth. In
become a reality. Due to technological typical experience involving multi-channel addition, the representative activates mobile
advancements, the Huawei multimedia coordination powered by the multimedia call Internet access and provides Scott with fee
call center integrates narrowband and center. details.
broadband access and provides broadband Multi-channel multimedia access The representative then checks the number
media resource capabilities over multiple necessitates interaction and coordination on Scott’s mobile, and sends him multimedia
networks, including PSTN, PLMN, NGN, between different media channels. As such, information relating to the free phone.
WCDMA, CDMA2000, and IMS. Coupled operators need to provide customers with This describes a typical service scenario in
with terminals’ multimedia capability, the a complete service process to help realize which an operator provides customers with
solution strides over the information deficit a unified market strategy under which a converged service that spans channels,
barrier to revolutionize the way users such as customers receive unified services. This is terminals, and services.
Amir obtain information with a range of new achievable by systematically reviewing the With the convergence on mobile/fixed
dimensions. construction and operation of the various network, and Internet/telecom network,
Moreover, the 80’s and 90’s generations channels to ensure their close coordination operators are expected to provide customers
are also influencing the call center service and collaboration. with one-stop converged services. As a
model through their Internet access habits Channel interaction is defined as a process decisive response, the Huawei multimedia
and clear preference for instant messaging in which the multimedia call center serves call center is designed to provide customers
(IM). Combining telecom networks and the customers by utilizing shared cross-channel with converged multi-service marketing
Internet, the Huawei multimedia call center functions. Channel collaboration provides capabilities.
supports Web access methods including text, unified inter-channel service adaptation With unified customer IDs in the CRM
voice, and video to realize real-time value- and provision, and enables customer system, the Huawei multimedia call center
added interactions between customers and representatives to transfer customer data arranges a variety of services for customers
customer representatives. The call center between channels. Channel combinations after one-time ID authentication. It also
also provides VoIP-based capabilities, can be configured according to specific provides the ability to collect customer
including click to dial, callback requests, and requirements and to a customer’s one-time feedback regarding different services by
collaborative browsing. These allow users to service preference in order to ensure inter- making just one call to the customer, avoiding
experience combined text, voice, and video channel QoE consistency. the irritation caused by repeated calls.
services. The Huawei multimedia call center can Huawei will continue in its efforts to
In addition to providing a unified routing collate and extract data streams to facilitate enhance and optimize customer experience
and queuing management mechanism for multi-channel control and coordination. via its multimedia call center by remaining at
media access, the Huawei multimedia call Based on multi-channel, unified contact the forefront of technological advancement
center incorporates non-real-time access information, the solution can divide and and service innovation.
capabilities, including SMS, email, and process service requests at the channel Editor: Xue Hua [email protected]

41 JAN 2009 . ISSUE 46

 Huawei Communicate

From Asia-Pacific to the world

The latest report from Global Industry Analysts, Inc. (GIA), a US-based market research company, stated that revenues
from the global call center (or contact center) market are expected to reach USD195 billion by 2010. The booming call
center business is a force that flattens the world and its impact is dramatic in the Asia Pacific Region.

By Zhou Xu

Growth and great According to CCAP statistics, currently

the call center industry in the Philippines
effort to showcase their technology and
solutions to cash in on the great potential
potential has about 150,000 seats and is growing of this emerging industry. Trade shows and
at an average rate of over 20% per year. exhibitions are the best venues to show

E
Though the scale is smaller than that in their stuff.
xpansion is accelerated in the India and China, the fast growth of the
Asia-Pacific market and the fastest call center industry in the Philippines is Indonesia Call Center Forum
growth is in the Philippines. attracting the most active BPO capital
According to the Asian Contact Ended in May 2008, the Indonesia Call
from international offshore groups like
Center Industry Benchmarking Report Center Forum featured a display of the
Convergys, HSBC, and TeleTech among
2008, the call center industry in Asia is at IP Contact Center (IPCC) from Huawei,
others.
a development stage. In 2007, the number who was a silver-grade sponsor.
Offshore BPO groups established their
of call center seats across Asia increased Thousands of participants attended
outsourced call centers in India early this
by about 15%. The top three countries the forum, including the minister of the
decade. Over the past few years, Bangalore
in terms of seat growth rate are the Indonesian Ministry of Communication
as the center in India saw the most rapid
Philippines (23%), Malaysia (17%), and and Information Technology, Indonesian
development. Today, these very same
Thailand (15%). operators, and delegates from call center
BPO groups have established another base
The local call center industry anticipates application enterprises. At the forum, an
of operations in the Philippines, which
continued growth on the strength of strong emerging Indonesian CDMA network
is expanding with Manila in the center
demand for its services, said Rainerio Borja, service provider Mobile-8 won four awards
position.
the President of the Call Center Association including “The Best Operational” and “The
of the Philippines (CCAP). He is also the Best Manager”.
president of PeopleSupport Philippines, a Call center exhibitions Hu a w e i i s t h e I P C C p a r t n e r f o r
fast-growing call center and business process Mobile-8 and provides advanced solutions
outsourcing (BPO) service provider. Equipment providers are making every and operational assistance. The Huawei

JAN 2009 . ISSUE 46 42

 Operation • Successful modes
IPCC: From Asia-Pacific to the world

I P C C h e l p s Mo b i l e - 8 i n t e g r a t e i t s overall strengths of the Huawei IPCC. Currently, the CCDCI is the only
customer care, charging capabilities, During the forum, Huawei marketing and professional exhibition in India, which
prepaid and postpaid services. technical experts delivered four keynote exclusively gears to call center operators,
Mobile-8’s response time to customer speeches. i n t e g r a t i o n s e r v i c e p r ov i d e r s , a n d
requests is markedly faster, lowering Huawei experts shared their experience equipment suppliers. Top operators,
costs and boosting customer satisfaction. in reducing TCO and ensuring service service providers and equipment suppliers
Thanks to its superior performance in the quality by utilizing outsourced customer like Tata, Reliance and Vodafone were in
IPCC project, Mobile-8 received awards service centers. They highlighted the attendance as were system integration and
in recognition of its excellent call centers. advantages of Huawei IPCC, for example, BPO service providers like Microland,
A Huawei IPCC expert commented, “The providing integrated solutions including Cincom, NovAtel, and ICMI among
value of the Huawei IPCC lies in its ability the platform and business, while reducing others.
to provide all-round assistance beyond the TCO and ensuring service quality Huawei made its debut at the show by
equipment to help operators achieve through an eco-friendly and energy- demonstrating services and experiences in
successful operations. The additional efficient hardware platform, precise and a call center environment. Considering the
assistance includes consulting services and secure service level agreement (SLA), a large seat capacity in the India market and
operational problem solving.” strong knowledge-based system, and a high sensitivity to price by users, Huawei
flexible “call center as a service” business experts delivered highly regarded keynote
CCAP Annual Call Center model. speeches on how to reduce the TCO of
Conference & Expo call centers, including CAPEX and OPEX.
Call Center Demo and Huawei has established the largest
The CCAP Annual Call Center Conference India (CCDCI) overseas R&D center in India, which
Conference & Expo was held July 23-24, employs a staff of over 4,000 local R&D
2008 at the SMX Convention Center in India is one of the world’s largest BPO and technical service personnel. The
the Philippines. centers with call centers taking center combination of India’s unique advantages
Huawei demonstrated live network stage. The CCDCI was held in Bombay and Huawei’s IPCC technical expertise
services and service experiences through September 19-20, 2008 and Huawei was a g e n e r a t e d a s a l e s t u r n ov e r o f ov e r
remote IPCC access and showcased the platinum sponsor. USD14.70 million in India last year.

Huawei’s softswitch-based IPCC adds value

Link
Given the sharp market competition including email, web call and request are also combined for more power to
and the development of NGN and response. It also supports interaction the service system.
3G networks, Huawei has launched modes like web page synchronization In t e r m s o f s y s t e m o p e n n e s s ,
the IPCC solution built on softswitch and form sharing. SoftACD can integrate Huawei provides seamless connectivity
as part of its effort to meet All-IP the Internet with an E-commerce to products from computer telephony
based open, distributed, and evolving platform. SoftACD supports concurrent integration (CTI) providers like
networking requirements and fully queuing and routing of varied media, Genesys as well as all the mainstream
support multimedia (audio, digital, and realizing multimedia collaboration and CRM systems.
video) integration and access. interaction. SoftACD can also readily Huawei also provides graphic
Huawei’s broadband/narrowband integrate with third-party products, enhanced development tools, such
integrated access platform SoftACD such as TTS, ASR, CRM, and billing as development workflow and IVR.
can provide call access, seat-related applications. To date, Huawei has partnered with
capabilities as well as media resources In a service system based on over ten leading service developers to
for call centers. The platform features business practices, the Huawei IPCC develop a rich set of services through its
strong and flexible networking has incorporated a range of functions, platforms geared to the business needs
capabilities to support interconnection including marketing, sales, services, and of various industries.
or interoperation with varied devices internal support. The independent basic C o m b i n e d w i t h f u l l - f e a t u re d
through open and standard interfaces service platform has simplified the on- integrated platforms and service systems,
over various signaling protocols. site development of each new service. Huawei’s IPCC products and solutions
The platform also supports call In addition, the simple working mode, are well-placed to add value and sharpen
processing through various media, active service, and the knowledge center any company’s competitive edge.

43 JAN 2009 . ISSUE 46

 Huawei Communicate

APCCAL Contact Center Expo

2008
Designed by Asia Pacific Contact
Center Association Leaders (APCCAL)
and hosted by CCMWorld Group, the
APCCAL Contact Center Expo 2008 was
held in Beijing, October 15-16, 2008. The
exposition gathered heavyweights in the
call center industry and leaders of famous
call center organizations from over 15
regions and countries. Huawei attended as
a platinum sponsor.
At the forum on Oct. 16th, Wang
Qiang, the director of Huawei IPCC
product, exchanged in-depth views with
other participants with the topic of
balancing customer satisfaction and the
TCO. Based on analysis of the TCO,
Huawei has remarkably improved the core
competitiveness of its products through
one-cabinet integrated solutions, one-
stop total solutions, and one graphic
development suite, striking a balance
between customer satisfaction and the Oracle. In addition, Huawei has partnered system with over 1,000 IP seats for MTN,
TCO. with over ten leading companies to develop the top operator in Africa, helping to
Outstanding performance in the call solutions for some important sectors like improve MTN’s service support capability
center field over the past years won Huawei banking, security, and government. The and market competitiveness.
“China best contact center technology Huawei IPCC can meet the personalized The value-added service system for
provider” award from APCCAL. requirements of various enterprises.” Brazil Oi (formerly Telemar) is also from
According to a report from Frost & Huawei and provides stable value-added
Sullivan in 2007, Huawei topped the service for a massive number of users;
From China to the world Chinese call center market in switch and helping Oi gain steady revenues from
software services. The Huawei IPCC value-added services. In addition, Huawei
With its strong R&D capability, has served users in a wide variety of deployed the large-capacity recharge
Huawei is the market leader in the sectors, including: China Mobile, China service platform for Vodafone Egypt,
domestic Chinese market and is expanding Telecom, China Merchants Bank, China enhancing customer satisfaction and
to overseas markets. Construction Bank, Everbright Securities service experiences for millions of users.
Compared with hardware solutions Company Limited, Ping An Insurance, The latest GIA report showed that the
and integration solutions widely used in TCL, and Tencent. Asia-Pacific call center market has huge
the industry, Huawei’s carrier-class IPCC Huawei was also awarded contracts potential and is expected to give a good
solutions feature large capacity, superior to build the hotline 12366 call centers boost to the global market. The Huawei
space utilization, energy-efficiency, high of the State Administration of Taxation IPCC is poised to enter the markets in
performance and seamless integration. Its offices, Shenzhen Municipal Government, Asia-Pacific, the Middle-East, and South
carrier-class network management and Shanghai Post, and the China Southern Africa.
maintenance capability can fully meet Power Grid. Huawei has remained in the spotlight
user large capacity requirements with low Bolstered by its robust technical and an industr y leader. Founded on
CAPEX and OPEX and effectively reduce expertise, Huawei is expanding to overseas strong marketing capability and technical
the TCO of call centers throughout the markets. In 2008, Huawei created IPCC expertise, Huawei has demonstrated its
lifecycle. teams that specialize in overseas expansion. amazing ability for support operations.
Wang Qiang, the director of Huawei In addition to a strong presence at trade In an industry that is full of constant
IPCC product, said: “The Huawei IPCC shows and professional exhibitions challenges, Huawei is always ready to go
solution provides strong compatibility. It overseas, Huawei has a series of initiatives the extra mile to help customers on the
can be integrated with the products from to tap into overseas markets. smooth and bumpy roads.
industry leaders like Microsoft, SAP, and Huawei deployed the customer service Editor: Wang Hongjun [email protected]

JAN 2009 . ISSUE 46 44

 Operation • Successful modes
Unified enterprise communications solution

Unified enterprise communications solution

The VoIP-based unified communications solution not only meets the needs of cross-regional enterprise communications
but also reshapes the enterprise communications landscape.
By Wang Yufan

The communication headache lists as well as the phone numbers that appear on their
name cards.

H
stands for a large enterprise group
(“Group H”). In keeping with its rapid Huawei’s unified
development in recent years, Group H
has established numerous offices and communications solution
manufacturing bases, both at home and abroad. As
a result, the group has had to face several challenges After learning that Huawei launched a VoIP-
created by growing communications demands. based unified communications solution, Group H
Challenge 1: Escalating communications fees. subsequently contacted Huawei. Within a short
Over the past two years, the group’s communications period of time Huawei devised a unified cross-regional
fees have doubled every six months. communications solution specifically tailored for
Challenge 2: Low communications efficiency. The Group H.
PBX system is deployed at the main headquarters (HQ), Based on cutting-edge architecture, the solution
but the Centrex system is leased from telecom operators not only provides open interfaces but a wide range
located at branch offices. There is no problem when the of services. It is also very robust in terms of its
main HQ and each branch use short numbers locally, maintainability. The solution basically consists of the
but communications between HQ and each branch following parts: a VoIP-based integrated switch SoftCo
that necessitate the need for a long PSTN number, is 9500/5816, a unified message server (SmartCall 1000),
both time and money-consuming. subscriber access equipment IAD, ET series IP phone
Challenge 3: Difficult terminals, a network element management system,
maintenance and inefficient a service management system, a billing management
management. The PBX system system, and etc. In addition, the solution provides
currently in use at HQ is a wide variety of unified communications services.
operating stably. However, the Some of these services include: basic voice features
system has a limited capacity, and supplementary services, video communications,
and is difficult for scaling. One Number Link You (ONLY), number portability,
The Centrex systems used at teleconference, instant messaging (IM) and Presence,
branches usually require little unified messages, an enterprise switchboard (automatic
maintenance. However, operator and operator console), and so on.
whenever employees In this solution, SoftCo 9500, which is a large-
move to another capacity core call control system (VoIP-based
seat, they are not integrated switch), is deployed at Group H’s HQ. The
able to relocate system supports pure IP-based networking. It also
their phone provides robust connectivity to existing PBX devices
numbers and the operator’s network. Depending on capacity
to the new and service demands, SoftCo 5816, which is a small
seat (number VoIP switch, or a VoIP gateway, is deployed at each
portability). branch and communicates with HQ through short
Therefore, they numbers. Such deployment also enables employees to
have no choice make free calls, while at the same time retaining their
but to update external phone numbers and dialing habits. Further,
their address the VoIP switch features a built-in voice conference

45 JAN 2009 . ISSUE 46

 Huawei Communicate

capability, which can support hundreds of personnel or costs from Huawei’s solution. employees to bind a number of extensions or
parties simultaneously. The teleconference Instead, the solution really helps to remove mobile phones with a single phone number.
service supports access through multiple the group’s concern about complex Thus, mobile phones become mobile
modes, thus, making it easier to use and m a i n t e n a n c e . C e n t r a l i ze d n e t w o rk extensions. Any call to each employee’s
manage. management also allows H’s headquarters to unique internal number will cause the
The solution also includes a unified configure and manage all devices and deploy mobile phones and extensions bound with
message server which is located at HQ that services across the network. Moreover, IT the number to ring at the same time, or in
provides voice mailbox and fax mailbox staff at branches will be able to perform a preset sequence. The employee can then
capacities across the network. A recording basic maintenance tasks through the Web use any of these terminals to answer the call.
telephone set and virtual fax machine are NE management system. Most notably, the Moreover, during the call, the employee is
allocated to each employee, which allows solution enables employees to set up and able to switch seamlessly between his mobile
them to send and receive paperless faxes. activate routine services by themselves. For phone and the extension.
In terms of terminal functionality, IADs example, the PCA client software enables
or AGs take over the work previously employees to bind the ONLY feature with Benefit 4: Enhanced
handled by the PBX system or Centrex a mobile number, set call forwarded-to communications security
desktop telephones. Some executives have numbers, reserve a conference call, and set
even had their desktop telephone sets up the alarm clock. The client even supports Some of the new offices are connected
replaced by advanced IP-based voice or inquiries concerning personal call records to the operator’s network through ADSL,
video phones, which allows them to make and call fees. As a result, this has helped to but not to the group’s internal IP network.
calls simply by installing a network cable. In considerably ease the workload of Group H’s In an effort to address the security issue,
addition, Huawei’s desktop software called communications maintenance staff. Huawei proposed using its Session Border
Personal Communications Assistant (PCA) Controller (SBC) solution. This solution
provides a broad range of powerful unified Benefit 2: Sufficient use of existing is ideal for a private network that wants to
communications functions. These functions resources traverse to a public network. This solution
include: a PC-based soft phone (voice and connects both of these offices to the unified
video), desktop phone assistance, instant The PBX previously used at group communications system. The SBC solution
messaging, enterprise address book, data headquarters and the original users, remain transmits signaling and media streams
conference, workflow integration, and etc. active. The PBX currently connects with the through agents. It then reassigns addresses
VoIP integrated switch SoftCo through the and ports for receiving signaling and media
E1 trunk. New users are connected to the streams from internal and external network
Tangible benefits SoftCo, and then to the PSTN, through users. Thus, addresses of different network
an E1 interface. In addition to reducing domains, such as public and private
Group H was very pleased with Huawei’s communications costs, while maintaining networks, can be translated one to the
unified communications solution. Its previous dialing habits, this approach also other.
management team ratified the project and helps to maximally protect all existing Additionally, this provides technical
it was launched soon thereafter. Huawei investments. support for NAT traversal of signaling and
observed the progress of the project for three Moreover, the group’s top executives media streams. One IAD alone in each of
months after the launch date. It was pleased are allowed direct access to the previously these offices is sufficient to deliver IP voice
to find that its solution has helped reshape deployed Huawei video conferencing access. More importantly, independent of
the group’s communications landscape. system, via the IP video telephone set on the existing network topology, this solution
their desk. They can even initiate a video supports various NAT traversal modes.
Benefit 1: Improved efficiency and conference call without having to leave their The solution also provides the ability to
reduced fees office. hide the core network topology, supports
user registration and IP address binding,
All departments and branches of the Benefit 3: Cross-regional mobile protects services and bandwidth against
group were able to successfully reduce the offices theft, and also safeguards against common
high costs for toll calls within a short period network attacks. Moreover, this secures
of time. Highly efficient communications The unified communications system access through public networks such as the
methods such as, use of unified message, supports number portability and mobile Internet, and prevents unauthorized user
ONLY, conference call, video telephony, extension to establish a mobile office across access and attacks against the core system.
and instant messaging, have significantly regions. For example, through simple inputs All of these enhanced security measures
improved internal communications on a terminal, an employee can bind the have greatly helped to reassure Group H
efficiency. Despite the addition of a unified terminal with his phone number and carry on the security and reliability of the unified
communications system, Group H will not the number with him whenever he moves communications system.
however suffer any additional maintenance to another office. The ONLY service allows Editor: Liu Zhonglin [email protected]

JAN 2009 . ISSUE 46 46

 IPTV should not only bring a pleasant experience, but should
also be easy to use. How can one identify multimedia elements
in message promotion? How can mobile advertising providers
identify different customer groups and best ensure that their
ads successfully reach each targeted group? In an era of an
experience-oriented economy, telecom operators must obtain
in-depth information of customers’ demands. They also need to
show greater respect for customers’ experiences in the product
level, in order to pamper more valued customers’ needs, thereby
driving up the profit growth of the enterprise.
Enjoy • Enhanced experience

47
 48 The new IPTV platform
50 Mobile advertisement adds big revenue
54 A new way to promote P2P messaging

The new IPTV platform

IPTV is rapidly developing on a global scale and related service innovation is essential for realizing IPTV’s massive
potential. Currently, operators are analyzing the relationship between service innovation and platform construction, and
the pace at which both should be developed.
By Liu Jinming

Making IPTV competitive over an IPTV platform. Before constructing

a versatile NGN or IMS-based standard
Eyes video surveillance. This scenario seeks
to realize rapid service delivery through

S
platform, it is necessary to develop a IPTV STB-integrated terminals. Integrated
ince 2007, telecom operators have prototype of a convergent service system. terminals coupled with interoperable
expanded their IPTV subscriber By placing service provision first, platform IPTV services can more fully realize service
base, with global numbers expected optimization is directed towards integrated potential and delivery.
to exceed 22 million by the end of video services that minimize the technical Moreover, QoE is enhanced in two
2008. China alone is likely to have more and investment risks associated with IPTV ways. Firstly, traditional communication
than 2 million subscribers by the end of construction. Conversely, the ‘ostrich’ experiences are improved by, for example,
year, which is leading China Telecom to policy in which a standard platform is first evolving voice communication to video
expedite IPTV commercialization in order constructed on the belief that services and communication; transforming text phone
to secure a leading market position. IPTV applications will follow has proven to be books into mobile address lists; delivering
operators are being forced to adjust and unfeasible in practice. multimedia information access that
improve their IPTV systems to sustain At least two stages are required for an incorporates text, graphs, and videos; and
service innovation, derive a competitive IPTV platform to evolve into a convergent bringing professional video surveillance
edge, and thus increase subscriber base. In video system: 1) denotative consolidation systems into the home. Secondly, legacy
addition, operators need to fully tap the driven by integrated video service IPTV service experiences are enhanced by
potential of their existing subscribers and experiences; 2) connotative normalization elevating the traditional, passive viewer
service portfolios to increase ARPU. oriented toward IMS/SDP standard experience into a proactive, interactive,
IPTV video services must evolve from architecture. sharable entertainment platform.
media entertainment to GUI-based services The following scenarios demonstrate
that encompass other areas of everyday Phase 1: Denotative consolidation the platform’s consolidation and enhanced
life to give the service greater depth and service capabilities during this phase.
relevance, rather than just aesthetic appeal. This phase focuses on developing an AnyVideo: By consolidating NGN and
operator’s existing service systems and IPTV platform capabilities, this service
platforms into an IPTV infrastructure in combines two of the most widely used
Dual-phase construction a way that facilitates their interoperation. terminals–PSTN phones and mobile
This infrastructure includes NGN fixed phones–with the IPTV STB to provide
A convergent video system can form the or mobile systems, Presence, Group or customers with a video communication
basis of innovative IPTV service delivery Message capability components, and Mega service. Either side can turn off the video

JAN 2009 . ISSUE 46 48

 Enjoy • Enhanced experience
The new IPTV platform

on TV any time during a conversation, to input, coding and transcoding, protection,

retain the voice only. As well as lowering To keep pace with the rapid rise and raw data management; supply media
the requirement for video terminals, the content service for multiple terminals; and
service inherits the quality and reliability
of convergent video services, imbue content management capabilities for
of traditional voice communications and operators must prioritize service CPs and SPs.
has emerged as a widely applicable video Integrated management platform:
communication method. innovation; meanwhile, they This platform provides NEs, terminals,
V i d e o B e s t To n e : T h i s s e r v i c e and service management capabilities, and
incorporates the capabilities of both the
need optimize, assemble, and is interoperable with third-party BSS and
114 Best Tone and IPTV platforms to standardize the IPTV platform’s OSS systems. It also enables CPs and SPs
support multimedia information inquiries. to input, register, and manage content, and
In addition to an existing voice inquiry, support capabilities. The release services, enabling operators to deliver
114 enables users to search for information best practice for convergent integrated services independently.
on food, clothes, housing, and traffic, Unified content distribution network
and to push content on demand. By IPTV service innovation is (CDN): The CDN supports the unified
fully exploiting the strong presentation and intelligent distribution of various
capabilities of the IPTV STB multimedia to construct the platform media content and formats across the
terminal, Video Best Tone elevates user in two phases–denotative network. Content includes videos for
experience from voice to multimedia as IPTV, videos for Mobile TV, music, and
part of the overarching transformation to consolidation and connotative multimedia messages. This component is
multimedia content searches. designed to balance content load across the
Mega Eyes video surveillance: By normalization. network, and maximize network bandwidth
incorporating the capabilities of Mega utilization and storage resources.
Eyes and IPTV, this ser vice enables architecture that presents IPTV capabilities Business intelligent (BI) system and
home or individual users to access a through standard interfaces, specifically ads releasing system: These systems analyze
surveillance service through TVs. Platform via an SOA/SDP-oriented video service user consumption behavior in a closed-
improvements have transported this innovation platform based on NGN and loop, allowing operators to create static and
previously professionally oriented service IMS technologies. Key tasks in this phase dynamic user databases, and thus push the
to the home. Its wide application potential include the construction and integration of most suitable content, advertisements, and
can also range from monitoring traffic to the following: VAS.
kindergartens, and so the market value of Universal video service middleware: Development interface for convergent
Mega Eyes is set to be huge. This provides a set of functions spanning video service: This gives a full range of
Buddy TV: Incorporating Presence, service control, service logic parsing, and open platform capabilities for operators and
Group, and Message capabilities into IPTV, execution. Evolved from IPTV middleware, third parties to develop applications. The
the service expands TV viewing into a group this component separates service logic interface sets the stage for future service
or a community scenario, providing users from service execution to support each innovation, and supports the development
with a new platform for communication service’s basic capabilities. Additionally, and integration of basic video media
beyond time and space. the service middleware yields a service and communication services, including
development environment that makes integrated Phase 1 services, IPTV/Mobile
Phase 2: Connotative lower-layer capabilities available to upper- TV live broadcasts and VOD, Global Eyes
normalization layer applications through open APIs. video surveillance, and Video Best Tone.
Un i ve r s a l s e r v i c e e n a b l e r : T h i s To keep pace with the rapid rise of
Phase 1’s service-driven consolidation feature incorporates the capabilities of convergent video services, operators
fully integrates innovative key video basic service components covering IPTV must prioritize ser vice innovation;
capabilities into an IPTV platform media capabilities such as live broadcasts, meanwhile, they need optimize, assemble,
underpinned by business models that video on demand (VOD), recording; and and standardize the IPTV platform’s
operators have designed to deliver a basic NGN and IMS communication support capabilities. The best practice for
complete portfolio of service capabilities. capabilities, including Presence, Group, and convergent IPTV service innovation is
To sustain and stimulate the innovation Message. These basic enablers are supplied to construct the platform in two phases–
of integrated video services, operators are to the service middleware’s execution logic denotative consolidation and connotative
driven to seek partnerships with multiple as internal interfaces to support upper-layer normalization. In this way operators can
CPs and SPs to maximize the long tail service applications. eliminate the risks associated with single-
effect. In the second phase, operators are Content processing and a management step platform construction and ensure the
required to optimize and combine various platform: These elements provide a range of successful provision of integrated services.
platform components to realize a unified functions including unified media content Editor: Li Xuefeng [email protected]

49 JAN 2009 . ISSUE 46

 Huawei Communicate

Development is ramped up for applications and enhanced functionalities are ready for mobile terminals.
Handset manufacturers are geared up on the hardware side with new products constantly evolving like
the next-generation iPhone or Blackberry that are more multimedia terminals than phones.
Mobile terminals are the fifth media, following print media, broadcast, television, and the Internet.
Ads are anywhere that media exists, and the golden goose for Internet giants including Google. Can
advertising continue going for the gold in the fifth media?

By Li Dawei

Mobile
advertisement
adds big
revenue
JAN 2009 . ISSUE 46 50
 Enjoy • Enhanced experience
Mobile advertisement adds big revenue

Mobile ads: a new revenue Telecom service is saturated in the mature markets
and there is little room for an ARPU increase and
stream more profits from end users. The backend model
in mobile advertising breaks the barrier and virtual

T
he telecom market is currently in operators have emerged to provide free services for
flux, experiencing increasingly sharp end users that rely solely on advertising for revenue.
competition, annually decreasing Access permission is a prerequisite and precision
charges, and a slow increase of users in is a key point for mobile media to reach its full
most markets. Seeking new profit growth points, potential. Otherwise, mobile ads become irritating
more operators have implemented the strategy of spam messages and the advantages of mobile phones
providing diversified value-added services, and as of being used anywhere and anytime to target ads
this writing, the advertising market is booming. would turn into a nuisance for users.
In 2007, global advertising revenues exceeded As a metaphor describes it, “If someone throws
USD457 billion, with the total revenues in China garbage to you, you may complain, argue, or pick
over USD45 billion. During the past 30 years, ads it up. But if someone keeps throwing garbage at
revenues have been climbing at an average annual you, you will surely get angry.” This is the difference
rate of 40%. But no matter how huge the market is, between spam messages and television ads. With
the money spent on mobile advertising accounts for TV, ads are broadcast as part of the show for public
only less than 1% of total expenditures. consumption, but a phone is personal and people can
From a global perspective, leading telecom feel that their privacy is invaded. It is a prerequisite
operators like Vodafone, Telefonica, Etisalat, and for mobile ads to politely and precisely approach
France Telecom all believe that mobile advertising users to make ads acceptable.
has a bright future, and their platform investments
have demonstrated their faith. Clearly, top tier
operators can see the potential of mobile advertising. Precision as the unique
Mobile media features unique delivery options:
anytime and anywhere, interactive and personalized.
advantage
Most traditional media is not carried around by
people all the time like a mobile phone. Also, Access only means to clearly tell users that ads
advertising through traditional media often sidelines will be sent to them and ask their permission for
the differences between targeted individuals while the acceptance. In contrast, precision, targeted marketing
mobile phone provides an interactive medium with is more complex. Each mobile phone corresponds
virtually unlimited opportunities for targeting and with a definite individual user that makes precision
personalization. marketing possible. A simple concept that in reality

Table 1 Scale and forecast of the global mobile advertising market (Source: iResearch Consulting Group. Unit: USD million)

2006 2007 2008 2009 2010 2011

Market Scale 1432 2496 4316 6141 9006 11746

Growth Rate - 74% 73% 42% 47% 30%

Table 2 Scale and forecast of mobile advertising market in China (source: iResearch Consulting Group. Unit: USD million)

2005 2006 2007 2008 2009 2010

Market Scale 35 73 104 161 219 262

Growth Rate - 108% 42% 55% 36% 20%

51 JAN 2009 . ISSUE 46

 Huawei Communicate

is tough to execute. situation. model, media model, and marketing

For example, a certain lipstick is Pr e c i s i o n a n a l y s i s s t i l l p l a y s a n model.
advertised and the target users are women. important role after the ads is broadcast. Properties of users can be identified
The lipstick company gets almost the same Through the interaction between mobile through the following channels
result no matter they send the ads to one media, mobile advertising operators collect for audience selection: First, user’s
million or two million users be they men precise feedback from users. subscription information. Second, user’s
or women. As Goldbach’s conjecture in the For example, users are required to terminal features; The purchasing power
advertising industry says, “I know half of click and reply a message to learn more of users can be judged based on the
my advertising is wasted, I just don’t know about a product or buy products or price of their mobile terminals. Third,
which half.” Precision advertising helps cut services through the e-commerce system. user behavior analysis based on call
out the waste. For this reason, advertisers All information can then be collected detail records (CDRs) provided by the
are driven to select precision advertising and recorded by the mobile advertising service system; For example, learn about
and allocate part of their advertising platform. This information coupled with frequently browsed websites through the
budgets to mobile advertising. precise analytical statistics, makes it easy WAP gateway and analyze the hobbies
If the unit price of the non-targeted for a detailed user composition analysis and consumption preferences. Fourth,
ads is USD1 per person while the unit report to be generated to guide operators the hobbies and acceptable ads registered
price of the targeted ads is USD1.3 per on their marketing strategy adjustments. by users themselves. Fifth, the advertisers’
person, ads for 1 million women will cost Through precision advertising and data like their club membership and VIP
USD1.3 million. If non-targeted ads are performance assessment, operators can information.
used, despite the lower unit price, total provide adver tisers with marketing The data can then be fully exploited
advertising costs will rise to two million activities that are continuously optimized. only through systematic data modeling.
dollars due to needing twice as many ads Mobile advertising is evolving from a After data modeling, the models must
to reach the same audience. Targeted ads simple advertising service to an end-to-end be matched before they are used. That is
could result in a savings of USD700,000. marketing service. where data mining comes in as a standard
Fo r t h e s a m e o n e m i l l i o n u s e r s , technical means for modeling and analysis
precision advertising brings mobile of massive data.
operators USD300,000 more than non- How to realize precision
Data modeling
precision advertising. The other one
million non-target male users can then be
marketing
•• Audience model
targets for razors ads. Precision advertising
reduces marketing costs for advertisers, The core steps of precision marketing Analyzing users’ preferred channels: At
increases the revenues of mobile operators, include data modeling and model the earlier stages, channels are analyzed
and avoids disturbing the non-target mapping. Data modeling involves four according to basic user information and
audience, achieving a win-win-win aspects: the audience model, commodity data service use information, and then
supporting data can be provided for
advertising channel selection. At later
stages, advertising channels are optimized
as the number of ads recipients increases
Marketing and feedback to the advertising channels is
activities
tracked.
A n a l y z i n g u s e r s’ c o n s u m p t i o n
characteristics: Early on, consumption
Similar media

preferences of users are judged according

to the social and behavioral characteristics.
Sim
ce

The results are then analyzed and revised

ila
ien

rc
ud

om
ra

according to further market investigation.

mo
ila

Media
Sim

dit

At later stages, as ads become more widely

ies

model Adv
ertis
ntly for ing cha used, a thorough analysis is performed
que
t fre a ce nne
c o ntac dience rtain ls m regarding the characteristics of users
ia un com ost s
Med by a mod uitab
itiy according to user feedback to ads. This can
le
help precisely identify the consumption
Audience Commodity
model Commodities audience interested in characteristics of the audience.
model
Analyzing ads recipients’ characteristics:
Fig. 2 Mapping model Analyze the characteristics of the audience
and how advertising reaches them. This

JAN 2009 . ISSUE 46 52

 Enjoy • Enhanced experience
Mobile advertisement adds big revenue

is to gain more market research data and mechanism. With the accumulation of
Effectiveness of precision advertising support while growing more marketing tasks, the precision of the model
marketing depends recipients. will be improved further through scientific
modeling and assessment systems.
heavily on products and •• Commodity model Qualitative analysis will then be replaced
Analyzing commodity characteristics: by a quantitative analysis of marketing
experience, which include effectiveness.
Different commodities have different
not only flexible and characteristics in functionality, quality,
specialized data mining and
and application groups. Commodities
with certain characteristics correspond to
Forecast and scheduling
scheduling tools specifically an audience with similar characteristics,
which will guide marketing orientation. In business operations, multiple
for the advertising industry, Analyzing commodity correlation: marketing activities need to be coordinated
Commodities are sometimes related to because of overlapped schedules, different
but also the modeling each other. For example, a car that is sold targeted advertising conditions, user’s
hobbies, access licenses, and repeated
experience accumulated in needs maintenance; hotel rooms usually
ads through various channels. Precision
need to be reserved after air tickets are
practical operations. booked. marketing has certainly complicated
coordination of multiple marketing
•• Media model activities. A strong inventory forecast
and scheduling tool is required to enable
Analyzing media characteristics: Ads operation personnel to schedule advertising
media has different characteristics. For tasks directly and effectively, observe each
the same ads targeting the same audience, advertising area in real time, and view
the marketing effect will vary with the resource usage within any given period
ads channels. For example, an ads for a under any and all targeted advertising
basketball would be best placed on a sports conditions.
channel. As new media, mobile phones have
•• Marketing model definite advantages for launching
advertising services. Precision marketing is
Similar commodities, audience, and the key to developing these advantages.
advertising media share similar marketing Effectiveness of precision marketing
strategies. The correlation model for new depends heavily on products and
marketing activities can be built based on experience, which include not only
the commodity marketing history. flexible and specialized data mining
and scheduling tools specifically for the
Model mapping advertising industry, but also the modeling
experience accumulated in practical
The purpose of modeling is to realize operations. Data mining and modeling
the mapping between the commodity, based on the characteristics of marketing
audience and media. After modeling is activities is a method that combines both
complete, the marketing management expertise and experience.
system maps the three factors in automatic As a provider of mobile advertising
or semi-automatic mode to schedule the solutions, Huawei puts powerful technical
subsequent marketing activities. Marketing tools and auxiliary advertising services in
for new products can then be based on the hands of operators anywhere in the
experience gained from previous marketing world. Backed by extensive experience
efforts. For example, finding what media is and cutting edge equipment, Huawei can
most suitable for what type of commodity help telecom operators build precision
or which slant can achieve the best results m a rk e t i n g c a p a b i l i t i e s r a p i d l y a n d
and the most feedback. maximize the value of mobile media
Model mapping needs to be traced to make targeted advertising a golden
according to the marketing results and opportunity.
continuously optimized to form a feedback Editor: Pan Tao [email protected]

53 JAN 2009 . ISSUE 46

 Huawei Communicate

A new way to promote P2P messaging

By Yin Weihua

A successful MMS
campaign

F
rom June 6 to June 8, 2008,
China Mobile Beijing launched
a campaign with the theme of,
“Express your love via MMS and
receive a nice gift for the Dragon Boat
Day”. As part of its overall campaign, the
company sent an MMS seed message to
20,000 of its subscribers, which basically
stated that any subscriber who successfully
forwarded the MMS message to six of his
or her friends by using P2P messaging
would receive one McDonald’s spicy
chicken coupon in return.
A later survey revealed that around
10,000 subscribers had participated in the
campaign and had successfully forwarded
over 80,000 MMS messages. China
Mobile Beijing currently serves more than set of subscribers and encourages them and message writers to a greater extent, as
10 million subscribers. However, during t o f o r w a rd t h e s a m e m e s s a g e t o a l l their profit lies with the popularity of the
the campaign, the company invited only their family members and friends. By messages they compose.
2 in 1,000 of its subscribers, but these identifying the specific media element
subscribers’ contribution resulted in an contained in the seed message, the
8% increase in the company’s P2P MMS operator can easily track the spread of this Accurate content
traffic during the three-day period of the element among its subscribers, so as to identification a
campaign. gain a better understanding of the process
Back in the initial stage of the SMS of message propogation. pre-requisite
service, short messages that contained Such message propogation activities not
classic content helped to give rise to only help operators to identify the specific In most message propogation services,
the development of the SMS service interests of a certain set of subscribers, when a message is transferred between
throughout China and to give birth but also to gain a greater insight into mobile phones of different types, the media
t o a p l e t h o r a o f p ro f e s s i o n a l s h o r t the nature of the relationship between file’s format, name, picture resolution and
message writers. Likewise, the more subscribers. As a result, they will be able audit sampling may often vary, according
recent promotion campaign which was to launch low-cost, but high-yield message to the particular phone model being
l a u n c h e d by C h i n a Mo b i l e Be i j i n g marketing activities that are more relevant used. Therefore, without a specific type of
helped to motivate subscribers to forward to certain targeted subscriber groups. technology that can accurately recognize
multimedia messages via P2P, and helped In addition to being able to share a media files, subscribers’ experiences will be
to generate activity for this particular type multimedia message with family members adversely affected. However, operators will
of message propogation service. and friends, subscribers will also benefit suffer to an even a greater degree without
By using this type of ser vice, the from the enlarged popularity and spread having this type of technology made
operator sends a specific message (MMS of the P2P service. This model will also available to them.
or SMS) as a seed message to a particular help to motivate content providers (CPs) One could use as an example, a person

JAN 2009 . ISSUE 46 54

 Enjoy • Enhanced experience
A new way to promote P2P messaging

who decides to take two pictures. Let’s language (SMIL). Of these three solutions, ultimate networking goal, thus helping to
assume that the two pictures have the same digital fingerprint recognition most protect their overall investment.
resolution of 1024 × 768 pixels and the specifically fulfills the requirement for I n a d d i t i o n , H u a w e i ’s m e s s a g e
same extension name of “jpg”, and both zero recognition errors. By breaking the propogation system efficiently groups
pictures are identified by using the word technical barrier in message recognition, service capabilities into a number of
“Landscape”. However, these two pictures this solution greatly underpins the service templates. This allows operators
could carry different meanings, especially continued development of message to easily generate a service and deploy it
if one of the pictures was a mountain propogation. within 10 minutes, simply by choosing an
scene and the other was an ocean scene. Our fingerprints tend to be increasingly appropriate template and completing an
Therefore, it would be quite confusing thicker and deeper as we grow older. activity form. The templates also provide
and inappropriate to describe that both However, the overall distribution of a wide variety of incentives. One of these
pictures imply the same meaning. statistical fingerprint characteristics will incentives would include rewarding
Similarly, if the two pictures provide basically remain unchanged over time, subscribers according to the last digit
resolutions of 1024×768 and 512×384 providing the possibility for identification of the serial number they are assigned
pixels, and both carry the same meaning through fingerprint recognition. Each during a particular activity, for example,
and present the same image, it would also multimedia file also has its own digital the digit 8. Alternatively, operators may
be inappropriate to describe them as two ” f i n g e r p r i n t” . S i m i l a r t o a h u m a n choose to reward subscribers who are
pictures that have different meanings. fingerprint, its overall distribution of assigned a given interval of serial numbers.
Let’s return to the campaign again. statistical characteristics is also quite unique For example, an operator may decide
Suppose that a subscriber has successfully and stable. The overall distribution can also to award a prize to subscribers who are
forwarded the MMS seed message to six be presented as multidimensional vectors. assigned serial numbers at an interval of 5.
friends, but the system only recognizes In this way, the identification of two Another example would include using an
five. In this case, the subscriber fails multimedia files is as simple as a comparison incentive plan, which may stipulate that
to receive his due reward. In addition, of their multidimensional vectors. However, 1 in 100 subscribers could win a prize by
if this particular problem occurs on a when the multidimensional vectors differ participating in a lottery.
much wider scale, then the provider will slightly, the overall distribution of their Further, Huawei’s message propogation
receive an avalanche of complaints from statistical characteristics remains largely the system incorporates SMS and MMS
subscribers, thus causing considerable same. In other words, the two multimedia capabilities, which allows operators
damage to the operator’s service brand files carry the same meaning. to deliver SMS and MMS services
name. Likewise, if a subscriber forwards After tackling the core technical issue, simultaneously over the same platform,
six multimedia messages, other than Huawei has continued in its efforts to without the added worr y of mutual
the MMS seed message, but the system make the fingerprint recognition solution interference. This also enables operators to
somehow recognizes these messages as the easy to deploy and operate. deliver SMS and MMS services in a single
MMS seed message, then the subscriber Many operators, especially trans- activity, which not only helps operators
will receive a reward by mistake. The result provincial and multinational operators, to prevent duplicate investment, but also
will be a considerable increase in terms usually expect that a superior service can reduce maintenance costs.
of the operator’s cost for organizing the be either delivered across the network The message propogation service has
campaign, thereby causing the operator to or deployed locally according to local helped to greatly motivate subscribers to
suffer a significant loss. conditions. In an effort to address this forward P2P messages, aroused a greater
particular concern, Huawei innovatively degree of enthusiasm among content
proposed the idea of using cascading writers, and has inspired operators to
Tackling the networking to specifically suit service become more innovative. Following a
technological and deployment in various regions. The idea is surge of innovative services such as Flash
that while launching a particular service, Cartoon, Self-Designed SMS, and MMS
deployment issues operators may deploy the service first on Catcher, leading operators across the
a subnet and then expand its presence globe, which would include such well-
In consideration of the above scenario, to a group of subnets, or to the entire known names as, China Mobile, Vodafone,
it is essential that operators possess the network. Furthermore, Huawei’s message and Telefonica, are beginning to keep
technology to accurately identify an propogation solution ideally subdues a closer eye on the market and explore
individual message from a huge number of unwarranted conflicts between deployment it more vigorously. Therefore, there is a
P2P messages. on one or all subnets, and deployment good reason to anticipate a boom in P2P
After 5 years of hard work, Huawei across the entire network. The solution also messaging in the near future, fueled by the
has finally developed three solutions: enables operators to properly time their message propogation service.
digital fingerprint, digital watermark, service deployment efforts according to
and synchronized multimedia integration various conditions and move towards their Editor: Xu Ping [email protected]

55 JAN 2009 . ISSUE 46

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JAN 2009 . ISSUE 46 56