Five Trends of Small Cell

Dr. Philip Song,

Director of Small Cell Marketing, Huawei

London, 29th Jun 2016

2

*Source: Dell’oro

Investment on In-building System is Increasing

Operator Increasing In-building System Investment

12.82 11.3

16.417

12

32

0

5

10

15

20

25

30

35

A City B City C City

Massive Indoor Weak Area Suppress Experience

Network weak coverage ratio(RSRP<-105dBm)

Indoor weak coverage ratio(RSRP<-105dBm)

Indoor MBB Development Becoming More Important

*Source: Huawei mLAB

$0.0

$5,000.0

$10,000.0

$15,000.0

$20,000.0

$25,000.0

$30,000.0

$35,000.0

$40,000.0

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0

2014 2015 2016 2017 2018 2019 2020

Indoor Coverage Units (000's) Macro BTS Units (000's)

Indoor Coverage Revenue($M) Macro BTS Revenue($M)

0

5000

10000

15000

20000

25000

30000

35000

40000

0

50000

100000

150000

200000

250000

Sep-14 Dec-14 Apr-15 Jul-15 Oct-15 Jan-16 May-16 Aug-16

Indoor Traffic Increasing Much Faster = 1.65x

Outdoor Daily Traffic(GB) Indoor Daily Traffic(GB)

3

Driver1: Being Higher Return on In-building System Investment

75.17

7.32

43.11

7.02

Avg DL Thp Avg UL Thp

LampSite Other Indoor System

20XOutdoor

33xIndoor

Indoor Traffic Increase Faster

in next 5 years

Source: Commercial Network Data

Indoor Traffic Absorption

Capacity

• Fast Deployment

• Easy O&M

CAPEX Saving

OPEX Saving

Indoor

Digitalization

Create more

Value

Digital Indoor Solution leads

to 70% TCO Saving

• Simple Architecture

2013 2014 2015 2016 2017 2018 2019 2020

Average ROI of In-building System

Average of ROI in CBD

ROI of Macro

ROI of In-building System is Higher than

That of Macro since 2015

4

Driver 2: User Experience Improvement=User Loyalty Cultivation

Cost per Churn Cost for KeepingSubscriber

Source: Wireless Explore

Avoiding user churn is more

important to attract new customers

Data from One UK Operatorcustomer complaint

decrease from 7% to 0%

LampSite @ Kunming Airport

LampSite @ National Stadium

0 congestion network in

90000 seats capacity

stadium

LampSite @ Jakarta

voice increase 2 times

data increase 3 times

Build a customer-centric network

7x

5

Driver 3: Smooth Network Evolution Save Long Term Investment

Ready for 5G

UMTSLTE

LAA

Integrated in one box

...

Multi-Mode Multi-Band

4CC CALicense and Unlicensed

Technology Upgrade

3G -- > 4G 4.5G

DMIMO 256QAM

CloudRAN

eMBB 10Gbit/s

eMTC 1million/km2

uRLLC 1ms

SingleRAN

6

Driver 4: Maximum Spectrum Efficiency for Higher Capacity

Small Cell improve spectrum

efficiency with N times

D-MIMO

Virtual 4T4R

2X times

Higher

Modulation

256QAM

1.3X time

3CC CA

DL 3CC CA

3X times

Cell Split

Cell Split

N X times

Spectrum efficiency can be improved

more effective in indoor scenario

F 2

F 2

F 2

F 2

F 2

7

Driver 5:Competitiveness is the Foundation of Success

Indoor Digitization Bring Competition

Continue Investment Bring Leading Position

World’s 1st

LampSite D-MIMO

Commercial Trial

Asia 1st

Indoor 1Gbps

Release

Thailand 1st

Lampsite 3CC

CA Release

Thailand 1st

256QAM

Release

Continue investment at indoor digitization

Operator A Keeping

Leading in Thailand

10485

2135 2011

95.64%

80.17% 76.40%

0%

20%

40%

60%

80%

100%

120%

0

2000

4000

6000

8000

10000

12000

Operator A Operator B Operator C

Absolutely Leading in Indoor Coverage@Beijing

Small Cell(Sites) Coverage

Deploy In-building system in hotspot for

leading competitiveness which

contribute more 6.4% subscribers

in 2015H1 Source: Huawei MBB

8

Outdoor Small Cell is Must in MBB Network Evolution

Small Cell help to release the potential traffic

Total Traffic (Gbit) Traffic Increase Rate

38

89

106

51

37%

43%

28%

39%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

20

40

60

80

100

120

140

160

Philippine Canada Kuwait China

Macro Site Micro Site Traffic increase rate

39

13

36

93

116

30

12

60

Small Cell for more revenue Small Cell for better experience

Different coverage standard VS Co-site Network

Small Cell

CS 12.2K, PS 64K

Voice

2 Mbps/720P

Video & data

R 0.7R

High quality network with Small Cell precise coverage

LTE Traffic Density

GU Traffic Density

Capacity

9

Shopping Mall

Office

Transportation Hub

StadiumStreet

MacroMacro

2. Outdoor

Multi-Mode

Multi-Band

3. License&

Unlicensed

Convergence

4. New Biz

Model&

Ecosystem

5.New

Architecture

For Massive

Deployment

Five Trends to Small Cell 2020

1. Indoor

Digitalization

10

2. User Experience

Drive

Bird’s Nest

0 Congestion for

9000 people

Kunming Airport

0 Complaint

Jakarta

3X Traffic

5. Competitive

Drive

Leading Position

Branding

4. Spectrum

Efficiency Drive

Micro Number

>3 times to Break

the Frequency

limitation

Trend 1: Drive MBB Industry Upgrade with Indoor Digitalization

1. Being Higher

Return

Create more Value

Capex Saving

Opex Saving

3.Smooth

Evolution Drive

0 touch

upgrading

LampSite(>5000m2)

pRRU3911(Indoor) pRRU3916(Outdoor)

PicoBTS(<5000m2)

BTS3911B

Indoor Digital Solution

for Full Scenarios

11

Trend 2: Maximum Site Value with Multi-RAT & Band Small Cell

GSM

UMTS

Multi-Mode

Wi-FiFDD

TDD

700M

Multi-Band

...

2100M 3.5G

license and

unlicensed

6 CC CA IBW ≥ 120M

OBW ≥ 600M

high integration

chip

New Technology for 1Gbps

One-box for Smooth evolution

Double

Efficiency

UMTS

LTE

Single band & Single RAT

UMTS+LTE

Multi-band & Multi-RATTCO of Micro Deployment

Hardware 30%

Backhaul 35%

Micro Site TCO Saving

00.20.40.60.8

1

without Multi-band &RAT

with Multi-band &RAT

50% Saving

Multi-Band & RAT reduce Site Cost

Full Series Small Cell

Supporting Multi-

Band & Multi-RAT

BTS3911E

(UMTS+LTE)

BTS3911B

(UMTS+LTE+

Wi-Fi/LAA)

pRRU3911

pRRU3916

(GSM+UMTS+

LTE+Wi-Fi/LAA)

12

Trend3: Improve Spectrum Efficiency by Unlicensed and

Licensed Technology Convergence

Convergence Starting

from Small Cells

Maximizing the

Spectrum Efficiency

Work Together with

Wi-Fi

APT CEPT ASMG ATU CITEL

(NA)

CITEL

(LA)USAChina BrazilSaudi

ArabicUK S. Africa

Average 500MHz gap

720

370

687

550

790

630550

640

370

704

410

360

Source: ITU, Huawei, Q2 2015

the global average frequency gap with ITU2015 is

around 500MHz

Licensed LTE

DL

LAA

DL DL

Primary

CarrierSecondary

Carrier

Convergence by LAA/LWA

100% 189%

Average Cell THP(Mbps)

Pico

LampSite

Micro

Coverage increase

40%

Better Mobility

13

Voice

Digital Services

Traffic &

Connection

2016 Time

Industry Scale

Grid Level DB

Data Center

Digital Service Becoming New Revenue Engine

Macro

LampSite

Macro

LampSite

Wi-Fi

Micro

Micro

Pico

Pico

Wi-Fi

Data Mining MEC

3rd

3rd

3rd

Trend 4: Build New Biz and Ecosystem with Small Cell

14

RAN-Real Time

Macro(LTE & 5G)

WiFi AP

Micro

pRRU

RAN-Real Time

Cloud BB

pRRU

IP

IP IP

IP

RAN-Real TimepRRU

Mobile Cloud Engine

RAN–Non Real Time

GW AC

Cache …

• Faster New RAT Introduction Higher

• Efficiency by Recourse Balancing

LampSiteIP

Pico

Trend 5: CloudRANTM based Small Cell for Massive Deployment

• Centralized Capacity, Coverage and

Transmission Optimization

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