ICT Transformation SDN/NFV

36th Annual Conference Kasane, Botswana 27-29 April 2016

2

Industry Trends

Huawei ICT Transformation Strategy

Huawei SoftCOM Strategy

3

Telecom industry is facing

Unprecedented opportunities ……

$15 Trillion Digital transformation

market

(by 2025)

…. But Reconstructing of Communication Networks will be required

4

Carriers are Transforming from Pure Connectivity Providers

to Digital Service Providers as the value shifts…

Global Telcos Revenues (Trillion US$)

2016

2.45

15%

20%

2012

2.00

35%

30%

70%

15%

10%

5%

Declining Growing

Voice

Broadband

SMS

Traditional Telecom

Service

Single services change to

diversified digital services

Source: Gartner and Ovum Analysis

Digital Service

Voice + SMS

FBB, Digital

Home, Video

Mobile Data

Traffic/Mobile

Internet

IT/Cloud

Service M2M

Video

Smart Home

Education

Healthcare

Music

5

Challenges Faced by the Telecom Industry

New Revenue Growth

TCO Reduction

New Value proposition in the Digital Age

Future Service Model

Social

Networks

Content

Networks

Enterprise

Networks Home

Networks

M2M

Networks

Virtual

Networks Telco

Networks

BB Policy in the Digital Age

•Today: Regulated and legacy-focused

Heavy Asset vs. “0’ Asset (OTT)

• Future: National Strategy on Broadband

Infrastructure

Critical Role in the BIG Economy

19%

94%

?

Saturated and Declining

Today’s Service Model

($100B)

Inefficient and Unsustainable

Today’s TCO Structure

TCO

2002 2012

Future TCO Structure

Optimized, Open, Automated and Agile

DevOps

Network

Management

Customer

Services

Cloud IT Service

Innovation

Capex

6

Industry Trends

Huawei ICT Transformation Strategy

Huawei Softcom Strategy

8

New Service Driven

TCO/TVO

Driven

Network

Architecture

Driven

Four Forces that are Driving Network Transformation

Network

Transformation

•Mobile Video&IoT, etc.

•Super Rich Content

•Based on Cloud

•B2B

•Diversified and Fragmented Requirements

•Cloud Computing

•SDN/NFV

•Big Data

•No Strong on Service Innovation

•Competition with OTT Service

•Attract 3rd

Parties for Service Innovation •High OPEX

•Increasing Investment for Traffic Growth

•Low Resource Usage

Innovation

Driven

9

Relevant Technical Trends

SDN

Enable Underlay Network

Flexibility

NFV

Eliminates Network APPs

Rigidity

Separation of Hardware and software

Separation of service logic and data

Now: Native Centralized Control

plane + GTP overlay

Future: Air interface / Gi LAN

Flexibility

NaaS / IaaS / PaaS / SaaS

Cloud Computing

Everything as a Service

10

NFV: Leverages the Cloud Values for Telcos

Virtual Compute

Virtual Storage

Virtual Network Virtual

Compute Virtual Compute

Virtual Storage Virtual

Storage

Virtual Network Virtual

Network

vEPC

MME SGW PGW

vMSE

SBR SA Video Opt.

Cloud OS

Realize Network Functions Virtualization Flexibly

Orchestration

Management EFFICIENT

UTILIZATION

TCO Saving & Fast TTM

COMPREHENSIVE

APPLICATIONS

Fast Service Innovation

SMART MANAGEMENT

Automated Scaling

MULTI-VENDOR

ENVIRONMENT

Full Series of Capacity & Dimension

Functions

Virtualization

Infrastructure

Apps From Different Parties

APP APP APP

11

NFV Approach and Benefits

NFV: Virtualized network functions running on COTS servers

•Use hardware resources efficiently

•Improve service deployment flexibility

•Achieve reductions in OpEX and CapEX

•Achieve reduction in hardware lifecycles

12

SDN: Cloud-formation at Network Control

• SDN Principle: Control Plane and Data Plane Separation

• To Structurally Optimize Networks and Simplify & Automate Control/Management

Network OS

Controller

Metro Network

Controller

Datacenter Network

Controller

Backbone Network

Abstraction Programmability Virtualization Open API

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DCI & Core

What Can SDN & NFV Do for Carriers?

ACCESS METRO & CORE DATA CENTRE

Connectivity Only

NaaS: customize network for

monetization

Today

SDN & NFV

Mobile Backhaul

Massive access nodes

cause high

CAPEX&OPEX

Simplified and efficient

LTE bearer network

Slow & costly service

innovation

IT style service

innovation paradigm,

shorter TTM

Hosting only, network

mismatches cloud

computing in velocity

and scale

Cloud service enabled

by virtual tenant

network, new ICT

business era

No revenue share for

OTT content and IT

managed services

Extend BIZ to home

and enterprise via

network based virtual

services

Under-utilized network,

no differentiation

High network utilization

and customization

Service Edge Cloud DC

Fixed Broadband

14

Industry Trends

Huawei ICT Transformation Strategy

Huawei SoftCOM Strategy

15

Experience Centric SoftCOM —Huawei vision of carrier transformation

Past 10

years

Next 10 years

IP for all service

New philosophy and technologies of Cloud computing

TDM

ATM

SDH

FR

No.7

Ethernet

……

ALL IP

&

FMC

eal-time

n-

demand ll

online

IY

ocial

4 Key Processes:-

Equipment Level Cloud Formation, Network Level , Telecom IT, Internet Orientation

16

Transformation in Four Areas

RRU

Small Cell

CPE

ONT

D

D

Automated

Driving

Logistics

Health

Phones

D

Agile Network D

D D

D

1. Operation Transformation:

Internet Style Operation, All Online, On-demand, Big Data

2. Business/Service Transformation:

Beyond connection, E2E ICT Service Based on Cloud

17

Architecture of Huawei SoftCOM ..OpenStack-based Cloud OS Enables Open Architecture

ICT-O

IES BES Big Data

Business Orchestration & DevOps Tools

apps for Biz apps for OM Open API

apps for consumer

vEPC vMSE vSDM

CloudOpera

GSM UMTS LTE SDN

Controller vIMS

COTS

FusionSphere Computing Storage Network

CloudBB

ADSL VDSL G.Fast

Cloud DSL/OLT

CloudEdge

Telco apps SMS/IPTV…

IT apps

(SaaS)

CloudCore

vNE vSPS Digital SDP

Digital inCloud

Digital inTouch

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SoftCOM VNF Roadmap For Commercial

CloudCore(Core network)

CloudEdge(Wireless)

Digital in Cloud(Software)

SDN(Fixed network)

DCN(Transport)

Released Ready for Contract Planned Planning

` Q4 Q1 Q2 Q3 Q4 Q1

2015 2016 2017

CloudEdge1.1 CloudEdge2.0

CloudEdge17.0

vMME/vSGSN vSGW/vPGW/vGGSN vePDG vCG Remote GW vEPSN

SDN V1R1C00

SDN V1R2C00 SDN V1R3C00

vBNG

DCN V1R6C00 (TR5-2) DCN V1R6C00 (TR5-3/5) DCN V2R1C00(TR5-1/2)

vNGFW/vRouter/vLB (Eudemon1000E-V)

vCPE (AR1000V)

CloudCore15.1 CloudCore16.0

vIMS vSDM vSBC vDRA vUPCC vUC

CloudCore16.1

vCS

VAS Cloud V100R001C60 VAS Cloud V100R001C50 VAS Cloud V100R002C00

vPE

SMS/VMS/MMS/USSD RCS/NGIN

vSwitch (CE1800v)

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Requirements Solution Achievement

Everything moves on cloud

All new solutions on the cloud

Network expansion to the cloud

Facing EOL devices to the cloud

Huawei provides both

solution & system integration

Flagship of Vodafone Telecom over Cloud

Fast delivery in 8 months

Carrie-grade SLA on cloud

Valued experience for Vodafone cloud

strategy

Network Cloud IT Cloud

Network

Functions

Consumer &

Verticals

Internal IT

Services

Cloudification Openness Automation

Joint Innovation Cloud OS

vIMS

EMS

VNFM

Horizontal

Integration

Vert

ical In

tegra

tion

Infrastructure

Management

Full cloudified VoLTE solution

Automatic operation by VNFM

Acted as Single Point of Contact

Italy Vodafone — The world’s 1st commercial cloud VoLTE network

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Data Centres Telco Network

ICT Service / Applications

(B2C, B2B, B2B2x, O2O, Enterprise, Consumer, OTT, …)

Existin

g IT

Syste

ms

Existin

g C

T sy

stem

s

Core Service Enablement Capability

ICT Converged O&M Transformation

• Lifecycle Management

• Management Automation

• Real Time

• Big Data Analytics

Co-innovate through business engagement

Enable new services in the eco-system

IT Transformation

(Cloud DC-driven)

• Consolidation

• Virtualization

• Parallel

• Distributed

CT Transformation

(SDN and NFV-driven)

• Control

• Programmable

• Virtualization

• Abstraction

Goal:

Leverage telco’s

existing

infrastructure (hard

asset) and core

service capability

(soft asset) to

establish new value

propositions in the

digital world.

• Identity

• Location

• Presence

• API Manager

• Billing

• Service Orchestration

Simplify operation and enrich user experiences

Transform infrastructure

SoftCOM: Functional View of the New ICT Platform

O2O Online to Offline

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UBB 2020 A Better Connected World

36th Annual Conference Kasane, Botswana 27-29 April 2016

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What is UBB 2020?

Business Strategy Network Strategy

FMC 2.0 GigaBand Network on Demand

UBB 2020

• Broadband（FBB、MBB-4G/5G)

• UHD-Video（4K/8K、Mobile-1K/8K）

• Smart Home & Monetization

• Enterprise（VPN、NaaS/IaaS）

• Connect 2020 @ NBN/ Policy

• Giga Access Solution

@Fiber/Copper/Coax/Wifi/Hybrid

• Simplification

• SDN、NFV

A Better Connected World 1 Industry Vision

2 Telco Strategies

3 Key Solutions

Continuous Service Innovation, Ultra Broadband Infrastructure, Network Architecture Revolution

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Start Business Transformation towards FMC 2.0

MBB

UHD Video UHD Video

Smart Home

& IoT

FMC 2.0 = FBB + MBB + Content

FBB

MBB

FBB

MBB

FBB

9

Service innovations have promoted the integrated operation of Mobile Broadband

(MBB), Fixed Broadband (FBB), HD video, and Smart Home services, increasing the

benefits to both operators and subscribers.

Fixed Mobile Convergence (FMC) 2.0 will become mainstream and pose higher

requirements on telecom networks.

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Network Evolution to ‘on-Demand’

Network on Demand

Simplification

• Lower Latency：OTN /MPLS to edge，

Reduce layers（5-3）

• 0 Bottleneck：E2E bandwidth for

Video

• Decommissioning：Old Equipment

• vDC

• SDN VPN、vCPE

• SDN IP-RAN

• SDN IP-CORE

• ……

vDC: 96 -> 6

SDN IP Core

Usage: 30% -> 90%

Partial-Softening

Implementation，step by step

（Cost-saving、Efficient、 flexibility ）

Overall Planning

（Agile、open）

16

25

Profitable & Sustainable

Efficient Construction

with Less Investment

Building a Better Network for FMC 2.0

Making FTTx Faster and Easier

Fixed wireless Broadband

Broadband Monetization Smart Home & Smart Office

Long TTM & High Cost

FastFTTx

WTTx

Poor ROI

Better UHD Experience Simplified Network

High Throughput Router Lack of Differentiation

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LTE

Multi-stream

Bonding HetAN

FTTH Docsis 3.1 Vectoring

/ G.fast

UBB: <25Mbps is “Yesterday’s Broadband”

25Mbps

U.S. FCC has

Redefined Broadband

1Gbps

50% to 60% of UK HHs

( 92% of urban Americans)

25Mbps: The new threshold for broadband

Millions of homes and

businesses by 2020

Backbone

Microwave

+ Any Media

Super-Fast

Access

400G

IP+Optical Metro

Aggregation

Tera-bit

Router

Enable E2E Super-Fast Network

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Video Drives the Rapid Growth of Bandwidth & Traffic

1080P 4k

8k

8k 3D

Holographic TV

6~10Mbps 30~60Mbps 400Mbps~1Gbps 10Gbps+ 200~480Mbps

720P

2.2Mbps

360P

0.55Mbps

2013 2014 2015 2016 2017 2018

17,455 22,600 29,210

37,783 48,900

62,972

Internet Video Traffic (PB per month)

1 4K Movie

30GB (90min)

4K: the BEST Content to Feed UBB Pipe

28

Smart Home

is the next gold mine

What is the Control

Point at smart Home ?

29

Huawei Smart Home Solution

WiFi Zigbee

Home entertainment

Smart Home Gateway

Home Health

Home Monitoring

Home Security

Zigbee

Cloud

Storage

Reg.&Auth

User

Management

Policy & QoS

Device

Management

API

management

Data

Management

BSS

/OSS

Home Automation

Smart Home Platform

Broadband Network (ADSL/FTTX/3G/LTE)

2015 Q4, Trial phase, the services will be

tested.

2016 Q1, Transition phase, integration with

BSS and prepare the commercial phase.

2016 Q2, Commercial phase.

Highlights

Steps

Benefits

High level security to protect the privacy

Platform openness to build ecosystem

Simple deployment enabled by the

wireless connection (Zigbee/WiFi)

Enhance the Broadband Service branding

by providing more value-added service

Increase the ARPU and the subscriber

stickiness

Drive up the bandwidth usage and

improvement

Telefonica Smart Home project phase

Smart Home helps the operator:

Key requirement of solution

30

Key Success Factors in Ultra-broadband Era

• Ultra-broadband over any medium

• FTTx & WTTx synergy Every where

• Focus on video experience

• KQI measurement/optimization Experience

• More sophisticated routing algorithm

• IP & Optical network synergy Efficiency

31

UBB 2020，A Better Connected World

1. No FBB No Future，Embrace FMC2.0

2. Penetration First，Take Broadband to GigaBand

3. Step by Step，Evolve to Network On Demand

17

32

How to Develop NBN for

National ICT

36th Annual Conference Kasane, Botswana 27-29 April 2016

33

Broadband has become an international agenda

and become strategic infrastructure

USA: FCC redefined broadband to +25Mbps Korea: broadband upgrade to 1Gbps by 2020

UK: super fast broadband up to 500Mbps

NGA1.0: FTTC @ 40/80M

NGA2.0: G.fast @ 500M

BDUK: Government invest 1/2 in rural

China Fibre City: 4M => 50M => 100M => 1G

40Mn FTTH in 2014 (Huawei: 20M)

80Mn in 2015

Premier Li Keqiang put much pressure on operators

Giga Korea (2020)

10Gbps (SKT)

1Gbps (100%)

Gigabit City (2015)

25Mbps

1Gbps

(baseline)

(in all 51 states)

1Gbps

50Mbps (developing city)

(developed city)

China NBN (2020)

“I believe America should lead the world in broadband penetration”

“Universal Br oadband Access is crucial for Britain’s economy”

Digital Britain

ITU Broadband Target 2020

European Unit promotes 50Mbps by 2020

Fast BB @ 30M (100%)

Ultra BB @ 50M (50%)

EU Funding up to 50% in

Gray Area; up to 85% in

White Area

Digital Agenda

55% HH Internet Access

60% Internet Individuals

90% BB Coverage in Rural

Tariff <5% of average

monthly income

2020

34

NBN Definition

Fast Fibre National Open Access Strategic

35

25+ Mbps

Ultrafast

<5% HH. Spending

Affordable

90%+ Population

Ubiquitous

The landscape of broadband environment in

2020

36

To achieve a digital nation，a number of challenges

that need to be tackled

“bandwidth has not reached a large part of the country especially in rural areas”

“technologies and devices to ensure high speed connectivity are not in place”

“Last mile connectivity is a weakness”, average FBB penetration only 9.7%

“lack of digital content and applications that have local relevance is a major hindrance to broadband up take”

37

6 Key Success Factors to Promote NBN

Development

3 FAVOURED

PPP MODEL

Attract Private Sector Participation

4 STATE

FUNDED

SUBSIDY

Financial Subsidy on CAPEX Investment

6 DEMAND

STIMULUS

MEASURE

To Promote Broadband Utilization

5 ENCOURAGE

COST

REDUCTION

Through Network Sharing

1 CLEAR

BROADBAND

POLICIES

Guiding BB Objectives ad NBN Rollout Plan

2 MANDATE

OPEN ACCESS

State intervention to Promote Competition

38

National Broadband Network （IGWs + WAN IP Backbones + MANs + ANs）

Building a NBN infrastructure with every network

element to support ICT applications

E2E Construction Openness Multiple Accesses

Simple Agile Convergent Flexible

Cloud Platform（Data Center, Population/GIS/Enterprise DB）

Application Platform （e-Government, e-Education, e-Health, IPTV, ecommerce, Surveillance…）

High Speed Internet e-Entertainment IPTV/OTT eCommerce Telepresence

e-Health e-Education e-Agriculture e-Tourism Smart/Safe City e-Government

39

Huawei delivery capabilities and successful

references in NBN domain

Urban & Rural

Broadband Provision

E2E Solution

Multi-Vendor EOT

E2E Planning

Turnkey Delivery

World First

Open-Access Network

• Turnkey delivery • EOT delivery Model

• Joint Go-To-Market

• Joint Innovation Center

• National ICT Strategy

• Business & Network

Consultancy • Network Planning

Planning

Deployment

Commercialization

30

70%

U.K.

S.G.

M.L.

Q.T. Global

Market Share

Projects Awarded