Building a Competitive Edge Through TL 9000. Trends in Mobile Internet Business. VIP Voice. Special Topic: Mobile Internet

APR 2012 VOL. 14 NO. 2 ISSUE 139 08 Smartfren: Migrating for a Better Future 17 Opening Network Capabilities in the Mobile Internet Age 24 H3G Austria s Mobile Network Excels in Third-Party Testing VIP Voice Building a Competitive Edge Through TL 9000 Special Topic: Mobile Internet Trends in Mobile Internet Business Tim Harden, vice chairman of the QuEST Forum executive board and president of supply chain and fleet operations at AT&T Services

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CONTENTS Tim Harden, vice chairman o f t h e Q u E S T F o r u m e x e c u t i v e b o a r d a n d president of supply chain and fleet operations at AT&T Services, shared with us how TL 9000 improves AT&T s supply chain, how it improves the entire ICT industry, and how it will progress in the future. 03 VIP Voice 03 Building a Competitive Edge Through TL 9000 Reporters: Liu Yang & Zhao Rujing 08 Smartfren: Migrating for a Better Future Reporters: Liu Yang & Zhao Rujing Tech Forum 14 11 Evolving from Internet to IDN By Zhang Chaofeng & Wu Qiang Special Topic: Mobile Internet 11 14 Trends in Mobile Internet Business By Li Jun Mobile Internet is open and collaborative, like PC Internet, but it also inherits the realtime, privacy, convenience, and location features of mobile networks. 17 Opening Network Capabilities in the Mobile Internet Age By Yao Yuan 19 21 Digital Office: Creating a Digital World Social TV Is Entering Households By Zhang Rong By He Kang APR 2012 ZTE TECHNOLOGIES 1

CONTENTS A technical magazine that keeps up with the latest industry trends, communicates leading technologies and solutions, and shares stories of our customer success ZTE TECHNOLOGIES 24 26 28 Success Stories 24 H3G Austria s Mobile Network Excels in Third-Party Testing By Cao Qingwei & Chen Yizai H3G Austria was not only the fastest network, it also achieved a score of 476 out of a possible 500 in customer evaluations of overall network performance, said Connect editor Bernd Theiss. Indonesia s Sinar Mas Group Heads Towards a New IP Era By Liang Yulong Vodafone: Exploring the Enterprise Network Market in India By Wan Yunfei Editorial Board Editor-in-Chief: Jiang Hua Deputy Editor-in-Chief: Huang Xinming Editorial Director: Liu Yang Executive Editor: Yue Lihua Editor: Paul Sleswick, Wang Pingping Circulation Manager: Wang Pingping Subscription / Customer Services Subscription to ZTE TECHNOLOGIES is free of charge Tel: +86-551-5533356 Fax: +86-551-5850139 Email: wang.pingping@zte.com.cn Website: wwwen.zte.com.cn/endata/magazine 30 Solution STB-based Motion Sensing Game Solution By Wang Chuanjiang Editorial Office Address: NO. 55, Hi-tech Road South, ShenZhen, P.R.China Postcode: 518057 Tel: +86-755-26775211 Fax: +86-755-26775217 Email: yue.lihua@zte.com.cn 32 Third Eye Market Share Alert: 3Q11 Global ON By Dana Cooperson, OVUM ZTE Profile ZTE is a leading global provider of telecommunications equipment and network solutions. It has the widest and most complete product range in the world covering virtually every sector of the wireline, wireless, service and terminals markets. The company delivers innovative, custom-made products and services to over 500 operators in more than 140 countries, helping them achieve continued revenue growth and shape the future of the world s communications. 35 News Brief ZTE Attains Global No.1 PCT Patent Filings Spot 2 ZTE TECHNOLOGIES APR 2012

VIP Voice Building a Competitive Edge Through TL 9000 Reporters: Liu Yang & Zhao Rujing TL 9000 is a quality management system designed specifically for the communications industry. As the minimum floor for performance, it has benefited both suppliers and service providers. Tim Harden, vice chairman of the QuEST Forum executive board and president of supply chain and fleet operations at AT&T Services, shared with us how TL 9000 improves AT&T s supply chain, how it improves the entire ICT industry, and how TL 9000 will progress in the future. He praises ZTE s contribution to the QuEST Forum and believes the Forum helps ZTE because of its focus on quality. Tim Harden, vice chairman of the QuEST Forum executive board and president of supply chain and fleet operations at AT&T Services Q: Could you briefly introduce TL 9000? A: TL 9000 is a worldwide standard that was established in 1998, so it is relatively young. It was built off ISO 9001 which does not change frequently. But the ICT industry and companies that are part of the industry have technology that changes every 12 to 18 months (according to Moore s law). Because APR 2012 ZTE TECHNOLOGIES 3

VIP Voice of this, we need to ensure we have a way of improving overall quality and build on a standard that is recognized worldwide. ISO 9001 is that standard, and the ISO governing body allowed the QuEST Forum to manage the TL 9000 standard, which includes the ISO. The intent of TL 9000 is to respond quickly to changes in technology while using the ISO as a basis. TL 9000 is about increasing the level of performance of products that come to service providers and their customers so that all of the industry benefits from an increased level of quality. This saves the supplier and service provider money and improves the overall experience for end users. The mission of the QuEST Forum is to ensure there is a worldwide focus on quality and that TL 9000 and ISO 9001 become the base quality standards for companies that work in the ICT industry. Actually, we ve expanded from telecommunications to ICT because software is now a very big part of the delivery of a product. Many software companies are now covered by TL 9000 as well. Q: AT&T is a founding member of the QuEST Forum. How can AT&T improve its supply chain through TL 9000? A: Ten companies came together to start the QuEST Forum in 1998, and AT&T was one of those founding companies. At that time, there was a void in the industry. Many new companies were delivering products to those ten companies, and the products did not have the right level of quality. So the ten companies came together and worked with ISO standards to create and manage the TL 9000 standard. The standard was developed by both suppliers and service providers. If you look at where AT&T was in 2002 (when we started tracking our suppliers) to where we are now, we went from suppliers meeting 77% of their performance targets to suppliers meeting 92% of their performance in a ten-year span. That is a significant improvement in quality in that ten-year span. It translates into faster introduction of products, and from a supplier s standpoint, it translates into faster cash and faster earnings. From when I place the order to when I pay the supplier, the time is much shorter because now I have a quality product coming in. There is less re-work for both the supplier and AT&T, which means lower costs. You don t have to come out many times to fix a product that has just been introduced. There are great benefits for both suppliers and service providers. The experience for end users is also better because they are able to immediately get the benefit of the product without having to call back to service the product. That s why AT&T continues to be involved in things that significantly lift the overall performance of suppliers. We also ensure that prospective entrants into the market achieve a minimum level of performance before they even get their foot in the door. The industry is performing much better as a result of this. ZTE has demonstrated a focus on TL 9000, and this is one of the traits AT&T wants to see. TL focuses on the experience between customers and suppliers. You can see much-improved overall performance in companies that are using it. Q: How will ser vic e qualit y be affected by the growth of telecom services? A: Overall performance has improved and will continue to do so as more companies get involved. One of the benefits of the QuEST Forum managing the standard is that as new expectations emerge from the marketplace, we can quickly introduce new metrics to manage product performance. A product that provides video to an end user is a good example. I don t just want the hardware delivered on time; I also want the performance of the box to satisfy all requirements and expectations. With TL 9000, I can measure not only the delivery but also each of the built-in criteria to see whether the box is doing exactly what it is supposed to. If not, then every month we have a dialogue with our supplier to fix areas that aren t performing. We keep a scorecard that is red, yellow, and green. It s very easy for me, as an operator, to look at a company and see how much red is on their report. 4 ZTE TECHNOLOGIES APR 2012

VIP Voice If there s a lot of red, that means they have missed the metrics three months in a row. If it is green, then everything is ok. If it is yellow, it means they may have missed one time and it may just be an anomaly. So I watch them for a couple of months, and if they keep missing and their report turns red, I then pick up the phone and say Why do you have trouble on this metric? Let s figure out together how to fix that particular area of concern. Then we can put a plan together and watch the performance again. So TL 9000 gives me an easy way of looking at all my suppliers, and I have scorecards on approximately 200 suppliers. From a supplier s perspective, it is a two-way dialogue for joint improvement because AT&T wants to buy more from the supplier and suppliers want to sell more to AT&T. We have a common way to focus on these objectives, and we create much better solutions if we can measure results. The TL 9000 standard gives me metrics An interview that I can apply immediately to all the processes between myself and a supplier. That improves performance. We are looking for ways to improve the base level of performance across the industry so that everybody in the industry is better off. I want each supplier to be successful, and one sure way to be successful is to improve product performance. You have less things going wrong. We have proven that those who are involved with TL 9000 perform better overall within the industry. So if you are involved with and apply these approaches, you will be much more competitive than your rivals down the street. That is another reason why AT&T stays involved because it wants to see the entire industry improve its performance. For ZTE, the challenge is that you have many companies that supply parts to you. You have to make sure those individual companies have very-high-quality processes that meet your requirements. TL 9000 gives you a way of measuring how well your suppliers are meeting your requirements. It s a very practical quality standard. The other thing that is important about this standard is that you can take a process end-to-end. So all the steps along the way, from the time an order is placed to the time you manufacture and ship it, can be measured. Now you have a golden thread all the way through the processes to improve overall performance. If I talk to you about something that isn t working right, you have a very quick way of going back to see where a process isn t functioning properly. Q: You are leading the QuEST Forum s strategic initiative called Measurements for Next Generation Networks. How is this initiative progressing? A: The purpose of this program goes back to one of my initial statements: This is a living standard; it isn t static. As the requirements from the customer base and the marketplace change, we need to make sure that the standards keep pace with the new requirements. The overall performance of a network used to be good if it was 99.9% reliable. Now if you are not at least 99.99% or even 99.999% then you are not competitive. That changed because expectations in the marketplace changed. Because of that, we have to go back and look at the TL 9000 metrics to make sure we can measure progress towards that. T h e n e x t ge n e r a t ion n e t wo r k metrics that I am heading up involves 25 companies around the world. The team is made up of service providers and suppliers. They are looking at LTE 4G networks, IP-based networks, and the software for managing these networks. APR 2012 ZTE TECHNOLOGIES 5

VIP Voice They are building on metrics that already exist in TL to make sure they incorporate what has changed in this next generation set of requirements. We just introduced the first five changes last year. There is a list of 20 to 25 additional changes that will go through the process this year. The team develops the changes; all the members within the QuEST Forum have the chance to provide input on those; and then we trial the proposed measures. The information from the trial is shared with all members. If the changes accomplish what we anticipated, then they are adopted. We are constantly looking at what else can be included: security, software performance, software updates, the introduction of hardware into the networks, and the performance of this hardware. What used to be on-time performance may not be good enough to measure the actual performance of a solution. We have to look not just at the hardware itself but the overall solution. We are constantly considering new approaches to improve service. Introducing metrics that keep pace with ou r i ndust r y involves constant dialogue. There is a similar effort underway looking at current performance and reliability of the entire network. Excellent network perfor mance is a result of overall planning, engineering, construction and maintenance and encompasses a much broader set of issues than only supplier issues. Companies involved with TL 9000 are developing measurements that will affect customers when outages or service degradation occurs, which is extremely important when combined with software solutions delivered via high-speed data connections. There s a new set of metrics used for measuring the overall effect of the network on customer experience. From this set of metrics, you can improve the level of performance of the actual network and improve UE. This is another example of why the QuEST Forum exists and is relevant. We are constantly looking at what we can do to improve the overall standard and how the metrics help improve particular areas. Q: What s the future direction of TL 9000? A: One thing we are learning is that each region has unique needs relative to what s important. Take China for example. The greater China hub, a set of core companies of which ZTE is a key member, is looking at the unique requirements within China for companies that supply products and services. The QuEST Forum, working with government groups in China, is moving in the direction of creating a national standard for TL 9000. The greater China hub has already said that in order for TL 9000 to make real progress, it has to be adopted by the government s standards accreditation t e a m. O n c e it i s a d o p t e d, ot h e r companies can begin to participate, and we will make further progress. We have been working with the appropriate government agencies for the past 12 to 18 months. We signed an agreement at the end of 2011 on how the standard would be introduced, monitored, and controlled. We are now moving forward with this work. The North American group has a focus on building performance smalland medium-sized businesses in order to help these businesses become more competitive and provide better products. I n E u r o p e, t h e f o c u s i s o n measurement. We are developing the right set of metrics to allow European operators to manage the introduction of new technologies. Different regions have different requirements. That may seem obvious, but you learn more as you are able to interact with various groups. Different areas in the world have different requirement s de pend i ng on what technology they are using at that point. That s part of what s going on right now. We re managing different requirements and needs within each region all built 6 ZTE TECHNOLOGIES APR 2012

VIP Voice on the same TL 9000. We hold best practices conferences each year. Each region has a different focus, and we hold three conferences across the globe. The last one was in Beijing in November 2011. It was a tremendous success. We bring in local companies that have implemented TL 9000 and talk about things that are working and things that aren t working so that other companies learn how to implement TL 9000. In April, we will hold a best practices conference in Delhi; we hold one in Madrid in June; and we will hold one in Chicago in September. There has been some confusion in the past about how TL 9000 relates to other quality standards. TL 9000 includes ISO 9001. If you obtain TL 9000 certification, you automatically obtain ISO 9001. If you obtain ISO 9001, you have to go a little bit further to obtain TL 9000. Companies also use other quality techniques and tools, such as Six Sigma and Lean, to help them manage specific issues. TL is a foundation, and then you can use other quality tools to improve specific areas within your quality programs. TL 9000 itself is a great building block, and the QuEST Forum manages it so that others can learn. We keep the standard fresh. It is a great opportunity for companies around the world to shape where the standard goes in the future. Q: What do you expect will be ZTE s contribution to the QuEST Forum in the future? A: ZTE is a founding member in China, and its contribution is expected to be very large. ZTE has been the co-chair of the QuEST Forum management team (greater China hub) since its inception and has been very active in getting TL 9000 adopted as a national standard. ZTE also sits on the executive board, which is made up of many companies around the world. So ZTE has great influence and is participating in a number of next generation metrics groups. The executive board agreed to pursue two initiatives a year ago. They intend to improve current metrics, and they intend to develop next-generation metrics. ZTE is participating in both of those initiatives and has been very involved in shaping where the standard has gone and where it is going. ZTE is also involved in the best practices conferences. ZTE has given tremendous presentations on the use of TL 9000. At the most recent conference, ZTE and Shanghai Telecom gave a joint presentation describing how they used TL 9000 together to introduce a new product. It was very well received and was one of the best presentations we ve seen on how two companies jointly use TL 9000 to improve a new service delivery. So ZTE and Shanghai Telecom are examples of the implementation of quality systems and how to do it right through the use of TL 9000. ZTE s influence has been tremendous, and ZTE has done excellent work in the QuEST Forum. Q: AT&T has cooperated with ZTE on several handset models. Could you give us some advice on improving handset quality? A: First of all, congratulations to ZTE on being in our lineup of handsets. It is very tough competition every year. I think this is our fourth year with ZTE handsets. Quality is very important for handsets. Our suppliers test their devices, then give it to us, and then we take it through an introductory testing process. If something surfaces when customers begin using the handset, it is important to quickly react. As managers change and people retire, you have to continually train the next manager to use the tools and techniques the previous manager used. You have to constantly educate your employees and management team so they are able to implement the latest and greatest quality improvements. There are ten handset companies in the world we do business with, and you are one of them. This is a good thing for ZTE, and it is supported by your TL 9000 quality performance levels. APR 2012 ZTE TECHNOLOGIES 7

VIP Voice Smartfren: Migrating for a Better Future Reporters: Liu Yang & Zhao Rujing Smart Telecom is an Indonesian cellula r telecom mu n icat ion provider that uses CDMA 2000 1X, EV-DO Rev A, and Rev B to service retail and corporate customers. Faced with increasing competition, Smart Telecom decided to join hands with Mobile 8 under a new brand, Smartfren. This merger required two platforms to be unified, and a converged business support system (BSS) and value added service (VAS) solution was used for this purpose. Replacing the old system and migrating existing Smart Telecom and M8 subscribers into a new platform was not an easy task. Close cooperation between ZTE and Smartfren ensured the original Smart Telecom system was migrated in only four months, and the Mobile 8 system was migrated in the following two months. ZSmart BSS and VAS system operates well, and the number of Smartfren data users is increasing quickly. The project has been such a success that 14 operators, including Gunadjaya Likito, Smartfren s chief information officer and purchasing manager for the BSS and VAS platform project 8 ZTE TECHNOLOGIES APR 2012

VIP Voice France Telecom and Vodafone, came to see the Smartfren system in operation. What were the biggest challenges in the project? What benefits have been brought to Smartfren? ZTE Technologies i n t e r v i e w e d G u n a d j a y a L i k i t o, Smartfren s chief information officer and purchasing manager for the BSS and VAS platform project, on January 10 in his Jakarta office. Jour nalist: In 2010, Smar t fren converged two networks owned by two operators. What were the biggest challenges and risks? How did Smartfren overcome them? Gunadjaya Likito: Since we began this project in June 2010, we have encountered many challenges and risks. First, there are distinct differences between the features and workf lows of Smart Telecom and M8. There was much work involved in ensuring that all the features of the old platforms were seamlessly migrated and that the migration was transparent and did not affect user experience. Any missing feature could have adversely affected the work of users and degraded service quality. We consulted end users of our platform to ensure all existing and desired features had been maintained. From the beginning, we made sure the ZTE team clearly understood the features of our platform. Second, there was no support from the legacy vendor. This lack of support makes the project very difficult and risky because the old system might not work properly in the case of a roll back. Fortunately, Smart Telecom and M8 personnel had very good knowledge of the old platform, and this knowledge was crucial when planning and implementing the migration. Consequently, there was no need for a roll back for either Smart Telecom or M8. Last, the deadline was very tight. Smart Telecom was under pressure to migrate the platform no later than by the end of October 2010. M8 also had little support from its network and platform provider. A delay in the migration could have caused Smart Telecom to come under undue pressure from its old vendors. The project was very tightly managed, from management down to working team. All Smart Telecom, M8 and ZTE personnel spent long work hours maximizing productivity and ensuring each target date was met. Journalist: What are the technological highlights of ZSmart BSS and VAS system? Gunadjaya Likito: ZSmart BSS and VAS system is a converged charging and billing platform for voice, data and VAS. The platform supports converged billing for both prepaid and postpaid, and this enables us to flexibly switch between prepaid and postpaid payment methods. The new system provides unified customer view, and tariff and business data management. The system also is powerful for analyzing customer use and charging, so we can monitor ongoing business from different angles. The system is also highly available. We deployed the ZSmart BSS and VAS system at three sites, two of which are redundant. This unique design ensures the stability and continuity of service. Journalist: What benefit has the converged platform brought to Smartfren? How has ZTE strengthened Smartfren s competitive edge? Gunadjaya Likito: By converging two platforms, system capacity is used more efficiently. There is no need to provide twice the redundancy or spare capacity. This is a more cost-effective solution than having two separate platforms. It is easier to operate and maintain a APR 2012 ZTE TECHNOLOGIES 9

VIP Voice single platform, and there is no need to have separate teams maintaining the old platforms. The teams can be merged, and this enables more focused operation and management of the platform. Furthermore, by unifying Smart Telecom and M8 services and features, a single brand can be easily realized. We can conveniently design merged products and cross offers. Merging leads to stronger Smartfren brand recognition and loyalty. Journalist: How are your value-added services developing? Gunadjaya Likito: Existing VASs have been enhanced by the new platform. We have greater flexibility in product offering. It s easy for us to design cross selling and up selling. Thus, the customer experience is enhanced. The platform is also open to new services, and we rely on ZTE to present to us new VAS innovations that can be used by Smartfren to widen our offerings and increase our competitive edge. Journalist: How do you rate ZTE s project team? Can you give us a specific example that highlights strength of ZTE s project team? Gunadjaya Likito: Overall my rating for the project team is good. The ZTE team is generally very willing to learn and is open to suggestions from the customer. This leads to a more harmonious working relationship between Smartfren and ZTE. Most of the ZTE project team exhibited a high level of commitment to meet the deadlines, and on many occasions, they worked very long hours. They are very flexible and supportive of any changes prompted by changing strategy and market conditions. Afterword Gunadjaya Likito has many years of experience in IT operation. He works in the IT center in BSD City, which is an hour from Jakarta. He shows the rigor of a technical manager when he explained the network figures to us in detail. In a project that was full of technical challenges and needed to be completed in such a short timeframe, both parties spared no effort. He was impressed with ZTE s 200 strong team, who were sent to Jakarta for the implementation and worked throughout the holiday. From June to December 2010, ZTE and Smartfren had daily and weekly meetings to assess the project s progress. Any problem that couldn t be solved in these meetings was brought before the top management of Smartfren. Gunadjaya Likito himself usually works from 8 am in the morning to 8 pm at night. He told us that the window for maintenance is usually between 1 am to 2 am in the early morning, so he had to work very late. But it is fine, he said, as if he had become used to such hard work. He stayed overnight in the IT center when the old system was cut over to the new one. A successful project requires a good solution, but also hard work and thorough communication. In 2012, Gunadjaya Likito wants to strengthen operational monitoring to optimize workflow. 10 ZTE TECHNOLOGIES APR 2012

Tech Forum Evolving from Internet to IDN By Zhang Chaofeng & Wu Qiang The advanced research projects agency net work (A R PA net) developed by the US Department of Defense was the world s first Internet. Today, it uses TCP/IP to connect a large number of computers and networks. The main design concept of ARPAnet and TCP/IP is to establish a network without a core so that when one part of the network fails, the remaining part can automatically choose an alternative route to ensure smooth connection. TCP/IP also supports interconnection of heterogeneous networks. The Internet now not only encompasses conventional wired computer networks, it also extends to mobile telecom networks. The booming number of applications is a great challenge to the Internet in terms of mobility. Internet and TCP/IP architecture was originally designed at a time when there were no mobile networks. Mobility of IP terminals is now a great challenge for upper-layer services. The root of mobility issues is the dual role of an IP address; it is both the identifier and locator of an IP terminal. A telephone number in a PSTN is only the subscriber s identifier. security. In the early years of Internet growth, there were few malevolent users who attacked network devices. Therefore, there was not much importance attached to network security. Unlike the Internet, PSTN available to public access is well protected against malicious attacks. proliferation of routing capacity. ARPAnet designers never envisioned the Internet would grow into what it is today, nor did they expect that the bulky routing table would become a huge burden to router CPUs. Only when these challenges have been resolved can Internet be a greater success. Zhang Chaofeng, chief engineer of ZTE Data R&D Center Wu Qiang, chief product planning engineer of ZTE C e n t r a l R & D Institute APR 2012 ZTE TECHNOLOGIES 11

Tech Forum Host 1 Host 1 Moves Host 1 BG 1 BG 2 Authentication Center An identifier network (IDN) is one of the best systems to meet these challenges. Mobility PSTN uses a telephone number as a subscriber identifier. Various telecom services and billing systems differentiate subscribers according to their telephone numbers. A telephone number is only a logical identifier of a subscriber, and a physical port number on the subscriber line board is actually the physical location of the subscriber. An OAM staff member associates the physical port number with the telephone number and stores it in the database. During service deployment, the infrastructure network completes service addressing. The infrastructure network can find a subscriber s physical location by using his telephone number or search a subscriber s telephone number using his physical location. Therefore, in principle, a subscriber s telephone number is portable when he moves to another place or changes to another operator. However, an IP add ress in the Internet and TCP/IP architecture serves dual roles. It can be used as an identifier to address a specific host or as a locator to specify a user location. When moving to another place or another network Backbone Router Mapping Server Figure 1. IDN architecture. BG 3 Host 2 Host 3 segment, a user must change the IP address to a new one. It is therefore necessary to re-establish the TCP and UDP paths based on the source and destination IP addresses as well as the source and destination port numbers. All services carried over TCP and UDP are interrupted during the change of IP addresses. Services that identify subscribers with IP addresses are interrupted and need to be redelivered. C u r r e n t l y, t h e r e a r e s o m e technologies, including mobile IP, that can remedy defects in Internet mobility; however, these technologies cannot be widely deployed because they have minor improvements and bring about a new problem called triangle routing. IDN, however, is considered a breakthrough in Internet mobility. The basic concept of IDN is to separate the user identifier from the locator. A user or host is assigned two roles: identifier and locator. The identifier does not change as the host moves to a different location. The locator changes as the host moves, but it is only used for network addressing instead of identifying the host or user. Services on the TCP path, UDP path, and network all use the identifier and are not affected by the host changing location. When a host with an identifier accesses the network, related access devices assign a correct locator to the host and associate the locator with the identifier. N e t wo r k e l e m e n t s ( N E s) a r e logically divided into hosts, mapping server, and border gateways (BGs). Hosts can be identified by identifiers or locators. Identifiers are used to identify communication peers for end-to-end communication, and locators are used to identify current host locations for packet-forward routing. To maintain compatibility with the Internet, both host and mapping identifiers use IPv4 or IPv6. The mapping server stores mapping relationships between host identifiers and locators. The identifiers remain unchanged as host subscription information. BGs assign locators to hosts based on their locations. Working in collaboration with the mapping server, BGs update in realtime the mapping relationships between host identifiers and locators stored in the mapping server. When host 1 sends a communication request to host 2, BG 1 looks up the locator of host 2 in the mapping server based on the identifier of host 2 and stores the lookup result into its mappingroute table. BG 1 updates the identifier/ locator mapping information of host 2 in real-time and uses the mappingroute table for packet encapsulation, r o u t i n g, a n d f o r w a r d i n g. A f t e r receiving encapsulated packets from BG 1, BG 3 decapsulates them and sends the decapsulated locators to a communication peer. When a host changes its location, a BG registers its new location on the mapping server and notifies the communication peer so that they can communicate using the new locator. 12 ZTE TECHNOLOGIES APR 2012

Tech Forum Security Security threats also pose a great challenge to Internet growth. Network security involves device security and information traceability. T he cu r rent I nter net does not technically separate the service layer from the bearer layer. The bearer layer is available to public access and therefore is vulnerable to malicious attacks such as network password theft and network saturation attack against protocol ports. PSTN, however, separates users from the bearer layer and makes bearer entities, such as trunk lines and signaling networks, inaccessible to telephone users. Similar to PSTN, IDN roots out the possibility for common users to attack network devices by separating users from the bearer layer. Common users cannot have peer-to-peer IP communications with core network devices nor obtain their IP addresses by tracing routes. Because of the lack of a unified Internet identifier management system and the constant changes of managedobject identifiers, security management measures are passive and lagging behind the Internet s growth. Adopting dynamic address allocation or a private network with NAT because of IP address shor tage in the IPv4 environment makes it difficult to trace security events. However, IPv6 can assign a fixed identifier to each host. This helps improve network information credibility. Leveraging openness, simplicity, and information sharing, IPv6 is expected to establish a sound security guarantee system that can authenticate and trace network information, improve accuracy and real-time network management, and implement reliable, integrated management of networks, services, and users. Growth of the Internet calls for a unified identifier management system to separate identifiers from locators so that Internet infrastructure can better support service correlation, enhance network security, and isolate networks from applications. Proliferation of Routing Capacity With the increasing number of network users and autonomous systems, the number of IPv4 routes has reached 300,000. Although IPv6 can expand IP address space, the cause for routing table expansion has not yet changed fundamentally, and routing tables will continue to grow. According to real-time network statistics, the convergence time of border gateway protocol lasts for 15 minutes during the route update because of routing table expansion. A lot of packet loss and routing oscillations occur before the convergence. An oversized routing table results in a heavy load on routers, decreases convergence speed of the backbone router, and increases convergence frequency. Because of these, the network is unstable. In IDN, a host identifier is not used for addressing in the core network and is unavailable to other devices except border gateways. The subnet route where the identifier is located is not listed in the routing table. Location information is used for addressing. The location information is only correlated with a limited number of border gateways, so the number of routing tables in IDN is at least three orders of magnitude less than that in the Internet. With the development of 3G and 4G, a network can deliver data rates up to a few or even tens of megabits per second to a single wireless user. Mobile services are becoming the biggest driver of Internet growth, and mobile networks are evolving from mobile access networks to mobile Internet. IDN that accommodates mobile Internet demands will further fuel the evolution. Feature-rich services and hundreds of millions of existing terminals are valuable for booming Internet growth and also a major focus of innovative technical solutions. IDN can be widely applied in different scenarios because it accommodates the constraints of the Internet at different evolutionary stages, supports interoperation and coexistence with existing mainstream technologies, and allows smooth evolution. IPv6 and LTE will dramatically change Internet user groups and applications and will enhance mobile Internet. This is also an unprecedented opportunity for IDN. APR 2012 ZTE TECHNOLOGIES 13

Special Topic: Mobile Internet 14 ZTE TECHNOLOGIES APR 2012

Special Topic: Mobile Internet Trends in Mobile Internet Business By Li Jun Li Jun, chief engineer of ZTE s Internet business As 3G networks develop and smartphones become more popular, mobile Internet is gaining more momentum than PC Internet. Mobile Internet has brought about new mobile experiences, allowing people to check email, surf the web, stream videos, and post to social networking sites anywhere and at any time. Mobile Internet has penetrated into daily life and greatly changed the way we work and live. Internet business operation has completely changed. Mobile Internet is neither a simple duplicate of PC Internet nor a collection of webbased value-added mobile services. Diverse user demands have raised higher requirements on mobile Internet business operation. User Experience M o b i l e I n t e r n e t i s o p e n a n d collaborative, like PC Internet, but it also inherits the realtime, privacy, convenience, and location features o f m o b i l e n e t w o r k s. I n m o b i l e Internet business, there are three main characteristics of user experience: Socialization. People demand Internet applications that go beyond simple information searching. They want interaction and participation, not just passivity. Socialization is an inevitable trend in mobile Internet business. In recent years, microblogging has become popular in China. It is the trendiest social networking model for Chinese netizens. SNS brings users together around shared interests such as music, sports, movies and business. Microblogs are changing people s social relationships. Localization. People can connect with others around them and can also keep abreast of news and information that is closely related to their daily lives. Websites such as Dianping, Groupon and OnCity have become popular because they cater to the needs of local people and retain them with local services. A person living in Nanjing can find out about sight-seeing, food, clothes, houses and transport in the city and can make local friends. Personalization. The core competitive advantage of mobile Internet is personalization. It is easy to offer personal services through mobile Internet. People s need for customized services can be easily known and satisfied. These three main characteristics need to be taken into consideration when creating outstanding mobile applications. ZTE s mobile reader and e-game solutions are developed around these characteristics. Browsers and Apps Coexist In 2009, Apple launched its AppStore with hundreds of thousands feature-rich applications. The newest and most fun applications are current hot topics among both Apple and Android users. However, only about ten apps are commonly used. Therefore, apps do not mean everything to mobile Internet. Browsers were once dominant in the APR 2012 ZTE TECHNOLOGIES 15

Special Topic: Mobile Internet early age of PC Internet, and there were quite few apps at that time. However, in the second stage of PC Internet development, clients became important. From 2004 to 2007, people had to install many software programs on a new PC. They returned to using a browser to access data after 2007, when main application browsers were supported. Video and in-game web browsers have found favor with users in recent years because special clients do not need to be installed. Today, mobile Internet is in a stage similar to the second stage of PC Internet, where there is an upsurge in the number of apps. In the PC Internet era, browsers were the gateway for users to access the Internet. Many functions and applications could be accessed through browsers. In the wireless era, Apple has defined apps as the gateway to mobile Internet. These mobile apps give a different experience because mobile phones may be based on different operating platforms. To ensure consistent UE, a cross-platform application model has to be found for these apps. Middleware, VAC, and web widgets have arisen as a result. These have evolved in a way similar to that of browsers. HTML5 makes browsers as powerful and useful as mobile apps. As phones and browsers become more powerful, browsers and apps will coexist to meet diverse needs. Facebook has planned to build its own web app system. It is reported that Facebook is secretly working on Project Spartan, based on HTML5, in order to get rid of the restrictions of Apple s AppStore. ZTE has also been developing crossplatform applications. ZTE has worked out a solution for a unified client software platform and will further develop the browser-based application mode. Innovation is the Key to Success The rapid growth of mobile Internet has blurred the boundary between the upstream and downstream industry chain and has impacted the telecom business. Terminal vendors are transforming into content providers and virtual network operators, and Internet companies are expanding their roles as network operators and terminal vendors. Fierce market competition puts network operators at a disadvantage. Terminal vendors and Internet companies have adopted new business models that affect operator services such as voice and SMS. An innovative business model is the key to success. Relying on the traffic-based forward charging model, traditional telecom operators reaped huge profits from SMS and WAP. The backward charging model of search engine and advertising used by Internet companies has also proven to be a great success. What are successful business models in the mobile Internet era? Apple s iphone AppStore is a successful business model. iphone has been leading the smartphone market since its launch in June 2007. The success of iphone can be attributed to its innovative business model as well as cutting-edge multiservice integrated design and unique UE. Apple always partners with the largest local mobile operator to bundle its iphone packages. The mobile operator is the exclusive local distributor of iphone, and Apple gets a pre-agreed percentage of the revenue brought in by iphone. With this revenue-sharing business model, Apple excludes other competitors in the market. With its online itunes app stores, Apple is changing rules in the mobile marketplace with a new revenue sharing model of user generated content (UGC) and user generated applications (UGA). Apple s successful iphone business model is a paradigm for mobile terminal vendors to establish themselves in mobile services, and its unique itunes ecosystem is a reference for mobile operators. ZTE is now developing China Unicom s mobile reading base and WoStore application stores. ZTE is also developing China Telecom s e-surfing factory and Jiangsu Telecom s gaming services. Innovative business models are being used in these projects to push forward the development of mobile Internet. Although the mobile Internet has not been fully developed, in the future, any service will be possible through mobile Internet and it will become the most convenient and widely used gateway in the information era. Innovation is the driving force for advancement in mobile Internet services. Faced with a promising mobile Internet market, ZTE needs to keep innovating to provide valuable application services for clients and to satisfy increasing user demands. 16 ZTE TECHNOLOGIES APR 2012

Special Topic: Mobile Internet Opening Network Capabilities in the Mobile Internet Age By Yao Yuan Openness and cooperation in mobile Internet is the consensus of leading telecom vendors worldwide. Google, a pioneer in opening network capabilities, has opened its Android mobile phone platform, App Engine cloud computing platform, and application programming interfaces (API) such as search, map and Opensocial. F a c e b o o k b u i l d s i t s c l o s e d S N S applications into an open social network platform and turns its huge volume of website traffic into operating revenue. Since China s leading social network site, Renren, launched its open platform, Tencent, Sina, Baidu, Alibaba and 360 have all launched open platforms. Major telecom operators are following suit by devising openness strategies to seize the mobile Internet market. The upsurge in open platforms has led to an explosive increase in the number of APIs. The number of APIs in 2005 was only 105; however, only six years later, it is 3940. Developers seem unsatisfied with current fast-developing open platforms. Openness is not merely a slogan, a concept, or even an attitude. The aim of openness is to create profit for every party involved. Opening network capabilities to create win-win situations is the best policy. Resources Developers Most Need to Open Successful platform openness needs a business ecology that profits operators, developers, and content providers. In recent years, operators have opened their traditional SMS, MMS, WAP and voice capabilities, but this has not aroused much interest from developers. To attract developers, operators should know first what developers need most. French consultancy company, Moriana, have found that billing and charging, location, and user profile data are the most important capabilities for developers. Similarly, a survey on the open Taobao platform shows that the most popular APIs are stores and shops, transaction, logistics, products, charging, and user rating. Therefore, to create a successful open platform, operators need to break away from traditional means of opening telecom capabilities; they need to open capabilities from a service perspective rather than from a capability engine perspective. Advantageous Resources Operators Can Open Opening network capabilities doesn t mean a blue ocean opportunity for operators. It is far from enough for operators to follow the business mode of Internet companies. Operators have to seek their own advantages. They can focus on four resources to form their own core competencies: User resources. In this area, operators APR 2012 ZTE TECHNOLOGIES 17

Special Topic: Mobile Internet Service Development Environment Service Test Environment Capability Programming Developer Portal CT Capability Engine SSP/MSC/CSCF Figure 1. Architecture of ZTE s open network platform. have an advantage over Internet companies. User profile data obtained by operators is true and reliable. This user profile data, analyzed by professional data analysis systems, is of interest to developers. Network resources. Operators have telecom and IT capabilities that Internet companies do not have. Developers can use these capabilities in services to enhance product innovation. Billing and charging resources. Billing and charging systems that operators provide are often accurate, flexible and secure. Most operators have obtained a payment license, so developers can use the billing systems of operators to charge users and directly settle their accounts with the operator. Infrastructure resources. Operators Portal Service Execution Environment Execution Engine Service Container Resource Convergence Gateway SOAP/REST Service Bus CT Capability Adaptation Rule Engine Other Capability Adaptation Other Capability Engine IT Capability Workflow Engine Management Portal Internet Capability Service Data Management User Management Resource Management Subscription Management Data Synchronization & Configuration Management Log Statistics / Settlement Management have ICT infrastructure that can provide developers with application tests, deployments and managed services. Operators can open their resources by providing standard interfaces so that third-parties can call up relevant resources. This lowers the threshold for developers to create smooth, impressive applications. Operators can also provide open platforms for developers to replace or trade their own resources. Through open platforms, operators can provide developers with one-stop services for development, testing, deployment, and release. ZTE s Open Network Platform Solution ZTE s open network platform solution is designed to converge mobile network and Internet resources in order to build an open platform for applications and to create a complete mobile Internet industry chain for operators, application developers, capability providers, and advertisers. ZTE s solution provides simple endto-end services for developers, operators, and capability providers. It provides access to telecom networks and Internet. It screens lower-layer protocols, lowers the development threshold, and opens capabilities in a unified way. It provides developers and partners with one-stop development, testing, deployment, and release services. It provides public and enterprise users with fast access, triple-screen experience, and customized services. The open platform attracts and retains users. It is an incubation base that provides a variety of innovative applications for front-end sales platforms. I t p r o v i d e s d e v e l o p e r s w i t h materials and tools (SDK) as well as environments for service development, test and execution. It provides developers with a community network for technical exchange, experience sharing, and Q&A. Developers can release their creative ideas or submit applications. T h e y c a n a l s o g e t t h e l a t e s t development materials and tools, and evaluate and recommend them. ZTE has supplied open network platforms for leading operators around the world, including France Telecom, SFR, Telenor, China Mobile, China Telecom and China Unicom. Opening capabilities for win-win cooperation is coming true in the age of mobile Internet. ZTE is well positioned to work with all partners in the industry towards a successful future. 18 ZTE TECHNOLOGIES APR 2012

Special Topic: Mobile Internet Digital Office Creating a Digital World By Zhang Rong Digital office applications include digital printing, PCs, digital telephones, video communication, email, IM-based work discussions, and file transfer. Through the IP network, office devices are connected to create a digital world. Digital office is centered on the IP network and integrates digital office facilities, communications, and remote access to create an integrated digital office environment. It facilitates communications and office work of enterprises and governments. Telecom operators often rent their digital office systems to medium- or small-sized governments and enterprises. Large-sized governments and enterprises, especially transnational companies, build large digital office systems by themselves. AT&T is the world s largest telecom operator and has rolled four digital office solutions for enterprises and governments: For enterprises with less than 100 employees, AT&T offers the best long-distance, high-speed Internet, phone, data, and bundled services to help these businesses grow. For enterprises with more than 100 employees, AT&T offers network services as a foundation for applications. They offer efficiencies through cloud, content delivery, application and mobility services, and collaboration through unified communications. For buyers of wholesale services, AT&T offers reliable and highly secure APR 2012 ZTE TECHNOLOGIES 19

Special Topic: Mobile Internet end-to-end networks as well as IP and cloud-based services globally to meet the needs of wholesale customers. For government agencies, AT&T offers networking, mobility, unified communications, and cloud and managed IT solutions that are customized for federal, state and local government agencies. Turk Telekom (TT), India Reliance, and China Mobile have also come up with their digital office solutions. These solutions create efficient, convenient and comfortable office environments for enterprises and governments, and bring a myriad of business opportunities to operators. ZTE s digital office solution aims to drive technological advancement and improve enterprise efficiency. It includes SIP phone (IP phone), video phone, PC, wireless handset and set top box (STB) at the terminal side, and NGN/IMS and SIP Phone Video Phone Company 1 ZXUN SSS ZXUN HSS PC SBC IP Network SIP Phone Video Phone Company 2 Figure 1. Digital office (IMS architecture). SoftDA management platform at the infrastructure side. An IPTV platform and a video conferencing platform can be added to deliver multimedia information and office meeting services. Conference centers are provided for enterprises and governments, and multimedia information and entertainment services are provided for employees. ZTE s digital office solution allows office work to be better integrated. It delivers fast and convenient applications to enterprises. The digital office solution contains three functional modules: communication module, conference module and multimedia module. Communication Module The solution provides three service packages: ordinary office service, midlevel manager office services, and executive office service. It can satisfy ZXUN CSCF SBC PC SBC MGCF IM-MGW SIP Phone Video Phone Company N SoftDA Managing Platform IPTV/VCS Platform PC user needs at different levels. Ordinary office service Staff use a PC configured with IM software, a SIP telephone, and a P801K UW101 (a USB base and a wireless handset) for conference calls. They can also chat, share files and desktop (electronic whiteboard), and transfer files. Scenario 1: A staff member communicates with another person over SIP under an IMS/NGN network. The communication can be made between PCs, between a PC and an IP phone, or between a PC and a mobile phone. The staff member can also make a conference call using IM. When making or receiving the call with a P801K UW101, the staff member can move freely within 50 meters without adversely affecting voice quality. Scenario 2: Internal staff members chat with each other or with external staff via IM. The communication is fast, free, and helps reduce office costs. Scenario 3: A staff member transfers large files to staff in other department via IM. The transfer is fast and alleviates the traffic burden on the mail server. Scenario 4: A hardware or software developer works efficiently through file and desktop sharing. Mid-level manager office service A mid-level manager uses an IP phone and an IM-enabled PC to hold an office conference using the IMS/NGN network. Communication can occur either between IP phones, between IP phones and PCs, or between IP phones and mobile phones. A multiparty meeting can be held using IM, or a party can attend the meeting using an IP phone. 20 ZTE TECHNOLOGIES APR 2012

Special Topic: Mobile Internet NGN SIP Phone Video Phone PC SBC SIP Phone IP Network Video Phone Company 1 Company 2 Through IM, the manager can also chat, share files and desktop (electronic whiteboard), and transfer files. Scenario 1: multiple numbers People in an office share one P801 handset, each having a separate phone number. Alternatively, each person has a P801, and phone numbers are divided into work numbers and non-work numbers. Each person uses their phone number to make an outgoing call. A total of six incoming calls can be received. Scenario 2: call mute function Several people may use one P801 to access a conference. However, they may wish to have private discussions and not be heard by participants in other locations. The P801 users can press the mute button without actually muting the P801 speaker to other P801 users. Everyone in front of P801 can hear the speaker, but their internal discussions cannot be heard by participants in other locations. Scenario 3: multiparty conference P801 is used to make a local conference call through the network. A manager initiates a conference via IM to discuss sales. The manager can answer a call using an IP phone or a USB handset. SBC PC SIP Phone Figure 2. Digital office (NGN architecture). SoftDA Managing Platform IPTV/VCS Platform SBC Video Phone Company N The USB handset allows the manager to walk freely around the office while talking during the meeting. Executive office service A high-level executive uses a video phone, an IM-enabled PC, and a P801K UW101 to hold a video conference. If necessary, an IPTV STB can be configured in the office to deliver advertisements and IPTV services. The executive can also chat, share files and desktop (electronic whiteboard), and transfer files through IM (SoftDA). Scenario 1: point-to-point video call A V510 video phone is used to call another V510 directly via an IP address or an IMS/NGN network. V510 faithfully recreates the original sound with its robust microphones and speaker and accentuates the human voice through software adjustment to make the voice clearer. Scenario 2: three-party conference A V510 is used to dial video phone numbers of second and third parties via an IMS system. Voices from the three parties can be mixed locally to implement third-party conference. Scenario 3: photo, video, and audio play PC V510 can play photos, videos, and audio in an SD card. Scenario 4: attending a video conference V510 can act as a video conference terminal to access a video conference system. Scenario 5: communication and data application synchronization An executive can initiate a meeting with mid-level managers using a PC configured with IM software and a P801K UW101. The executive can move freely within 50 meters while receiving the conference call. The executive can also share files and content, send texts, and transfer files through PC with other participants during the conference. Conference Module A video conference system can be built to meet conference needs of transnational enterprises and government agencies at all levels. Application scenario: A video conference system is built to serve a group or a transnational group. Regular or irregular meetings can be held to discuss marketing strategies and project management. Multimedia Module In meeting rooms or along corridors, IPTV STBs can be deployed to push advertisements or deliver value-added services such as live IPTV, VOD, interactive games, and news. Application scenario: Employees can browse news, weather, culture, travel, cinema, and TV in the meeting rooms or along corridors in their leisure time. Digital technologies propel us to create a highly efficient digital world. APR 2012 ZTE TECHNOLOGIES 21

Special Topic: Mobile Internet Social TV Is Entering Households By He Kang Social television is a general term for technology that supports communication and interaction in the context of watching television, or related to TV content. It also includes the study of television-related social behavior. Simply put, social TV allows subscribers to engage in TV-related social networking such as communicating and interacting with others while watching TV. Social TV doesn t just support social networking websites, it is also supports social networking through other technologies and platforms. In the era of Web 2.0, the purpose of social TV can be summed up as enabling subscribers in different places to share and discuss TV programs conveniently using social networking tools. For example, subscribers can discuss popular TV dramas, celebrate goals during a live sports match, and alert each other to certain programs. Social TV is a new term whose meaning is still not clearly defined. Social TV is more of a software concept than a hardware one. Subscribers need software to communicate with each other. A social TV network has the potential to grow into a large-scale platform that integrates a wide range of applications, such as instant messaging, content searching, TV program recommendation and ranking, and video conferencing. The platform is open and allows third parties to develop new applications and share profit. The large-scale social TV system designed by ZTE is based on existing IPTV and converges TV, PC and mobile phone screens. It is a portal to services such as social networking, entertainment, and recreational activities on a single website. The system helps improve user experience and customer retention rate. Features a high degree of convergence. The system integrates most applications and services sought after by the majority of customers. These include motion sensing games, online games, online reading, chat rooms, emailing, instant messaging, RSS, blogging, online data storage and third party communities. It is a highway to the virtual world, providing access to all sorts of information and experiences. different access methods. Different access methods include WEB, WAP, mobile client and IPTV, and subscribers can access the system conveniently. No matter what access method is used, the interfaces of the access devices can be personalized with consistent style. powerful search engine. The system s powerful search engine allows subscribers to search information quickly and with precision. By using the inverse order indexing technique and a highly efficient data update check mechanism, the system maintains and processes the index for changed data with high efficiency. This provides high-quality search 22 ZTE TECHNOLOGIES APR 2012

Special Topic: Mobile Internet services for various applications. The system also supports flexible word library processing. enhanced user experience. The system allows IPTV operators to improve user experience by providing valueadded services. By encouraging more communication between TV viewers and facilitating interaction between broadcasters and audience, social TV will greatly improve program ratings. By integrating applications and services, social TV offers a brand new user experience of TV. Business Model 1 Fusion of the three networks for instant messaging Working with TVMS system, social TV enables messages to be displayed in the form of scrolling and static subtitles on the interfaces of the subscriber message releasing system. Using an SMS gateway, the system can push messages to mobile phones defined by users. With a platform that fuses cable TV, the telecommunication network, and the Internet, the system can push messages to PCs and handheld devices, making it convenient for subscribers to view messages anytime anywhere. Abundant user applications With social TV, subscribers can purchase products, book tickets, and pay fees. Equipped with a touch screen, each TV set allows the subscriber to find locations and routes conveniently on online e-maps such as Google Maps. The system also advertises nearby supermarkets, provides traffic information, gives weather forecasts, local and community news and notices. Business Model 2 Third-party (government, businesses) information releasing Browsing Programs IPTV Booking Movies Third parties such as government agencies and businesses can use social TV system to release information to subscribers. The information releasing subsystem can obtain content such as weather forecast and RSS news from internet and publish them in the TV system. Online survey by third-party survey organizations The information releasing subsystem also provides online voting and quizzing service. Third-party survey organizations can distribute questionnaires to subscribers to get feedback. Interactive forum Using terminal devices such as remote controller, PC and mobile phone, subscribers can post topics and questions on the forum of the information releasing subsystem. The answers to the questions can be sent to the terminal devices in user-customized manners. Wide range of application The social TV system can be installed in residential complexes, Fusion Video Platform 3G SMS Notification of TV Program My Friends Share Film Information Figure 1. Fusion of the three networks for instant messaging. Candy large hotels, airports and subway stations and cater to the needs of different users. It can also be used as an effective tool for education and training, and serving as information infrastructure in rural areas. Conclusion Social TV puts more emphasis on social networking. It is more like a social networking website attached to cable TV system. Activities such as TV viewing, social networking, interacting are carried out by the basic devices TV set and set-top box. Social TV provides a wide range of value-added services and applications such as viewing TV programs on multiple devices, time-shifting TV, Karaoke, TV photo book, household security, video call, intelligent home, TV shopping, TV payment, bringing great convenience to subscribers. Moreover, social TV can help operators upgrade their IPTV service and provide full services to subscribers by further fusing the cable TV network, telecommunication network, and Internet. Lucy Peter Fred Mary Gary Alice APR 2012 ZTE TECHNOLOGIES 23

Success Stories H3G Austria s Mobile Network Excels in Third-Party Testing By Cao Qingwei & Chen Yizai We are fully geared to make this project a great success and improve our network quality on a constant basis. We value ZTE as our most competitive network partner here in Austria, said Matthias Baldermann, CTO of H3G Austria. At t h e e n d o f N o v e m b e r 2 0 11, E u r o p e s l a r g e s t t e l e c o m m u n i c a t i o n s publication, Connect, organized formal tests on the mobile networks of eleven operators. These operators included Telekom, Vodafone, O2 and E-plus in Germany; Swisscom, Orange and Sunrise in Switzerland; and H3G, AT-Mobile and Orange in Austria. Download speed, upload speed, and user experience were tested. In the download speed test, H3G Austria s average rate across the network was 9 Mb/s, better than that of the second-fastest network. H3G Austria was not only the fastest network, it also achieved a score of 476 out of a possible 500 in customer evaluations of overall network performance, said Connect editor Bernd Theiss. H3G Aust r ia is a f ully ow ned s u b s i d i a r y o f H u t c h i s o n 3 G, a multinational mobile service provider that operates in several countries. In March 2010, H3G Austria chose ZTE as its partner to deploy a high-performance, future-proof mobile broadband network. ZTE was asked to swap 4080 base station sites and reconstruct transmission and core networks by the end of 2011. It was also asked provide six years of managed services. ZTE s industry-leading SDR base stations were used for HSPA+ services. In February 2011, H3G Austria launched its DC-HSPA+ network with download speeds of up to 42 Mb/s. H3G Austria commercialized its LTE network in November 2011. The LTE network is built on ZTE s latest Uni-RAN and Uni- Core solutions, which help H3G Austria make full use of existing equipment and save CAPEX. ZTE s professional O&M solution ensures efficient engineering and O&M work as well as smooth migration from 2G to 3G and 4G. ZTE s managed services include corrective maintenance, preventive maintenance, change management, Figure 1. H3G mobile network ranked first in the Connect network test 2011. 24 ZTE TECHNOLOGIES APR 2012

Success Stories spare parts management, performance m a n a g e m e n t, c o n f i g u r a t i o n management, quality management, and expert technical support. The swapover of H3G s base station sites involved replacing large amounts of third-party base stations and reusing existing auxiliary devices such as power supplies, towers, air conditioners, shelters, relay nodes, SDH hubsites and microwave equipment. Maintaining this diverse equipment is a great challenge. To ensure high stability, high security, and high availability for H3G Austria s mobile network, ZTE outlined seven key points for network O&M: Respect local culture and leverage the advantages of local employees in communicating with clients and managing local contractors. Assign important roles to local employees in project management, and ensure local employees account for 90 percent of a project team. Outsource some O&M work to original H3G maintenance staff. This alleviates the difficulty of maintaining third-party infrastructure before they are swapped over and allows original maintenance personnel to remain employed. Partner with competent contractors who can maintain devices from different manufacturers. They can jointly cope with the risks in maintaining third-party devices and existing network equipment. Adopt the best and most widely accepted O&M practices, such as etom and ITIL, to ensure standard and professional O&M. Attach great importance to training ZTE O&M personnel, local contractors and H3G O&M personnel and improve their project execution skills. Make network O&M processes transparent, manageable, and controllable based on quantifiable data. Adopt a customized O&M scheme to implement resource integration and smooth migration from 2G to 3G. Before the swapover of base station sites, only about 80 percent of H3G s SLA conditions were being met. Since ZTE swapped the network and took over O&M, monthly fulfillment of SLA has been above 99%. After one year of professional O&M by ZTE, network KPIs have significantly improved. Download speed has increased from 1.8 Mb/s to 42 Mb/s or even 100 Mb/s in some areas. The subscriber base has increased from 600,000 to 1 million and is expected to reach 6.5 million by the end of 2015. The volume of network traffic has grown from 8G to 13.2G, an increase of 70 percent. The call accessibility rate has reached 98 percent, and the PDP activation rate has reached 99.5 percent. As a result, customer satisfaction has been substantially improved. The cutting-edge mobile broadband network jointly built by H3G Austria and ZTE is now delivering a variety of feature-rich services to subscribers across the whole of Austria. H3G Austria is reaping profits from the new mobile broadband network. Its success has proved that in the era of mobile broadband, where user experience matters the most, a stable, high-speed mobile network is the key for operators to get a head start on the competition, reduce CAPEX, and improve profit margin. APR 2012 ZTE TECHNOLOGIES 25

Success Stories Indonesia s Sinar Mas Group Heads Towards a New IP Era By Liang Yulong Challenges An increasing number of users as a result of network convergence An increasing number of highspeed mobile data services and multimedia services Dual-network convergence and optimization requirements for service development in the coming five years Unsatisfactory capacity and performance of the network export router Solutions Replace the Internet router with ZXR10 T8000 cluster router to enhance performance by fourfold Adopt 40G wire-speed slots (100G ready), which can be upgraded to 400G Adopt a multi-chassis system as a final solution to the network expansion problem Add an Internet local address of other site to absorb a part of traffic and to ensure stable network breakout Benefits E x p a n d n e t w o r k c a p a c i t y severalfold to facilitate business development Implement protective measures to ensure network security and reliability H a v e l a rg e c a p a c i t y, h i g h p e r f o r m a n c e, a n d s m o o t h upgrading to meet SMG s need for more services and functions 26 ZTE TECHNOLOGIES APR 2012

Success Stories Indonesia has more than 17,000 i s l a n d s a n d a p o p u l a t i o n o f more than 200 million, which makes it the fourth most populous country in the world. In recent years, I n d o n e sia s e c o n o my h a s g r ow n rapidly, and the high-speed growth of its telecommunication industry has been supported by strong national policies and market demand. PT Smart Telecom is a CDMA network operator affiliated with SMG in Indonesia. Since PT Smart Telecom was established, it has cooperated closely with ZTE its network solution provider. Over five years of development, PT Smart Telecom now has approximately 2.5 million users. In 2010, it was renamed PT Smartfren Telecom after another local CDMA network operator, M8, became affiliated with SMG. PT Smartfren Telecom is dedicated to developing data services and has deployed CDMA 1X, CDMA Rev. A and CDMA Rev. B networks. PT Smartfren Telecom has a flexible pricing policy, and this has increased the number of data card users and increased the network load. After converging their mobile and Internet networks, SMG was faced with new challenges in their Internet breakout gateway: The number of mobile network users doubled along with the convergence Continually increasing demands for high-speed mobile data services and multimedia services Higher requirements on network experience and fiercer market competition SMG s former platform had 10G capacity, however, it wasn t satisfying the needs of such a large number of users and was incapable of high-speed mobile broadband. The new network comprises the converged Smart and M8 networks, and it is better able to meet the demands of SMG s business development in the next five years. It was necessary for SMG to upgrade its network breakout equipment i n order to cope w it h skyrocketing demand for high bandwidth and new services. In order to provide better experience for Internet users, routers with expandable capacity, stable performance, and multiple functions needed to be developed. After the strict testing and evaluation, SMG selected ZTE as its exclusive supplier and chose the ZXR10 T8000 cluster router as its Internet breakout solution. The T8000 cluster router has 1.92T exchange capacity and 40G wirespeed forwarding through a single slot (100G ready) that can be smoothly upgraded to 400G. It can be used to create a multi-chassis system, which allows the network to be expanded and gives strong support to high-bandwidth services. With ZTE s forward planning and careful execution, SMG was able to connect the T8000 with equipment used in the existing network. The T8000 can bear all of the Internet traffic on the SMG network. The CPU s rate of multipurpose use reported by the ZXR10 T80000 can be determined by observing the remote webmaster and on-site equipment. This rate was less than eight percent even in peak service periods. This reflects the superiority of the forwarding and control-element separation of the newgeneration cluster router and distributed component based software. The ZXR10 T8000 router allows new services or functions to be dynamically loaded, and capacity can be smoothly, reliably, and stably expanded. Depending on the in-service software upgrade (ISSU) function, ZXR10 T8000 allows regular online module upgrading. Although one Internet breakout gateway satisfies the need for network expansion, potential risks still exist because of the single node and single address. Natural disasters also occur frequently in Indonesia, and optional cables are easily broken in such events. After considering network optimization proposals by ZTE engineers, SMG decided to add a local address to offer local mobile Internet users nearby access, to absorb part of the network traffic, and to shorten the response time of Internet services. This measure also enhanced the breakout strength of the SMG network. SMG already has more than 500,000 mobile data users and 100,000 data card users and is happy with excellent p e r for m a nce of t he Z T E Z X R10 T8000 cluster router. Richard Tan, vice president of PT Smartfren Telecom, said, ZTE T8000 cluster router helps us out of our difficulty with network expansion, and we are very satisfied with its stable performance and reliable operation. It fully meets our demands for network development. APR 2012 ZTE TECHNOLOGIES 27

Success Stories Vodafone: Exploring the Enterprise Network Market in India By Wan Yunfei India s 3G licensing auction, which came to an end in May 2010, raised 677.2 billion rupees (US $14.6 billion). This amount of money raised the question of whether it was worthwhile for a wireless operator to spend so much on a 3G license in light of the expected return. India s telecom market is well known as being fiercely competitive, and nearly all telecom operators in India have suffered from relentless price wars. India s telecom services are the lowest priced anywhere in the world and have attracted a mass of users. However, there has been no corresponding increase in return for operators because of low average revenue per user (ARPU) as well as high operating costs. All telecom operators in India now have to work out how to increase operating income and return. As with other operators who have pinned their hopes on India s 3G market, Vodafone has also concentrated its efforts on developing 3G services for individuals. Vodafone is also seeking 3G business from large clients. For reasons related to society, politics, and economy, wired networks in India have limited coverage. Optical cables and copper wires are 28 ZTE TECHNOLOGIES APR 2012

Success Stories Figure 1. 3G access solution for enterprise networks. also often damaged by road construction and unstable voltage in India, so wired networks can be unreliable. These factors would significantly affect enterprise users who are the biggest customers with high ARPU for an operator. As 3G wireless access networks advance in India, Vodafone has launched 3G wireless routers as CPEs for enterprise networks. These routers provide wireless broadband access in areas not covered by wired networks and can also be used as standby access links in areas covered by wired networks. This helps Vodafone greatly improve coverage and reliability of its enterprise network access services. These services have become a trump card for Vodafone in competing for high-end enterprise users. To sustain development and retain enterprise users, it is necessary to enhance loyalty of enterprise users. Providing broadband access is not enough. Broadband access only satisfies the basic needs of Internet. Enterprises demand multiservice access gateways, such as IPSEC VPN, L2TP VPN, or L2TP over IPSEC, for safe remote access to enterprise networks. They also demand gateways with firewalls, to protect against hackers, and gateways with various interfaces, such as E1 and POS for multilink access. To provide enterprises with complete 3G access solutions, Vodafone has developed versatile CPEs that can be flexibly deployed to meet user demands. After much market research, inquiry, and on-site testing, Vodafone selected ZTE s ZXR10 ZSR smart router as its CPE for 3G access. ZSR series routers are specially designed for enterprise networks. They support all standard 3G wireless access modes WCDMA, CDMA2000, and TD-SCDMA and has diverse physical interfaces (Ethernet, E1 and POS). ZSR has a built-in firewall that can protect enterprise networks against hackers. ZSR also provides L2TP VPN and IPSEC VPN services for safe remote access to enterprise networks. Vodafone depends on the features of ZSR to provide enterprise users with a complete 3G wireless access solution. This lays a solid foundation for Vodafone to develop India s enterprise market, which is valued at US$ 2 billion. APR 2012 ZTE TECHNOLOGIES 29

Solution STB-based Motion Sensing Game Solution By Wang Chuanjiang Wit h t he development of triple play and e-home, manufacturers have stepped up competition to develop set-top boxes (STBs) and TV sets. New highdefinition, 3D, and Internet TVs have appeared on the market. However, many of the functions found in these new products are those of traditional PCs, and it is hard to attract new customers with old functions. In the home entertainment market, developers and operators will profit by a multi-business mode and providing customers with new functions that are different from those of an ordinary PC. Demand Analysis What kind of services can be provided for added value? In triple play, the operator is responsible for gaining profit for the game developer and manufacturer also. Obtaining a high return from video and information alone is difficult. The key to generating profit is to fully mobilize resources to develop an industry environment in which customers, developers and operators all take an active part. STB can be used not only for watching HD television but also for playing motion sensing games and surfing on the Internet. The STB-based motion sensing game is fun for everyone. ZTE's STB-based Motion Sensing Game ZTE has introduced an STB-based motion sensing game that brings together game-manufacturers and operators. ZTE has created two kinds of STB motion sensing game: A 3D gamepad motion sensing game. A bluetooth receiver and motion sensing gamepad with accelerometer and nine-axis gyroscope are used. You can play against a virtual player or against another player. The game is 3D. STB available: B700V3 and above 2D camera motion sensing game. A camera is used to capture the movements of the player. The virtual objects on the screen are 2D. STB available: B600V4A/ B700V2/B700V2A The game platform, including the game server and management server, is deployed in the operator s computer centre on partial nodes. The motion sensing gamepad and camera are connected to the set-top box. When you choose a game from the electronic program guide on the game channel, you enter a virtual motion-sensing game hall. When you enter the game hall, a request for a login is sent to the game server. The game server sends an authentication request to the operator s authentication server to verify the user. After the user is verified, the game server allows log in and retrieves the user s game file. With some games, the user must pay before playing. The player s game top-up is integrated with operator s billing system. The money collected by the operator is divided between the operator, ZTE and the game developer. Memberships, shopping, and social networking can be added to the game hall, which increases fun and cohesion. The game center. The user has subscribed for the games list and can access the center to play games. Fitness program. The user can draw up his own fitness program. Social community. Friends management, reception and delivery of messages. Game mall. The unsubscribed games list (including props). User can subscribe and top up for these games. Membership management. Add or delete family members. Game files for every member are different. System settings. Connection settings for motion sensing peripherals. 30 ZTE TECHNOLOGIES APR 2012

Solution Management Server Game Server Network STB Camera Gamepad Remote Control Figure 1. The topology of the motion-sensing game. TV Set ZTE s STB motion sensing game uses software development kit open development protocol. It provides the game manufacturer with an easy implantation development environment. It also provides open and unified interfaces for user login, authentication, game browsing, game downloading, purchases and top-up so that it is convenient to access. Games can be deployed on the download platform; when the user wants to play, they can directly download the game and let it run in the box, which is convenient for upgrade and can prevent piracy. Online upgrades are also available to support new motion sensing games. ZTE s STB motion sensing game creates profit for the operator, game developer, and hardware manufacturer. The operator provides the audio service platform and Internet access; ZTE provides the STB motion-sensing hardware; and the game-manufacturer provides motion sensing game. The motion-sensing game can be administered by an operator alone or in conjunction with ZTE s professional operation team. The motion sensing game is one of the value-added services on the digital television service portal set up by the operator. The operator manages game upgrades, billing and charging, advertisements, competitions, and marketing in a unified way, and the benefits are shared with content providers. With the motion-sensing game, an operator can profit from seizing market share and selling game peripherals and top-ups selling new games and virtual props used in the game selling advertising on the game platform. APR 2012 ZTE TECHNOLOGIES 31

Third Eye Market Share Alert: 3Q11 Global ON Annualized spending grew, but 4Q11 outlook appears less rosy By Dana Cooperson, OVUM Summary In a nutshell With most of the top-line v e n d o r r e v e n u e d a t a confirmed, preliminary results indicate that despite a sequential dip in quarterly spending in 3Q11, annualized global optical networking (ON) spending rose to $15.5bn. Although a sequential decline is seasonally consistent with most third calendar quarters and, therefore, ordinarily no cause for alarm, our quarterly vendor calls and recent market reporting, including many earnings announcements up and down the food chain, point to a deteriorated outlook for 4Q11. Spending in all regions was down sequentially, but only in North America was it down year over year. Vendor results were mixed: Alcatel-Lucent, Tellabs, Ciena, Ericsson, and Nokia Siemens Networks (in descending order) each lost rolling 4Q share; Huawei and NEC were flat; and ZTE, Cisco, and Fujitsu (in descending order) all gained. We are running ahead of our $14.9bn forecast for the year and are unlikely to miss the forecast. The main cause for alarm beyond 4Q11 is that the anticipation of worse times ahead could create them, as market players act more conservatively than is warranted by underlying market conditions. Ovum view Preliminary results indicate that the climb up from the 2Q10 market trough continued in 3Q11. Revenues rose to $3.8bn, down 9% compared with 2Q11 but still up 4% compared with 3Q10. Of most comfort to market watchers and players, annualized spending was up 9% compared with 3Q10 to $15.5bn. This marks the third and best sequential quarter of annualized spending gains versus the year-ago period and puts the market more than halfway back to its pre-recession peak of $16.6bn, posted in 3Q08. Spending continued to shift away from legacy bandwidth management and aggregation to DWDM and converged packet optical (CPO) products, with ROADM and 40G/100G being growth hotspots. Revenues for new products with OTN switch capabilities inched up, but many of these products remain in customer lab and field trials. As 3Q11 unfolded then progressed to 4Q11, general market sentiment turned more cautious and negative than we ve registered in over a year. For example, Infinera proactively warned about the likely 5 15% negative impact on its revenues in 4Q11 due to flooding at its Thai contract manufacturer. But due to second-sourcing and inventory on hand, other vendors reported very little expected impact. We did, however, hear material reports of the big North American service providers, most notably AT&T and Verizon, pushing deliveries into 2012. Spending was off sequentially the most in percentage terms in North America and EMEA. Consequently, results tended to be the most negative for the top ten vendors with more than 50% of their revenues coming from those two regions; only Cisco and Fujitsu bucked this trend. Key messages ZTE gained the most share for the 32 ZTE TECHNOLOGIES FEB APR 2012

Third Eye second 4Q rolling period in a row: ZTE gained 0.6 share points in the 4Q10 3Q11 period, matching its performance last quarter. Cisco followed with a 0.2 point gain and Fujitsu with 0.1 points. Number one Huawei increased its share lead over number two Alcatel- Lucent: Huawei had no loss or gain in annualized share, but since Alcatel-Lucent topped the list of vendors with a 0.7-point share decline, Huawei increased its lead. NEC also registered neither a gain nor a loss, while Tellabs, Ciena, Ericsson, and NSN joined Alcatel- Lucent in the loss column. Performance to forecast: Ovum published an updated forecast in June (see ON Forecast Report: 2011 16). Annualized market spending increased to $15.5bn, which is 4% over our 2011 most likely forecast of $14.9bn. Of the product categories we track, through 3Q11 bandwidth management and SLTE are underrunning our forecast while all other categories are overrunning. Fear of worsening economic instability in Europe and the US is leading to caution up and down the food chain and appears likely to have a negative impact on ON spending in 4Q11 in those markets. However, it remains unlikely that performance in 4Q11 will be so bad that spending for the year will dip below $14.9bn. China Table 1. Global ON revenues for top ten vendors, 3Q11. is likely to play a big part in the final global spending tally. DWDM and packet continue to drive market growth: Spending for DWDM passed 50% of market spending for the first time in 3Q11 (both for the quarter and the rolling 4Q period), even as annualized aggregation spending was the strongest we ve seen in over a year. SLTE spending remained disappointing despite lots of activity. Bandwidth management continued to sink, dropping below $1bn annualized for the first time and highlighting Tellabs troubles. Key market trends OTN switch sales are being driven by 40G/100G terrestrial and subsea network upgrades, along with international and high-capacity leased lines. While Huawei, Infinera, and ZTE have been shipping OTN switch fabrics for revenue for years, Ciena and Tellabs shipped for revenues starting in 2Q11, and Alcatel-Lucent and Ericsson did so in 3Q11. NSN is shipping for trials, but not yet for revenues. ECI announced a new OTN-capable series, the Apollo OMLT family, just after the end of the quarter (see ECI s Apollo OMLT: a new kind of god (box)?). We expect at least one more vendor to announce OTN switch capability by the end of the year or early in 2012. 40G/100G growth continues; more vendors ship product: Growth in 40G and 100G shipments continued in the quarter. The need for better reach and better performance on high- PMD fiber pushed 40G coherent sales, while Fujitsu joined the list of vendors offering 40G coherent APR 2012 ZTE TECHNOLOGIES 33

Third Eye during the quarter. Among the top ten, Alcatel- Lucent and Ciena still have the coherent 100G market mostly to themselves. Huawei says it has shipped both coherent and non-coherent 100G; ZTE notes noncoherent shipments, with coherent being available for field trial in 2H11; Ericsson and NSN expect to ship 100G coherent for revenue in 4Q11, with Cisco, Fujitsu, NEC, and Tellabs following suit in 2012. 40GE and 100GE remain very rare to date, although we expect this to change in 2012. A more complete update on 40G/100G will be available in our full share report. MPLS-TP still largely a future need; enterprise services and backhaul are pushing Ethernet-based transport. Vendors routinely report that only about 25 30% of aggregation product client interfaces are Ethernet, with some vendors citing mobile backhaul and others enterprise services as the leading growth driver. Most vendors are implementing both an MPLS-TP and IP/MPLS control plane in their edge products, as there is no clear consensus from customers which way they will want to go for what applications. The cloud s impact on ON is loud: For the most part, where carrier infrastructure is concerned, the impact of the cloud remains hazy. In preparation for our upcoming cloud report, we asked vendors for any special requirements they are seeing from customers and if there were any leading service providers and we came up almost empty. Encryption/ security, low latency, self-service portals for end users looking to commandeer bandwidth on demand, and extreme reliability were some likely requirements that vendors did suggest. 3Q11 Results Global revenues up 4% compared with 3Q10, but down 9% sequentially; half of the top ten vendors revenues declined year over year Year-over-year global spending grew for the fourth straight quarter in 3Q11, although at the lowest percentage (4%) for those quarters. Of the top ten vendors, ZTE, Cisco, Fujitsu, and Huawei all posted revenue growth compared with 3Q10; NEC was flat; and Tellabs, Alcatel- Lucent, NSN, Ciena, and Ericsson all had revenue declines. For Tellabs, this marked the third year-over-year decline in a row. Market Share Changes ZTE gained the most, Alcatel-Lucent lost the most annualized share Huawei, Alcatel-Lucent, ZTE, Ciena, and Fujitsu remained the top five vendors based on annualized share; all have more than 5% annualized share and more than $1bn in annualized revenues. The share gap between Huawei and Alcatel-Lucent widened in 3Q11 for the first time in over a year as Huawei s share held steady but Alcatel- Lucent s slipped. Number three ZTE topped the list of share gainers for the second straight quarter. On the other end, Tellabs continued to struggle as its flagship 5500 bandwidth management business slid further from historic highs: Tellabs, which was the number six ON vendor as recently as late 2010, has dropped a full share point since, has slipped to tenth place, and is in danger of getting knocked out of the top ten by China-based FiberHome. Although NSN and NEC each improved their market ranks, their related share shifts were not significant. Table 2. Global ON market shares for top ten vendors, 3Q11. 34 ZTE TECHNOLOGIES APR 2012

News Brief ZTE Attains Global No.1 PCT Patent Filings Spot 6 March 2012, Shenzhen ZTE announced it had attained the No. 1 global ranking for PCT patent filings in 2011. According to global findings released by the World Intellectual Property Organization on its official website, ZTE ranked No.1 among global companies in terms of PCT patent filings in 2011 with 2,826 total applications. The company moved up from the No. 2 spot, which it held in 2010. The statistics also show consistent growth in ZTE s international patent filings over the past five years, which increased by more than 50 percent year-on-year in 2011. According to ZTE, more than 60 percent of its PCT filings in 2011 were related to LTE/3G, cloud computing and the Internet of Things. To date, ZTE s total international patent filings (including pending applications) is over 10,000. ZTE Joins Global IT Leaders on Cloud Computing Standards Study Group 1 March 2012, Shenzhen ZTE announced it will join global information technology leaders on a cloud computing standards study group. The group, formally called Study Group 13 (SG 13), is overseen by ITU-T. Other companies in the group include Microsoft, France Telecom Orange and the Korean Electronics and Telecommunications Institute. ZTE is the only Chinese company in the group. SG 13 s research includes work on standards related to interoperability of cloud services and portability of cloud data. The group is derived from the Focus Group on Cloud Computing (FG Cloud), a temporary organization created by ITU-T in response to industry demand for standards. Companies from countries around the world participate in the FG Cloud through research activities. In addition to its work for ITU-T, ZTE also has been filing for cloud c o m p u t i n g p a t e n t s s i n c e 2 0 0 6. According to statistics from China s State Intellectual Property Office ZTE ranks No.1 within the country with 107 cloud computing patents. ZTE IPTV Low Bit Rate HD Transcoding Solution Nominated for Global IPTV Industry Award 1 March 2012, Shenzhen ZTE announced that its innovative IPTV low bit rate high definition transcoding solution has been nominated for the World s Best Component or Enabler Award by the IPTV World Forum. The solution is on display at the Mobile World Congress 2012 in Barcelona. ZTE s low bit rate high definition transcoding technology decreases the amount of IPTV video streams required for network transmission and lowers total cost of ownership for telecoms operators. It also enhances user experiences and decreases investment and operating costs, thereby improving returns on unit network cost. The encoding technology of the low bit rate high definition transcoding solution also is more efficient than other solutions currently on the market. It can transport streaming HD content that would normally require 8 Mbps at 3 Mbps. This reduces network capacity strain and improves QoE network services. APR 2012 ZTE TECHNOLOGIES 35

News Brief ZTE Reaches Wireless Network Expansion Agreement with Etisalat Misr ZTE, Telefonica Jointly Launch Call Me Now Service in Venezuela Service now available to over 100 million users in 14 Latin American countries 29 February 2012, Shenzhen ZTE and Etisalat Misr have reached an agreement to expand the Egyptian operator s network as part of 2012 expansion plans to meet forecast capacity requirements. This contract is the second phase of the Etisalat Misr wireless network e x p a n s i o n p l a n a g r e e d b y b o t h cor porations covering the supply, installation and implementation of SDR UMTS equipment and BSS solutions on a turnkey basis. The plan is expected to expand to cover further infrastructure development, which is a major focus area for both corporations in 2012. The two corporations have also agreed to extend the mutual strategic cooperation in other technology areas including microwave transmission, core networks, power solutions and value added services. Etisalat Misr has been leading the broadband market in Egypt since 2007 and was the first company in Africa to introduce HSPA+ technology in the summer of 2009, providing Egyptian customers with Internet speeds up to 42 Mbps, and will continue its technological evolution to maintain its broadband leadership in the Egyptian market. 1 March 2012, Shenzhen ZTE a n nou nced it has pa r t nered w it h Telefonica to jointly launch Call Me Now (CMN) service in Venezuela, making it available to over 100 million users in some of the Latin American countries where Telefonica operates. The CMN service is initiated when call receiver is unreachable or busy. The system continues to monitor the receiver and notifies the caller when it detects they Movicel, ZTE to Launch Commercial LTE Network in Angola 28 February 2012, Barcelona Movicel, one of Africa s largest GSM operators, announced it will launch a commercial LTE network in Angola in partnership with ZTE. LTE, also k nown as 4G, is the most advanced telecommunications technology currently available and it defines a clear path toward future are reachable. This eliminates the need to leave a message and call completion rate and ARPU are increased accordingly. Telefonica is a leading telecoms operator that provides services in Europe and Latin America. In 2008, ZTE began providing voice mail service (VMS) for Telefonica and began construction of its Latin American VMS services in 2009. ZTE currently provides VMS services for 120 million Telefonica subscribers in 14 countries. developments. The an nouncement of the creation of a commercial LTE net work by Mov icel a nd Z T E i n Angola shows the commitment of both companies in pioneering state-of-the-art telecommunications technology on the African continent. The jointly built network will be based on ZTE s latest Uni-RAN and Uni-Core solutions. As part of the project, ZTE will provide LTE equipment for key Movicel markets across the country. In addition, ZTE will upgrade Movicel s current 3G core network to support LTE services. ZTE will also provide management and maintenance for the network. 36 ZTE TECHNOLOGIES APR 2012

News Brief ZTE and 3 Sweden Present a Live Interactive Video Demo via TD-LTE at MWC 2012 28 February 2012, Shenzhen ZTE and 3 Sweden run a live interactive video demonstration using TD-LTE technology at Mobile World Congress 2012. The ZTE booth in Hall 8 at the Barcelona is con nected with a 3 Sweden store in Stockholm. Actors on each side play a game called Lucky Roll, with prizes for game winners. 3 Sweden and ZTE announced in December 2011 the world s first LTE FDD/TD-LTE dual-mode commercial network which is now in commercial use in Stockholm, Gothenburg and Malmö in Sweden. ZTE 2007-2011 Managed Services CAGR Hits 81% 29 February 2012, Shenzhen ZTE announced at the Mobile World Congress in Barcelona its compound annual growth rate (CARG) for its managed services business was 81 percent from 2007 to 2011. ZTE s managed services growth during the period These Nordic cities are the first in the world to see these green dual-model base stations. was the fastest in the industry. T h e c o m p a ny s 10 0 m a n a g e d services contracts now serve more than 100 million end users across the globe. In 2005, ZTE changed its managed services strategy, which led to massive growth. S i n c e t h e n, t h e c o m p a ny s managed services b u s i n e s s h a s b e e n o n e o f i t s fastest growing areas. ZTE s integrated end-toend services solutions and intelligent managed services solutions provide operators with services that allow them to adapt to diverse demands. ZTE Debuts LTE-A Inter-Band Dual- Carrier Commercial Base Station at MWC 2012 27 February 2012, Shenzhen ZTE debuted its LTE-A inter-band dual-carrier commercial base station at the Mobile World Congress 2012 in Barcelona, Spain. The new LTE-A commercial base station is based on the company s leading SDR hardware platform. It introduces interband carrier aggregation and multiple input and multiple output (MIMO) technologies. These technologies can double peak rate for individual users, enabling high-speed downloads of up to 270 Mbps in the downlink and meeting growing data service demands. During the congress, ZTE also demonstrated the base station s inter-band carrier aggregation capabilities on two bands: 20M 2.6G and 20M 1.8G. ZTE Launches Industry First TD- LTE Pico Base Station at MWC 2012 27 February 2012, Shenzhen ZTE launched an industry first, nextgeneration TD-LTE multi-mode Pico base station at Mobile World Congress 2012 in Barcelona, Spain. The new Pico base station is used to mitigate problems associated with rapidly increasing mobile ser vice data requirements. It also provides comprehensive coverage and capacity of f loa d i ng t o s upple me nt m a c ro coverage. The base station can be deployed in hot spots, blind spots, celledge spots and indoors dependent on traffic. It is also compatible with Micro, Macro and Femto base stations. APR 2012 ZTE TECHNOLOGIES 37

IPTV Picture your ideal IPTV solution. Then come and talk to us. At ZTE, we ve already seen phenomenal success in IPTV with solutions that have propelled us to number 1 in Asia. Now we re ready to bring IPTV everywhere. Our unique triple-screen topology platform - covering TV, PC and mobile and based on mature designs - allows for lightning fast, highly customized multimedia delivery, enabling operators to link hundreds of channels and services to a single system. Of course, we also let you customize everything down to the minutest detail, so you can be sure of receiving a solution that s a perfect fit for your market. All across the world, we re ready. So if you re looking to give your subscribers the entertainment that ll set you apart, give ZTE a call. www.zte.com.cn