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Smarter ways to a Gigaband world

2017-03-20 By Ryan Ding, Huawei Products & Solutions President

    Key takeaways:

  • Huawei's ABCDE strategy covers ARPU, Bandwidth, Cost, Developers, and Experience.
  • The U-vMOS solution can measure video experience and help guide the development of customer-centric networks.

Ryan Ding believes that Gigaband will continue to develop to become the foundation of the intelligent world. 

Ryan Ding

Charlemagne founded Frankfurt on the banks of the Rhine River in the 8th century AD. More than 1,200 years have since passed and, today, Europe and the entire world are standing in the midst of a digital flood. We believe that a world is coming where everything will be connected, able to sense, and intelligent. But, before 2020, we need to get another 1.5 billion people online. This will require a huge investment, at least US$450 billion. We will not succeed in bringing ultra broadband to the world if we cannot use smart methodologies to help the industry achieve end-to-end commercial success.

The 1.5 billion

In 2015, Huawei defined Gigaband with over 300 industry leaders and experts. But, Gigaband is not just about hitting peak speeds of over 1 Gbps – those speeds must be available to 90 percent of people. But, global broadband penetration today is just 40 percent. Broadband is not just about speed – it also means the best experience. We look forward to discussing with industry leaders and experts how we can jointly push the Gigaband vision forward. 

The intelligent world has arrived

Virtual reality was a trending topic in 2016. An immersive VR experience requires a bandwidth of at least 1 Gbps; but, according to Akamai, the average bandwidth is only 20 Mbps, even in developed countries. This means that our networks aren’t yet ready for virtual reality or augmented reality. 

Everything is being connected and entire industries are going digital. These trends place much higher demands on our Gigaband networks. 

When the scientists at CERN conduct experiments using the Large Hadron Collider, 5 GB of data is generated in just one second. They have to send this data to 170 distributed computing centers scattered across more than 40 countries. Over the past year, we’ve seen huge progress in Gigaband. According to Viavi, there are now at least 350 gigabit networks globally, 164 under construction, and more than 100 telcos offer Gigabit services.

It’s as simple as ABC

In 2009, we unveiled our ABC curve to the industry. We’ve found that an exponential increase in bandwidth can lead to an exponential growth in costs, but much slower growth in ARPU. The cost and revenue curves diverge. So we developed a series of solutions to resolve this ABC paradox. The ABC curve addresses the fundamental problems of Gigaband, but this is far from enough. We also need to help customers make their technology a commercial success. As digitization spreads across industries and extends into homes, telcos will have to provide not just pipes, but many other services, like live CCTV. To enable these services, the industry will need a bigger ecosystem of partners, so this year, we’re adding a “D” to the ABC curve: D for developer. And we must remember that the ultimate goal of everything we do is to improve user experience. That’s not just in our homes or for consumer services, it’s key to everything we do. 

UBB ARPU consists of several revenue growth units (RGUs). For example, in the consumer market, BT offers IPTV video services in addition to basic broadband services. 4K video means an additional RGU. And other services such as home CCTV, energy management, and healthcare services also represent new RGUs. The industry market is also full of opportunities. China Mobile, for example, offers a series of industry video services tailored to different scenarios such as public security surveillance and construction site surveillance. It has deployed 60,000 cameras, each of which can generate an annual revenue of US$50. In 2015, China Mobile’s video services for industry earned it US$3 million.

Let’s talk bandwidth 

We’re already in the post-Moore’s law era. On the access side, we believe that we’ll need synergies between multiple technologies to handle the upcoming surge in data traffic. For example, in Germany, Huawei and Deutsche Telekom jointly developed Hybrid Access, using LTE and DSL to offer speeds of over 100 Mbps. For network platforms, we believe that scalability is the most important factor. GPON is today’s standard access technology. But 10G PON has already arrived, and we’ll soon see 40G PON. Our future platforms need to be able to support seamless migration to 100G PON. We also need ongoing breakthroughs and innovation in basic technologies to build sustainability into our network and society. 

We’re now testing a major new product – a next-generation 300T all-optical cross-connect. With the electronic cross-connects we have today, a 25.6T device uses nearly 20,000 watts of power. If we scaled that up by a factor of a dozen to 300T, it would consume 200,000 watts. This is impossible in our existing equipment rooms. But if we can swap the electronic device for an optical cross-connect (OXC), power consumption will be cut by 99.9 percent. A 25.6T electronic device, consuming 20,000 watts, will be replaced by a 300T device that uses only 200 watts, no more than the power used by two bulbs. We’ll begin testing this device before the end of 2016 and we expect to launch it in 2017.

What does it all cost?

Another important factor is cost. The additional 1.5 billion people that we want to get online comprises about 500 million households. A total investment of US$450 billion means that the cost of delivering broadband to each household is more than US$900. Now, if we assume that each household generates an ARPU of US$30, the payback period for that investment will be very long. We need to rethink E2E network deployment to cut costs. 

The last mile is the most difficult and expensive part, so the key at the access layer is to use all existing technologies, including copper, fiber, and even wireless, to enable broadband connections to the home. In rural China, the copper last mile used to be about 5 to 8 kilometers. When China Telecom rolled out its rural microwave transmission networks, it was able to cut the length of the copper last mile down to less than 500 meters. At a stroke, they cut the cost of connecting a household to a tenth of what it used to be, and could offer speeds of 20 to 50 Mbps. At the metro network layer, the key is network simplification. Both Deutsche Telekom’s Pan-net and Proximus’s SIMBA aim to reduce the number of network layers. In the backbone network, the key is to achieve synergies. Routers cost five times more than transport equipment. If we can achieve IP + optical synergy, we will see a sharp decline in costs. SDN is the technology that will make this possible.

Teaming up

The ecosystem is also very important. Huawei has held two developer congresses and opened up 14 developer ecosystems. Huawei’s smart home solution – OpenLife – has been deployed by Telefonica, China Telecom, and China Unicom, and we’ve brought in more than 200 partners to work with us. 

We’ve exposed our capabilities in connectivity, bandwidth, QoS, and big data to Telefonica Latin America, for example, so that it can deliver safe home solutions. We’ve also helped China Unicom Sichuan deliver safe home solutions, and tailored services for the elderly and childcare.

In 2015, we launched the U-vMOS model to define video experience and have done much work constructing experience-centric networks over the past year. After a year of applying U-vMOS 4.0, China Telecom Zhongshan now provides the best video experience in Guangdong, cutting complaints by 23 percent and increasing video users by 51 percent. Using visualized, preventive O&M, China Mobile Shandong has increased its video experience score from 3.18 to 3.42, and now has 5 million users for its broadband video service. Building on our experience with video, Huawei launched gMOS – a model used to evaluate gaming experience – at HUAWEI Connect 2016. We’ve been working with industry partners to define quality in the gaming experience and jointly provide a better experience for our end users.

The ABCDE strategy

To sum up, we need to focus on A, B, C, D, and E: 

For ARPU, video has become a basic telecom service, and telcos today are moving from video to video +. They’ll need to keep innovating to create more RGUs in addition to basic bandwidth and unleash the potential of Gigaband.

For Bandwidth, we need to achieve multi-technology synergies and apply new technologies, such as all-optical cross-connects, to make networks more scalable, improve resource rescheduling, and better respond to the ever-increasing demand for bandwidth.

For Cost, we need smarter ways to enable access via any media, reduce the number of layers in metro area networks, and achieve IP + optical synergy in backbone networks.

For Developers, we will work with telcos to create healthy developer ecosystems for shared success across the entire industry.

For Experience, Huawei will help telcos successfully monetize their networks by making user experience the key metric by which we build, optimize, and maintain networks.

As the German philosopher Goethe said, “Knowing is not enough, we must apply; willing is not enough, we must do.” Huawei stands ready to work with its industry partners to realize the vision of the Gigaband world. 

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