Perspective on NGN Commercial Deployment in China

NGN not only means the renewal of network technology, but also marks an important milestone of telecom industry development. Carriers, equipment manufacturers, various members on the industrial chain and the government should keep pace with time and make innovation together to implement large-scale NGN commercialization.

Telecom technologies are emerging one after another day by day, but only well prepared technologies that continuously perfect themselves in practice could obtain large-scale commercial deployment on mainstream markets. The commercialization course of Next Generation Network (NGN) in China has proved it.

1 Four-Year Trial Lays  Foundation for NGN  Development
In recent years, the development and deployment of NGN based on Softswitch and packet switching have become a hot topic in the industry. Since the first Softswitch trial system was put into operation in Ningbo, a city of eastern China, in 2001, NGN has experienced 4-year trial and commercial deployment in China. Its industrialization has assumed a state of large scale and rapid growth.

    First, technical and test specifications for NGN framework, equipment and protocols issued by the Ministry of Information Industry (MII) in 2000 have laid a good foundation for its large-scale commercialization. In 2002, Network Access Examination Center for Telecommunications Equipment of MII completed the network access examination for Softswitch equipment. ZTE Corporation and North Networks first passed the test and obtained the certificates for network access.

  Second, carriers’ energetic devotion to NGN tests and commercial trials has paved a road for NGN commercialization. Since 2002, China Telecom and China Netcom have begun the investigation and test in NGN network technology and service capability. An NGN trial network project started in 2002. China Telecom and China Netcom both built over 20 commercial NGN networks. China Unicom built its NGN trial networks in Chongqing, Guangdong and Shenzhen of China. China Tietong opened a Softswitch commercial office in Fujian, a province of southern China.

  Third, with the common promotion of carriers and equipment manufacturers, an industrial value chain that supports NGN operation and network growth has also experienced a quick development. On one hand, through the practice in NGN trial network project, carriers have gradually developed multiple matured commercial patterns; on the other hand, with the promotion of equipment manufacturers, industrial alliances such as the NGN terminal alliance and service alliance have set up one after another, which makes good preparation for a large-scale commercial use of NGN.

  Fourth, the number of Chinese Internet subscribers and broadband subscribers has increased at a very fast speed, which has laid a good market foundation for NGN multimedia service development. The number of Internet subscribers in China has reached 78 million by the year 2004, ranking the second in the world. Different access modes urgently need an intelligent network to manage and allocate resources. When a network encounters congestion, the need for NGN becomes urgent.

2 Joint Efforts Are Made for Maturity of NGN Industry
NGN brings forward both challenges to carriers’ operation, management and supporting systems and new requirements on the structure of the whole telecom industry. Carriers, equipment manufacturers and other partners on the value chain must cooperate to develop successful commercial patterns and healthy industrial alliances for a successful commercial use of NGN.

  First of all, successful commercial patterns rely on carriers’ understanding of the NGN market and cooperative innovation with equipment manufacturers. According to past 2-year NGN commercial trials in China, carriers and equipment manufacturers have worked together and creatively developed a few profitable patterns for the NGN commercial use in the light of the specific situation in China. With the aid of the multimedia capability and open service interface of NGN, carriers provide new services such as packet voice, instant messages, click to dial and click to fax, and enter the enterprise communication market.

  The commercially-deployed Softswitch network of the Guangdong Branch of China Telecom is a good example. The network covers Shenzhen and Zhaoqing of Guangdong Province. Since its commissioning in 2003, the network has had nearly 20 000 subscribers. Aiming at big enterprise groups, transient population and mass market, the carrier focuses on matured voice services and has developed a profitable operation pattern. NGN’s advantages such as short construction period and flexible equipment deployment can be used to develop services quickly and obtain returns.

  Chinese carriers actively innovate on the development of Value-Added Services (VAS) development. For example, China Netcom, cooperating with ZTE Corporation, opened the Netcom Broadband Telephone Project in June 2002 and started an overall NGN application with a focus on Ningbo, a city of Zhejiang Province. This is the first large scale application of Softswitch in China. So far, such Softswitch networks have rooted and bloomed in many cities. The NGN commercial networks of China Netcom can now supports over 100 000 subscribers. The implemented VASs include Voicemail, Web Conference, Web Call and so on. Moreover, Chinese carriers have also had a try in other profitable operation patterns such as three-network-in-one for home subscribers and cooperative network operation, richening fixed network services and flourishing the fixed network market.

  In addition, the large-scale commercialization of NGN cannot go without the maturity of its value chain. Open and distributed network framework of NGN and its separation of call control and the bearer greatly increase the complexity of its industrial value chain when bringing carriers tremendous flexibility in network construction and operation. It is noticeable that Chinese major equipment manufactures play a great role in promoting the development of NGN industrial value chain, especially the cooperation of NGN terminal alliances and service alliances. On one hand, quite many innovative NGN services rely on intelligent terminals due to the openness of NGN. Chinese equipment manufacturers established an NGN terminal alliance in 2002. Its members are from chip manufacturers, terminal manufacturers and network equipment providers. It provides rich selections of Integrated Access Devices (IAD) and multimedia terminals for carriers to attract more NGN subscribers. On the other hand, the large-scale commercial use of NGN needs rich services. The NGN service alliance, set up by domestic and overseas enterprises including ZTE, IBM and Microsoft, provides carriers with service platforms that integrate the unified communication capabilities of NGN and office automation. It helps greatly improve carriers’ abilities to attract valuable enterprise subscribers.

  Last, mature and perfect operation supporting systems are necessary for the commercial use of NGN. Distributed architecture of NGN puts forward a new challenge to carriers’ service development and management. On one hand, a large amount of small IAD equipment increases the workload of network maintenance and management; on the other hand, the diversity and flexibility of NGN services make it more complicated to open or terminate subscriber accounts. It is noticeable that Chinese equipment manufacturers can now offer specific solutions to possible operation problems of different networks, instead of simply providing equipment.

  For example, ZTE Corporation has launched its Network Management System (NMS) and IAD manager for NGN. They are devoted to, on a unified user interface, implement centralized management of ZTE equipment such as Softswitch, Trunk Gateway (TG), Signaling Gateway (SG), Access Gateway (AG) and IAD, as well as various ZTE data equipment for building data networks. Meanwhile, a management interface for equipment of other manufacturers is also offered. Therefore, with ZTE’s NMS and IAD manager, carriers’ network operation becomes much easier. Moreover, Chinese carriers actively use their creativity to quickly meet challenges that NGN brings to their operation and maintenance mechanisms.

3 China Energetically Participates in Developing 

   NGN Standards
As Chinese telecom industry continuously develops, Chinese carriers and equipment manufacturers are making stronger and stronger influences on the development of international telecom standards.

  At present, major international organizations in the field of NGN standards include NGN Focus Group (FGNGN, integrating the former SG13/11/16) of International Telecommunications Union (ITU), European Telecommunications Standard Institute (ETSI), 3GPP, IETF and so on. Chinese major carriers and equipment manufacturers are members of these organizations. Among them, the enterprises such as China Telecom, China Netcom and ZTE Corporation are very active. In a recent NGN conference held by ITU, 24 manuscripts from China have been submitted.

  With a large number of high-quality manuscripts submitted, the status of Chinese companies in the standard organizations is going up year after year. Chinese companies have especially obtained double attention in QoS and security of NGN. For example, in the Fifth Conference of ITU-T SG13 (on
multi-protocol and IP-based network interworking) held in February 2004, ZTE Corporation obtained the drafting right and editor seat of Y.vpn-qos in ITU-T NGN standard system. In the meeting of the NGN Joint Rapporteur Group of ITU in Geneva held in July 2004, ZTE obtained 2 editor seats respectively for drafting Y.e2eqos.1 and Y.ipaqos standards in the NGN QoS field.

4 NGN Brings Both Opportunities and Challenges
NGN not only is a tremendous improvement in telecom network technology, but also creates conditions for telecom carriers’ service transformation and strategic transformation. As NGN causes relative separation of telecom service offering, telecom carriers are changing from the subscriber-driven into the service-driven. NGN supports multimedia, high broadband and mobile communication, which will help carriers implement a transformation from single service operation to full-service operation. NGN will make carriers combine their business with e-commerce, education, medical treatment and entertainment, providing people brand new working and life styles. This will also expedite the birth of new value-added service providers such as ICP, ISP and telecom virtual service carriers. Telecom networks and the Internet finally tend towards convergence. A brand new telecom structure will accordingly come into being. NGN brings old carriers a good opportunity to "start a new undertaking" when creating a turning point for emerging carriers to grow.

  However, NGN also brings great challenges to carriers. Carriers must have a deep understanding and accurate judgment of market demands first, in order to effectively make use of NGN abundant multimedia capabilities and open service platform. Carriers who used to rely on existing services have to expand their markets. However, NGN now provides carriers with an opportunity to participate in and guide service development. Therefore, carriers should practically change their old business strategies, actively analyze market demands, and greatly improve their own research and development capabilities. Besides, open and flexible NGN architecture brings a new challenge to carriers’ operation and maintenance systems. Carriers’ existing operation and maintenance systems based on traditional PSTN are hindering the development of NGN. As said by Wei Leping, the chief engineer of China Telecom, "NGN represents a new production force. The old production relationship of operation, maintenance and management must be broken up to release the tremendous energy of NGN." In addition, large-scale NGN commercialization relies on innovative business patterns, which requires carriers to have flexible organizations and process systems. By dividing the market, understanding users’ demands, carefully planning the service process, billing system, and business promotion, and developing cooperative content/value-added service providers, carriers can become competitive with differentiated services and quickly make profits on their NGN service markets.

    On the other hand, NGN has fundamentally changed the existing telecom network structure, so it also brings a new task to industrial supervision and administration. The fast development of NGN and broadband access has brought the prosperity of the VAS market, but also induced new problems such as "service wholesale" and "operation by rent-a-network" that are new challenges to governmental supervisory departments. At the same time, the quick development of VoIP also puts forward a problem: how to protect the investment in PSTN. Besides, how to actively guide and support independent innovations of Chinese enterprises and improve their impacts on international industrial standards are also problems to governmental supervisory departments.

    Equipment manufacturers also have to meet the requirements of large-scale NGN commercialization. First of all, the openness of NGN network and service has induced more and more demands for customization, which requires equipment providers to grasp market demands and enhance their abilities of solution customization. Moreover, NGN has changed network operation patterns of carriers, so equipment providers are asked to closely seach their carrier clients and give them strong support to their operation, service expansion and even process transformation. NGN also provides Chinese telecom industry with an opportunity to catch up with and even surpass advanced telecom markets abroad, which requires equipment manufacturers to innovate and make breakthroughs in international standard establishment and international market expansion.

    NGN not only means the renewal of network technology, but also marks an important milestone of telecom industry development. Carriers, equipment manufacturers, various members on the industrial chain and the government should keep pace with time and make innovation together to implement
large-scale NGN commercialization. A nice spring of the telecom industry can be heralded!

Manuscript received: 2004-09-03