European Broadband Access Business Model

Competitive Pressure

  As the EU further opens up fixed access infrastructure and formulates policies for future broadband coverage, many emerging telecom, cable, and mobile operators are entering the fixed broadband sector. Revenue from fixed voice is declining because of increased mobile usage, so fixed broadband―a major source of future revenue for traditional operators―will surely become more competitive. Operators are most concerned about offering higher bandwidth, better quality of service (QoS), and better quality of experience (QoE) at a lower price and in shorter time than their rivals. To rally against competition from emerging telecom and cable operators, traditional fixed operators have worked out broadband plans. BT has an NGA initiative and DT has also devised a GPON 2.0 plan.

Service-Driven Force

In recent years, over-the-top (OTT) services have developed rapidly and will eventually replace IPTV and digital TV as mainstream video services in the future. Informa forecasts that by 2015 OTT-centered video services will account for 50% of all Internet traffic, and point-to-point (P2P), storage, and Web browsing services will make up the other 50%. Since P2P and storage services are difficult to manage, operators focus their attention on OTT and IPTV. The most pressing issue is adjusting network architecture so that it offers custom-made OTT services with end-to-end QoS and QoE guarantee. In this way, OTT services are no longer transparent to their networks. To get a slice of the OTT pie, traditional operators have adjusted their network architectures. Telefonica has deployed a unified content distribution network (CDN), TeliaSonera has built its own OTT platform, and DT has defined its MPLS deployment in its GPON 2.0 plan.

Faced with stiff competition and driven by emerging services, traditional fixed operators in Europe have chosen the following paths for network development:

Future-proofing

• building broadband access networks with super-high bandwidth to meet EU requirements for future broadband coverage and video bandwidth 

Resilience and intelligence

•    leveraging the advantages of network infrastructure to extend the network’s value to cloud (service side) and terminals (home network side)

•    offering differentiated service assurance to users, content providers, and service providers through an end-to-end intelligent network 

   QoS-based charging as opposed to bandwidth-based charging.

Benefits to Operators

ZTE cooperates closely with European operators and understands broadband trends on the continent. ZTE has proposed a European fixed broadband business model based on terminal-pipe-cloud architecture. This business model brings European operators the following benefits:

Fast broadband connection to support video growth. Video has dominated multimedia services driven by the growth of HDTV and 3DTV. Operators in Europe have a clear objective of broadband development. The EU aims to have 100% broadband coverage by 2013 and to increase coverage bandwidth to 30Mbps for all Europeans by 2020. It also aims to have 50% of all European households subscribed to Internet connections above 100Mbps. To reach this goal, existing access networks need to be immediately reconstructed. Most operators in Europe are boosting bandwidth for future-proof access networks by shortening the length of last mile and adopting FTTH/GPON+NG PON or FTTC/VDSL2 technologies.

Simplified network to reduce OPEX.PON technologies are being introduced to simplify the existing network. Less central office sites and active optical nodes are used. Future-proof NGOSS architecture further streamlines the existing O&M process and cuts OPEX and labor costs. Mobile backhaul over PON enables fixed-mobile convergence in the last mile and helps operators increase network efficiency and reduce overall construction costs.

Intelligent network to generate new revenue streams. A unified CDN is built, and access network interfaces and APIs are open to ICPs and ISPs. A smart pipe is also set up to ensure differentiated end-to-end QoS and to allow operators, ICPs and ISPs to share the OTT value chain. An intelligent home network connects all home appliances and electronic devices through a service gateway and also serves as a media sharing center that allows streaming media to be shared by all digital devices. All these household electronic devices are controlled through a unified visual user interface. This improves user experience and stickiness.

Fast deployment to shorten time to market. Network construction solutions are tailored to market environments and network conditions. This ensures that operators get a head start in the broadband access market through fast network construction and service provision. In areas with a good copper network, existing copper resources can be used to quickly offer super-high bandwidth through VDSL2. In areas requiring new network construction, operators can deploy cutting-edge fiber technology to quickly deliver FTTH services and to grab a large share of the market.

Uni NGA

ZTE’s Uni NGA is tailor-made for operators in Europe and meets network requirements of European fixed broadband business models. The solution is based on a terminal-pipe-cloud architecture and focuses on integration, openness, intelligence and low TCO. It also provides operators with end-to-end QoS and security guarantee.

• Integration: ZTE’s future-proof unified broadband access platform enables full-service access and full-scenario coverage. The platform supports access to both existing services, such as ISDN, and future video-centered broadband services. It supports a diverse range of access media, including copper wires and fibers, and various application scenarios, such as FTTH, FTTB, FTTC and FTTN. In addition to fixed broadband services, it provides data traffic offload and mobile backhaul through WLAN.
• Openness: Uni NGA supports broadband access over copper and fiber and allows for smooth evolution to NG PON. This meets EU requirements for full and open competition. Operators can jointly build and operate an FTTx network, which reduces construction costs and risks and increases network efficiency.
• Intelligence: Uni NGA allows operators to transform from being an extensive dumb pipe to an optimized smart pipe. Dynamic service assurance provides better service awareness and adaptive QoS. Quality-based charging is implemented through enhanced service differentiation, accurate traffic detection, and on-demand service provision. An innovative business model with an end-to-end smart pipe at its core allows operators to benefit from both downstream users and upstream ISPs and ICPs.
• Low TCO: Working on the principle of “less consumption, lower cost and better life”, ZTE helps operators build low-TCO networks with green technology and equipment. ZTE’s custom-made, future-proof solution protects operator investments and reduces network construction costs. A green network with intelligent and unified O&M also reduces OPEX.

Speeding up broadband connection is a core goal for operators. ZTE’s Uni NGA solution helps operators boost network performance with an integrated, intelligent, and low-TCO solution and generate new revenue streams with an innovative business model.

Success Cases

Many European operators are putting the broadband access business model into practice. After speeding up broadband connection, they have built intelligent networks to increase network value, reduce TCO, and create new revenue sources.

In Lithuania, ZTE customized an FTTH solution for TEO, a subsidiary of TeliaSonera. By offering speeds of up to 100Mbps, the solution pushed Lithuania into the top 3 countries in the world for average data speeds. TEO was also recognized by the Lithuanian government as the greenest enterprise because of its deployment of the green FTTH network.

In the UK, ZTE helped local operators, including IFNL, build FTTH networks using GPON.  Supported by the EU’s unified plan and policies of the UK, the FTTH networks provide broadband access in rural areas, promote competition in the local broadband access market, and boost local economies.

In Germany, ZTE and DT have worked closely to develop a custom-made GPON solution that further simplifies DT’s network structure. MPLS was introduced to make the network more intelligent. The solution enabled DT to provide all SPs with end-to-end security and QoS guarantee. Through the enhanced user awareness and experience, DT has maintained its leading position in the German market.