China Telecom Deepens 'Synergistic Broadband' to Advance 'Broadband China'

The "Optical Network City" and "Wireless China" initiatives are two key components of China Telecom's overall "Broadband China" strategy launched in 2011. It is reported that China Telecom's "Optical Network City" plan, first introduced this year, aims to increase fiber-to-the-home (FTTH) households to 80 million and 100 million by 2013 and 2015, respectively; "Wireless China" plans to reach 1 million Wi-Fi hotspots by the end of 2012.

On the one hand, the "Broadband China" strategy brings enormous business opportunities to the industry, driving the rapid development of FTTx, xDSL, EV-DO, Wi-Fi, and satellite communications. On the other hand, judging from the implementation over the past six months, "Broadband China" also faces multiple challenges that require joint efforts from the industry to resolve. We believe that one of the key factors for the successful implementation of the "Broadband China" strategy lies in the seamless handover between wired and wireless multi-standard networks, namely "Synergistic Broadband."

The Far-Reaching Impact of the "Broadband China" Strategy

To achieve the development goals of "Broadband China," China Telecom will carry out large-scale construction of networks of different standards, including FTTx (fiber optic cables and systems), xDSL, EV-DO, and WLAN. The demand for related equipment and services has a huge and extensive impact on the entire industry chain.

Driven by the Optical Network City plan, China's FTTH development has gained strong momentum. "FTTH is the ultimate goal of the access network and has already achieved remarkable results," said Zhang Chengliang, Deputy Chief Engineer of China Telecom Beijing Research Institute. The FTTH penetration rate in mainland China is far lower than that of developed countries and regions such as South Korea, Japan, and Hong Kong, China. In 2010, China Telecom began large-scale FTTH deployment, covering 9.57 million households. It is reported that China Telecom plans to increase the proportion of southern cities with 20M broadband access capability from 58% to over 70% in 2011.

The announcement of China Telecom's "Broadband China" strategy has greatly boosted the enthusiasm of manufacturers and other industry players. In fact, many optical communications companies and Wi-Fi equipment vendors saw significant increases in their first-half business performance. At the same time, fixed-mobile convergence provides users with a more convenient, high-speed, and fast network, greatly enhancing the user experience.

Difficulties Frequently Encountered During Six Months of Construction

Shortly after the launch of the "Optical Network City" initiative, China Telecom's regional subsidiaries in Shanghai, Guangdong, Shaanxi, and other areas responded to the Group's call by introducing local broadband construction plans. However, the local "Broadband China" construction projects have not been smooth sailing.

From the perspective of fixed broadband, although fixed access broadband such as FTTH and xDSL has significant room for user growth and is cheaper than mobile broadband, its construction faces multiple challenges. Previously, a Shanghai Telecom official told reporters that optical network construction is also affected by user acceptance and environmental complexity, with problems such as difficulty in deploying in old residential areas, high cabling costs, inability to achieve seamless coverage, inflexible access, and low actual installation rates in covered areas.

From the perspective of mobile broadband, China Unicom has been extensively deploying HSPA+, while China Mobile is vigorously developing TD-LTE, with access rates exceeding China Telecom's EV-DO Rev.A version. China Telecom faces intense competition in mobile networks and the market. Meanwhile, with the increasing number of smartphone users, the data traffic pressure on 3G networks has grown, degrading the user experience. What worries China Telecom even more is that mobile network traffic is growing rapidly, while revenue growth is far lower than data traffic growth. To achieve seamless connectivity, wireless networks such as 3G are indispensable. With the growing number of Tianyi mobile users, the enormous pressure on China Telecom's 3G network has forced it to build a large number of Wi-Fi sites to offload mobile terminal internet access demand.

The smoothness of handover between different wireless networks of operators is also somewhat lacking. A user once told reporters that when the 3G signal is weak, their data card switches to the 2G network, but when network conditions are good, it cannot quickly switch back to the 3G network, greatly affecting the user experience.

"Synergistic Broadband" Becomes the Key Breakthrough

"Operators need to achieve seamless convergence and access of multiple wired and wireless access methods." In the view of Wei Leping, Director of China Telecom's Science and Technology Committee, a key approach to achieving rapid development of the broadband strategy in the face of these challenges is to build a converged network.

Under current conditions, China Telecom needs to combine the advantages of fixed networks' high bandwidth and signal stability with mobile networks' wide coverage to achieve network convergence and seamless coverage, maintaining consistency in user experience. China Telecom also needs to make network pipes intelligent to ensure the long-term healthy development of the network.

From the user's perspective, users desire a high-bandwidth experience but also hope to access high-bandwidth networks in a seamless, low-cost, and convenient manner. For example, users want to use the same account to experience broadband services such as 3G, fixed networks, and Wi-Fi.

Based on the above understanding, we believe that one of the key factors for the successful implementation of the "Broadband China" strategy lies in the seamless handover between wired and wireless multi-standard networks, namely "Synergistic Broadband."

Achieving network synergy can not only resolve various problems encountered during construction to a certain extent, but also effectively support the development of converged services and create differentiated services in the all-service era.

Excerpt: Communications World Weekly