Cost Efficient Network Experience in China Telecom

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Customer-Oriented Culture Embedded in the Philosophy of

“The Highest Excellence is Like That of Water”

Cost Efficient Network Experience in

China Telecom

Nov, 2013

中国电信香港公司

About CCS - I

2

51.4% 3.41% 8.78% 36.41%

Strategic Partners &

Public Shareholders

CCS is China’s biggest telecom infrastructure service company, with Over 50-year telecom service

experience.

CCS’s foot print has covered 60+ countries/regions, providing professional service for 100+ operators.

Revenue in 2012: 10 billion USD.

TIS - Telecommunication

Infrastructure Services

BPO - Business

Process Outsourcing

ACO - Applications,

Content and Others Integrated

Solutions

Customers Government

Organizations

Global Telecom

Operators

Equipment

Vendors Enterprises

CCS

• China’s biggest Telecom Infrastructure Services Company

• Leading Business Process Outsourcing Company

• A fast-growing Application and Content developer

China Communications

Services Corporation

Limited


澳门

CCS main business regions overseas CCS overseas platform

4

CT overseas platform

With our two overseas business units – CCSI and CITCC, we provide integrated solutions, one-stop services and turn-key projects for Multinational Operators, Vendors and Corporations.

About CCS - II


Telecom Operators are facing challenges from OTT

4

“I knew it was over when I downloaded Skype.” -----FCC Chairman Michael Powell recognized the challenges from Skype and similar services.

100Million USD Telecom operators lose 100Million every day USD caused by skype. (Mobile Squared, 2013)

2

1 85% data volume VS 39% revenue 85% of data volume is pure data, contributes only 39% revenue. (Chetan Sharma,2012)

18 times traffic VS 1.6 times revenue Mobile internet traffic will increase 18 times in next 5 years since 2011. Meanwhile, the revenue will grow 1.6 times. (Cisco,2012) AT&T: 80 times VS 1.5 times

3

1 1.1

1.21 1.33 1.46 1.61 1

1.8 3.24

5.83

10.5

18.8

0

5

10

15

20

2011 2012 2013 2014 2015 2016

Traffic and Revenue Increased Since 2011

Revenue Traffic


CCS’s Proposal: Strategy to Reduce Scissors Gap Between

Traffic and Revenue

5

Increasing Revenue

Reducing Cost

Smart Pipeline

New Public Service

Data traffic control

Smart City Concept

Cloud platform Industry-specific applications

New business mode

CAPEX Reducing

OPEX Reducing

Simplify network structure Telecom infrastructure resources

sharing (Case 4)

Network evolution (Case 1) Cloud computing (Case 2) New technology (Case 3) Energy-saving

emission reduction


Content

6

Case Study: Cost Efficient Network Experience of China Telecom


Cost Efficient Network Case 1: Network Evolution

7

Lasagne Spaghetti

Network is flattening

TDM IP IP IP TDM

Next infrastructure network: FTTx, LTE

All IP Network

Open Service Platform Supporting the third party to develop application

Improving carrier efficiency and reducing cost


Cost Efficient Network Case 1: Network Evolution (continued)

8

Network evolution

All IP Network Evolution

Wireless base station evolution

Core Network: Soft switch replaced TDM equipment

Power saved: 50% Space saved: 60% Weight decreased: 60%

High efficiency and low cost

Power saved: 90% Space saved: no need equipment room, easy to deploy Air conditioner: no need

Compared with metro station, BBU+RRU:

3G distribution base station

IP+TDM Hybrid Network

Case

Case Power divider

BBU


Cost Efficient Network Case 2 : Cloud Computing IDC

9

Asia biggest cloud computing IDC in Inner Mongolia:

Opened in August, 2013

New Technology :

PUE 1.27 1.60

IT Equipment Power kw 30240 30240

IDC Total Power kw 38405 48384

Electricity saved per year kwh 9979

Cost saved per year (Million USD)

13.43

Cloud computing

HVDC power supply system

Accurate air delivery system

Advanced CFD simulation

Ventilation system

Others (Cost-efficient air conditioner system)

中国电信香港公司 10

Cost Efficient Network Case 3 : New Technology in Supporting Facilities Energy Saving

Air conditioner energy saving

Power supply system energy

saving

intelligent ventilation system

Intelligent heat transfer system

Accurate air delivery system

Battery constant temperature cabinet

switching power supply Energy saving

HVDC power supply system

18%

20%

15%

23%

6.5%

19.5%

Clean energy

Polar energy

Wind solar hybrid Power system

Energy Saving Scenario Recommend

1 2

1 2

3

2

2

1 3

1 Telecom equipment room Base station room 2 IDC 3


Cost Efficient Network Case Study: Benefit of cost efficient network

11

504.59

406.2

274.38

171.89

105.18 64.08

-19.50%

-32.45%

-37.35% -38.81% -39.08%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013E

electricity consumption/TB growth rate of electricity consumption/TB

KWH/TB

The annual growth rate of power consumption per unit revenue has been reducedyear by year.

Power consumption per TB has dropped significantly in recent years.

215 274

328 342 345 344 27.44%

19.71%

4.27% 0.88% -0.29%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

-50

50

150

250

350

2008 2009 2010 2011 2012 2013E

electricity consumption/1000USD growth rate of electricity consumption/1000USD

KWH/1000USD

Source: China Telecom, 2012


Cost Efficient Network Case 4: Telecom infrastructure co-construction and sharing

12

Infrastructure Sharing rate

(no less than)

Co-construction rate

(no less than)

Iron Tower 30% 42%

Pole supported transmission line

52% 15%

Base station 33% 30%

Pipeline 50% 16%

Indoor distribution system Co-construction Co-construction

Background: Duplicated construction is serious in China. For example: access fiber utilization is about 30%.

Reduce CAPEX (improve utilization)

Save land

Save energy

Protect environment

Benefit

Requirement by China Government


1.1

2.1

2.5 2.8

17.7%

29.6% 30.9% 31.8%

10.0%

20.0%

30.0%

40.0%

50.0%

0

0.5

1

1.5

2

2.5

3

2009 2010 2011 2012

Cost Efficient Network Case Study: Benefit by infrastructure co-construction and sharing

13

Source: MIIT (Ministry of Industry and Information Technology of China), 2013

Expense saved by co-construction and sharing

Billion USD

Expenditure saved/CAPEX

Infrastructure Unit Joint construction and sharing

Iron Tower Piece 27,000

Pole supported transmission line km 50,000

Transmission line km 79,000

Base station Piece 36,000

Pipeline km 19,000

Indoor distribution system Set 4,000

Source: MIIT, 2012


Summary

14

Building a cost efficient network is becoming a MUST for us

If you would like to know more about us, what can we do for you? then come and visit us at stand F26

Email : [email protected] Tel: +27 116562576 Website: http://www.chinaccsi.com

Contact us


Service coverage in over 60 countries and regions including Hong Kong, Macau, Middle East, Southeast Asia, Africa and America

China Telecom mainly serves Chinese multi-national enterprises, operators and international companies while CCS mainly provides

ICT infrastructure service. The cooperation between the two can provide customers with a total ICT solution.

Tanzania

Egypt

Nigeria

Indonesia

Singapore

Sudan Saudi Arabia

澳门

Cambodia

Ethiopia

Pakistan

Angola

Zambia

Congo (Kin)

Mexico

Cote d’lvoire

Qatar

Venezuela

Brazil

Iran

India

Syria

Kazakhstan Turkey

Malaysia

Vietnam

Thailand

Myanmar

Libya Algeria

Senegal

Cameroon Kenya

Namibia

Zimbabwe

Botswana

Mali Niger

Chad

Morocco

Columbia

HK(CCSI HQ)

Beijing (CCS HQ)

New Zealand

Uzbekistan

Bangladesh

Belgium

Mauritius

Nepal

South Africa

UAE

Uganda

CCS main business regions overseas CCS overseas platform

Sri Lanka

USA

CT overseas platform

Canada

Our Cooperation with CT