Service Innovation: Convergence and Openness

An interview with Lu Ping, President of ZTE’s Communication Services R&D Institute

“Cloud Computing” and “M2M” have been the most frequently touted technologies in the telecommunications industry during 2010. And ZTE has been actively promoting their development. In November 2009, the company held a Cloud Computing Forum in Sanya, southern Hainan Province; and later in March 2010, hosted a Global Partner Alliance Conference at the Beijing International Convention Center in which the “Mobile Internet Partner Alliance” was established. ZTE also worked with Shanghai Telecom to jointly build a smart traffic monitoring system for the World Expo. As a result of closer cooperation between the telecom industry and other industries, operators today are faced with changing operation models and ideas. How will ZTE adapt to the changing face of the industry and its customers? Lu Ping, President of ZTE’s Communication Services R&D Institute, was recently interviewed by journalist Fang Li. 

Journalist: ZTE’s Communication Services R&D Institute has insisted on service innovation for years. What have been some of its achievements? How does the institute create sustainable innovation?

Lu Ping: Innovation is the DNA of ZTE’s Communication Services R&D Institute. In recent years, the institute has been adhering to the “iFAST” management concept to rapidly develop innovative, smart, stable, and cost-effective products. In fact, the “i” in “iFAST” represents innovation—in technology, service, business model, and R&D model—and is focused on the following:

First, we have set up an end-to-end service innovation procedure where R&D is guided by market-driven pre-research. Through this process, we can make good use of new technologies for new service cooperation with high-end operators. Already we have cooperative partnerships with China Mobile and the State Administration of Radio, Film, and Television on CMMB mobile TV.

Second, we have intensified external exchanges and cooperation. ZTE has held high-end technology forums and invited all parties in the industrial chain to actively discuss development trends of new services and technologies. In 2009, we successfully convened two Mobile Internet Meetings, and one Cloud Computing Forum; and more recently, participated in the Second China Cloud Computing Conference and joined the Cloud Computing Experts Association. We have also built strong cooperative relationships with many universities in China—including Tsinghua University, Peking University, and Beijing University of Posts and Telecommunications—in the fields of Cloud Computing, P2P, and CDN-based scheduling. As well as technological innovation, we have innovated with business models. ZTE held the first Global Partner Alliance Conference this year and signed agreements with Sohu, Sina, ifeng, IBM, and HP, to jointly drive the growth of mobile Internet. 

Third, we have employed high-end talent to maintain and strengthen our capabilities. In emerging business areas such as Cloud Computing and mobile Internet, ZTE has sourced network architects from highly successful Internet enterprises within China.

Through continuous innovation, we continue to achieve results in IPTV, M2M, CMMB mobile TV, and service network architecture. We have cooperated closely with China Telecom, helping Jiangsu Telecom expand its IPTV subscriber base from tens of thousands to more than a million. According to a research report by Frost & Sullivan in 2009, ZTE ranked first in the Asian IPTV middleware market and third in the global market. We also lead in CMMB mobile TV; and in 2010, had an exclusive agreement with China Mobile and the State Administration of Radio, Film, and Television to deliver mobile TV services over the CMMB platform for World Expo and the FIFA World Cup. In the field of M2M, ZTE has launched an integrated M2M service support platform consisting of sensors, RFID, communication modules, terminals, and applications. A vehicle management system was supplied to China Telecom for Expo 2010, and an M2M base was constructed for them also. In the field of service network architecture, we have rolled out Converged Service Network (CSN)—the next-generation service network platform—and joined hands with domestic operators to initiate an ITU-T project aimed at solving problems in service convergence and openness for heterogeneous networks.

J: What are the features of CSN? And what specific problems can it solve?

Lu: CSN represents a development trend for service networks. It is a target service network architecture, first proposed by ZTE to meet requirements for full-service operation. The core of CSN lies in abstracting all network resources for the purposes of data, service, and capability convergence, as well as unified operation and management. In this way, a variety of value-added services can be provided in a prompt manner. This helps operators get an upper hand in the value chain.

Key issues addressed by CSN include unified data access and control, division and reuse of services and capabilities, converged management and monitoring, rapid service creation and deployment, good scalability, QoS guarantee, billing functions, and flexible business models.

ZTE has made its CSN achievements known to international standards organizations. In May 2009, ZTE initiated a NG-SIDE project in ITU-T; and with the support of the China Academy of Telecommunications Research (CATR), carried out the related application discussion in the China Communications Standards Association (CCSA). We will cooperate in-depth with industry leaders in areas such as CSN service and capability provision, resource access and control, and integrated development and test platform, with the view of building CSN into a support platform for service growth in the future.

J: Mobile Internet has gradually come into the focus of operators in their business innovation. What are the features of mobile Internet? Are there any “killer” application services in the era of mobile Internet?

Lu: Mobile Internet does not imply the simple addition of mobile networks to conventional Internet. The predominant feature of mobile networks is communication anywhere and at any time, while that of the Internet is full participation and openness. How, then, can these features be integrated? Compared to the conventional Internet, mobile Internet has two key differences: each user has an identity, and each user has their own location. With these two features, many services can be deployed. In mobile payment, for example, a user’s mobile phone represents their ID.

Mobile Internet is also different from conventional telecom value-added services. The latter has a simple business model involving service Fulfillment, Assurance, and Billing (FAB). But in mobile Internet, the business model is Come-Stay-Pay (CSP)—attracting users, keeping users, and completing payment. When developing mobile Internet services, a single profit model must be changed into a flexible one; for example, offering free basic services while charging for value-added services (or back-end charging).

There are no “killer” application services in mobile Internet, because mobile Internet provides personalized services and is concerned more with market segmentation by customer needs. How to roll out services for specific customer groups has become a major concern of operators.

J: From a technological perspective, what are the challenges of large-scale deployment of mobile Internet services?

Lu: The first challenge is openness of terminal devices. Mobile Internet terminals are different from those of traditional Internet. The latter are mostly PCs running on the Windows operating system. Mobile phones, however, have many operating systems with different capabilities. This creates obstacles to popularizing mobile Internet services. We have two solutions: launching an application platform running on different operating systems, and introducing Cloud Computing to mobile Internet so that more complex processes can be handled in the cloud and mobile phones need only function as simple input devices.

The second challenge is basic network capability. Currently, the speed of Internet connection via mobile phone is relatively slow due to restrictions in the phone battery and spectrum occupation. It is still very difficult for mobile phones to remain permanently online. Enabling mobile terminals to rapidly access Internet might involve deploying a CDN caching device in the vicinity to speed up the access rate.

The third challenge is network security. For mobile Internet to succeed on a large scale, network security must be top priority. This implies unified network authentication, network security protection, terminal security protection, and virus prevention. Requiring every service provider to have strong authentication is not feasible, so operators need to establish a unified authentication center to open their capabilities and services.

The final challenge is how to tap into vast data resources to offer more attractive services. Mobile Internet features personalized services and customer segmentation. It is therefore critical to analyze user behavior from massive amounts of data and roll out custom-made services for a specific market segment.

J: What preparations have you made in Cloud Computing, and what are the problems of large-scale Cloud Computing applications?

Lu: Internet enterprises introduce Cloud Computing as a solution to problems concerning cost, large-scale deployment, and heavy traffic in their business development. Future key services will also be focused on mobile Internet. It is therefore urgent for these enterprises to introduce Cloud Computing technologies.

Our Communication Services R&D Institute has been conducting research into key Cloud Computing technologies and related platform planning. At the Second China Cloud Computing Conference held in May 2010, ZTE was the first to put forward three core technologies of Cloud Computing: distributed structured storage, distributed file system, and virtualization technology. At the same conference, ZTE also launched its “CoCloud” platform. CoCloud is designed to converge and open up all telecom and Internet capabilities, and offer a variety of colorful, innovative, and converged services. The platform delivers application services at three levels:  IAAS, PAAS, and SAAS.

However, two issues must be addressed for large-scale Cloud Computing applications. The first is the creation of standards that will help realize interoperability and provide fast application migration. ZTE is working with the China Cloud Computing Experts Association and relevant organizations to drive the standardization of Cloud Computing. The second issue is mobile security and trusted computing. If the processing center is located in the cloud, the trust relationship between customers and the cloud computing service provider becomes very important. Customers must be willing to put important or sensitive data in the cloud. Through close cooperation with CATR and China Mobile, ZTE completed an ITU-T research project on Cloud Security Needs and Framework for Telecom Services in April 2010. The project adopted a differentiated, on-demand security strategy for complete security analysis and research into the cloud-based telecom service environment.