ALU Huawei LTE RAN Analysis

LTE Competitive Analysis Huawei’s LTE RAN

June 2010 Al Williams LTE Portfolio Management Team [email protected]

Huawei LTE RAN Competitive Analysis Contents

1 Executive Summary – Quick overview of position, product and differentiation. 2 Market Position – Relative ranking, contract/trial activity, share, etc. 3 RAN Product 3a Baseband/Radios – Details on each element in the portfolio 3b Configurations – High-level view of macro, distributed eNodeB, micro, etc. 3c SingleRAN/Evolution – How does the eNodeB support multiple technologies and evolve?

4 How Do We Win? – Huawei strengths/weaknesses vs. ours; How do we attack them? 5 For Further Information – Pointers to other resources This document is updated regularly. You can find the latest version plus other documents about our LTE RAN competitors on the Wireless Marketing Toolbox. http://wireless.app.alcatel-lucent.com/marketing_toolbox/competitive_intelligence/lte.htm 2 | Huawei LTE RAN CI | June 2010

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Version History Date

Changes

Oct 13, 2009

Initial Version

June, 2010

Major update: Addition of exec summary, rewrite of market section, updates of product sections, addition of selling points throughout.

3 | Huawei LTE RAN CI | June 2010

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1

Huawei‟s LTE RAN Executive Summary

Executive Summary Huawei Intends to Win Huawei’s goal is to become the #1 LTE vendor in the world. Is this a reasonable goal? Consider three key points regarding Huawei: 1. Huawei’s wireless growth has been rapid – providing a strong base for LTE 2. Huawei SingleRAN meets our customers’ LTE need – and drives them to demand converged RAN 3. Most analysts are picking Huawei in the top 2 in LTE – ahead of Alcatel-Lucent

Given their current position, it seems that their goals are reasonable. But Huawei can be beaten – they are not without fault or flaw. The LTE market is young enough that anything can happen and momentum can be changed. We must attack them head-on to be sure they don‟t establish a strong foothold. This package explains Huawei‟s product and position – then addresses “How do we compare?” and “How do we counter?”

Yes, Huawei has strengths:

• A well defined purpose, strong execution/speed, low costs, ability to throw people at their problems, deep cash reserves and financing, simple/straightforward products, etc.

But Huawei also has weaknesses:

• A low reputation, out-of-control growth, weak services division, not enough local staff, security concerns, still too dependent on Chinese market, etc.

We CAN beat them 5 | Huawei LTE RAN CI | June 2010

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Executive Summary Huawei’s Rapid Wireless Growth Provides a Strong Base Huawei: Company Revenues – 2001 to 2009

Huawei’s Growth:

Target: +20% for 2010

Financials  Most telecom vendors struggled in 2009, yet Huawei had strong increase in revenues  Huawei targets 20% increase again in 2010

Market share  In 3 years, Huawei has risen from a small player to #3 rank in the RAN infrastructure market  Strong share in all technologies  Only weak spot is the NAR region

Huawei: RAN Market Share – 2007 to 2009

2007

2008

2009

Total

4.1%

10.3%

18.1%

GSM

5.7%

10.6%

19.5%

CDMA

1.6%

5.8%

16.4%

WCDMA

3.2%

15.0%

19.1%

Why is this Growth Relevant to LTE?

• It demonstrates credibility to potential new customers. • It deepens relationships with existing customers. • Increased scale provides volume to keep costs down. • Recent 2G/3G deliveries are on SingleRAN - easier LTE upgrade path for these operators. Alcatel-Lucent’s small WCDMA embedded base is often cited as a weakness in our LTE story. See Section 2 for more on market share and financials. 6 | Huawei LTE RAN CI | June 2010

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Executive Summary SingleRAN Drives the Customers’ Need and Drives Converged RAN BTS3900

Distributed Node B

Macro Node B

• BTS3900 is Huawei‟s only base station for all wireless applications. • It supports GSM, CDMA, WCDMA, TD-SCDMA, WiMAX, and LTE FDD/TDD. • It was released in 2008 and has already been deployed broadly for 2G/3G.

Indoor Outdoor BTS3900

Micro Node B

DBS3900

BTS3900C

BTS3900 (WCDMA+LTE)

SingleRAN • SingleRAN is a brand/concept name. • The BTS3900 supports multiple RF technologies from same cabinet at the same time. • A customer can deploy an earlier technology, then adopt newer technologies via software upgrade and/or addition of new HW boards. • One OA&M system manages all technologies.

WWW C C C L L L D D D T T T MMM E E E A A A

Any RF technology can be plugged into any slot.

Baseband unit supports any 2 RF techs at same time

“Converged RAN” has become a demand by key customers Huawei is commonly credited with its rise, but ZTE, Ericsson, NSN‟s products also support it. Converged RAN has several key advantages for the vendor: • Earlier sales: “Can‟t decide on HSPA+ or LTE? No worry, just buy our SingleRAN and you can upgrade when you‟re ready.” • Easier LTE upgrade pitch: “Now that you have SingleRAN, you can add LTE easily without an overlay.” • Network refresh opportunities: “SingleRAN saves OPEX. Swap out your old – save money, be ready for the future.” See Section 3 for more on LTE eNodeB and SingleRAN. 7 | Huawei LTE RAN CI | June 2010

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Executive Summary Huawei is an Early Leader in LTE … Picked ahead of ALU Analyst Opinions Analysts reflect market perception, but they also can influence operator decisions. What they say matters. • •

IDC commented in April: “The rest of the vendor community will have to play catch up to Ericsson and Huawei.” Gartner also ranked Huawei high, particularly in their ability to execute (see the chart on the right). Source: Gartner

Operator Engagements • In October, Huawei claimed to have 25 trials – since then the number has risen to 60! •

Huawei claims 10 contracts ???

Certainly, this number includes some creativity (double counting, including lab trials,etc.) But what the market hears is that Huawei is very active.

• Now, the announcements have shifted to contracts. •

Again, Huawei‟s claim is high and careful study shows that they aren‟t all real contracts. Yet analysts believe the number and report it as fact.

1

TeliaSonera

Lost

2

Telenor (Norway)

Contract

3

China Mobile

Trial

4

Proximus (Belgacom)

“LTE ready”

5 6 7

Net4Mobility (Sweden) T-Mobile Zain (Saudi Arabia)

Contract ?? Trial

8

Wind (Italy)

Contract

9

MTS (Uzbekistan)

Trial

10

MTS/K-Telecom (Armenia)

“LTE ready”

Analysts have picked Ericsson and Huawei as the LTE winners Really? Huawei‟s trial number isn‟t believable. Their contracts aren‟t all valid, nor are any of them as important as Verizon and AT&T. A few analysts see cracks in Huawei‟s story.

We’re working with IDC, Gartner, and other analysts to improve their view of Alcatel-Lucent. See Section 2 for analyst opinions and trials/contracts. 8 | Huawei LTE RAN CI | June 2010

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Executive Summary How do we Beat Them? Huawei is a formidable competitor … but not unbeatable. Do not misunderstand: Huawei is delivering a quality product in a timely manner with good prices. In order to win, we will have to work every opportunity that we can. We will have to show the value of our solutions and show the value of partnering with Alcatel-Lucent. Beating them requires that we know them well and attack them head-on: • Sales: (1) Attack specific Huawei weaknesses, (2) Question their value as a partner (spread FUD) • PM/marketing: (1) Fix our product gaps, (2) Meet Huawei head-on in the marketing wars Regarding Huawei:

ALU perspective:

• Can they keep up with the growth and still satisfy their customers? • How fast are they really growing? Financials and shipments are based on Huawei statements. • Prove it! Is converged RAN really as important as SingleRAN Huawei says? • Evolution isn‟t as simple as they say. Huawei still needs a HW change in most upgrades. • Is their success real? Can they convert marketing Early LTE wins to major customer wins?

Rapid Growth

Success

• We‟re turning the corner on our financials. We also have a strong embedded base on which to build. • Huawei hasn‟t shown added value – so far, they‟re mostly pipe building. Our approach is different. • Others are catching up. Huawei had an early advantage, but the rest of the vendors can now offer it too. • We are reworking our converged RAN solution to put us even or ahead of Huawei. • Win, Win, Win. We have to add to the Verizon and AT&T success with major wins in other regions. • Fight marketing with marketing. E.g. can we increase our trial/contract numbers by creative counting?

These are high-level, broad ideas. Throughout the rest of this document, you’ll find specific counterpoints to Huawei’s strengths and ideas for how to attack them. Section 4 provides a comprehensive summary. 9 | Huawei LTE RAN CI | June 2010

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2

Huawei‟s LTE RAN Market Position

Huawei LTE Market Position Introduction Huawei is a top tier vendor – possibly #2 Analysts rank Huawei among the leaders: •Their SingleRAN solution is a game-changer and market factor •They have a rapidly growing base of 2G and 3G networks – mostly built on SingleRAN •They have a large number of LTE trials - at least that‟s what they claim •They have at least two significant LTE contracts – maybe more What Huawei is missing is a flagship LTE sale: •Huawei did not win any of the first Japanese contracts (Docomo and KDDI)

•Huawei did not win either of the first two big US contracts (Verizon and AT&T) •Huawei will get a large piece of China Mobile, but that won‟t launch until late 2011 at the earliest To remain among the leaders, Huawei must win one of the big European-based operators: •Vodafone, Telefonica, T-Mobile, etc.

This section describes Huawei’s current position – and digs beneath the surface. 11 | Huawei LTE RAN CI | June 2010

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Huawei LTE Market Position What the Analysts are Saying The rest of the vendor community will have to play catch up to Ericsson and Huawei. IDC, April 2010

By many analysts‟ tallies, Huawei is creeping up on No. 1 infrastructure supplier Ericsson, particularly in the LTE equipment sector. That‟s partly because the scions of telecom, including Nokia Siemens Networks (NSN), Nortel Networks, Alcatel-Lucent and, yes, even Ericsson, have a hard time pricing their products as low as Huawei does. Thanks to these factors, Huawei is landing major 3G and 4G deals around the world – much of the reason it expects an almost 30 percent increase in sales for the year. And Huawei is making headway not just in emerging markets like Africa, but in areas where NSN, Nortel, AlcatelLucent, Ericsson and others tend to reign. Press report Jan10

The race is on with traditional market leader Ericsson taking the early lead and fast rising Huawei in aggressive pursuit. IDC, April 10.

Huawei is likely to gain a good share of the LTE infrastructure market, with more early momentum than it had in the 2G/3G sector. Gartner, May 2010.

Huawei, ZTE … are pretty much shoo-ins for a large percentage of the [China Mobile TD-LTE] contracts. SRG, June 10.

Reading these reports makes you believe that ALU and NSN are in a battle for 3 rd place. •Danger: Analyst opinions can shape our customers’ initial opinions. •Reading deeper into the reports, much of their opinions are based on information provided by Huawei! •Our analyst relations team is working to shape the analyst opinions to be more favorable to ALU. 12 | Huawei LTE RAN CI | June 2010

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Huawei LTE Market Position LTE Trials Huawei claims to have 60 LTE trials. This shows the ongoing trials we can identify. Note they are active in all regions.

T-Mobile Trial

Vodafone Trial US Cellular Trial Cox Trial

TMN Trial

Mobilkom Trial Swisscom Trial

China Mobile Expo (TDD)

Telefonica Trial Softbank Trial

Telecom Italia Trial

Cricket Trial

CMCC-HK Trial

Zain Trial STC Trial

AMX Trial

KEY Trial (public) Trial (rumored)

MTS Uzbek. Trial Etisalat Trial

Maxis Trial

Telstra Trial Singtel Trial

Huawei‟s claim of 60 trials compares to 45 from ALU, 45 from E/// and 25 from NSN. • We believe Huawei‟s number is inflated - including lab demos, double-counting, etc. ALU has fewer claimed trials, but we are certainly not behind: • In US, we have as many trials + two big awards • In China, we‟re working with both CMCC and CT – Huawei only CMCC • In Europe, we have 10 placements vs. their 11

13 | Huawei LTE RAN CI | June 2010

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Jan 2010

Huawei LTE Market Position LTE Contracts Huawei claims 10 “LTE commercial contracts” • The list on the right shows the 10 we think they’re talking about. Not all are legitimate. • Note that Huawei’s claimed number is 2nd only to NSN. We don’t think NSN’s number is valid either. • Note the impact of SingleRAN in the contract awards.

Operator

Assessment

1

TeliaSonera

Replaced by NSN

2

Telenor (Norway)

Significant win

3

China Mobile

Shanghai Expo

4

Proximus (Belgacom)

“LTE ready”

5

Net4Mobility (Sweden)

Significant win

T-Mobile

??

Vendor

Contracts claimed

ALU

3

E///

5

6

Huawei

10

7

NSN

12

8

Moto

2

9

ZTE

5

10

Comments

Huawei won phase 1 (with E///) and reportedly Phase 1: 01-09 performed well. However in phase 2 bidding, NSN bid Phase: 01-10 lower and replaced Huawei. Huawei will provide LTE as well as large-scale modernization of 2G/3G networks. Value €170M over 6 years. Huawei won based on “technical quality, November 2009 reliability and commercial terms”. Telenor says this partnership could extend to other Telenor properties outside Norway. Huawei lists China Mobile as a “commercial customer”, November 2009 but the only activity right now is the Shanghai Expo – we don‟t think Huawei is being paid for it. Huawei will upgrade the entire network, starting with 2G and 3G. No dates given for deployment of LTE. Huawei is sole winner of LTE network that will cover all of Sweden by end of 2013. Also includes expansion December 2009 of GSM network by 30-50%. Ericsson claims Huawei won on price, not superior performance. Huawei and NSN reportedly will win T-Mobile Germany April 2010 business, but no public announcement … and no contracts signed yet.

November 2009

Zain (Saudi Arabia) Wind (Italy) MTS (Uzbekistan)

Trial only

May 2010

Significant win

June 2010

Trial only?

October 2009

MTS/K-Telecom (Armenia)

“LTE ready”

??

Only 3 on Huawei‟s list are confirmed and represent true, near-term LTE contracts. 14 | Huawei LTE RAN CI | June 2010

Award date

Huawei built an “experimental LTE network” for Zain. (So did Motorola and Ericsson.) Rollout of HSPA and LTE networks – plus IMS, fiber, network design/build. Huawei building trial network. No announcement of commercialization of LTE. Huawei supplies 3G equipment to MTS in Armenia. When LTE network is built, Huawei will get the business.

SingleRAN a factor?

Yes

Yes

Yes

Yes

Yes

Yes

See “LTE CI Market Position” in marketing toolbox for other vendors’ contract lists. http://wireless.app.alcatel-lucent.com/marketing_toolbox/competitive_intelligence/lte.htm

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Huawei LTE Market Position 2G/3G Market Share 2G/3G Market Share is an important predictor for future LTE sales. This is particularly true for Huawei sales of the last 2 years, because these networks have been delivered on the SingleRAN platform – allowing an easier transition to LTE.

Huawei: Significant uptrend over last 3 year, but are they finally flattening out?

ALU: We rose in a declining market, the only vendor to increase.

Sources: Dell‟Oro and internal

Be careful with market share and financial results for Huawei. Since Huawei is not publicly traded, getting hard numbers on shipments/revenues is difficult. They are often overstated. Note the discrepancy within a single news report in January 2010: •“Global telecom major, Huawei Technologies claims achieving the number one spot for wireless base station shipments in the year 2009 overtaking market leader Ericsson.” •“Its market share in the global telecom gear market stood at 20.1% at the end of Q3 2009 as compared to market leader Ericsson’s 31.6% as per market research firm, Dell’Oro Group.” 15 | Huawei LTE RAN CI | June 2010

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Huawei LTE Market Position Is SingleRAN Fueling 2G/3G Growth? The BTS3900 was launched in 1Q 2008 •This makes Huawei the first vendor to deliver a “next gen base station” •Huawei is delivering most new GSM, CDMA and WCDMA networks via the BTS3900 family •New BTS3900s are being portrayed as “LTE Ready”, whether LTE is planned or not. •If today‟s deployments are engineered right, LTE HW can be inserted in empty slots •This builds a base of networks that should be “easy wins” for Huawei in LTE

Deployment status •According to Huawei, 30 operators have adopted the BTS3900 over 50,000 sites. •Industry analysts have slightly more conservative figures: –Current Analysis says 10,000 units were deployed by April 2009 –TBR says 1.5 million TRXs were shipped by June 2009

Customers who are Reportedly Deploying the BTS3900

•Telfonica-O2 (Germany) •Axis (Indonesia) •Telus/ Bell Mobility •Vodafone •America Movil •T-Mobile •Chinese operators 16 | Huawei LTE RAN CI | June 2010

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Typical exaggerated claim from Huawei

Huawei LTE Market Position … Or will 2G/3G Renovation Fuel LTE growth? awarded to Huawei

LTE contract awarded to Huawei

LTE contract awarded to Huawei

Feb 2010

17 | Huawei LTE RAN CI | June 2010

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Huawei LTE Market Position How to Attack their Position? Strengths

Issues

•Aggressive behavior

• Poor Reputation

• Low prices, high promises • Rapid expansion of 2G/3G base • Chinese base and backing provide safety net

• History of inconsistent performance; Credibility issues • Security concerns from government and business • Exaggerated trial/contract counts are normal

•Product

• Can they Win the Big Ones?

• SingleRAN provides entry, with promise of LTE

• Often included in bids simply to lower the price • Will major operators be willing to depend on them?

•Market performance • Contract wins lend credibility: Telenor, Net4Mobility • Trial participants everywhere

• Rapid growth • Will it put pressure on already weak services business? • Can they maintain their low-cost profile while supporting multiple markets and multiple generations?

Not everyone loves Huawei! Read these comments from Gerson Lehrman Group in April 2010 “Huawei is going to implode and in a BIG way! Here are 5 reasons: 1. 2. 3. 4. 5.

Giving away free mobile network hardware to win contracts does win new operator customers but that doesn't mean the mobile operator loves you. They don't. They actually can't stand your presence within their network but you just saved them over $300+ million for a national mobile network. Customer relationship can not be performed by a dedicated team that doesn't speak to the rest of the Huawei organization… Arrogance killed Alcatel, Nortel and Lucent...trust me it will kill Huawei too! Hiring new employees at a growth rate of 100% every 6 months leads to inefficiencies and stagnation … Mobile operators will absorb all your new ideas and strategies but will not invest their future in you unless you’re willing to give it all away again for free.”

18 | Huawei LTE RAN CI | June 2010

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3

Huawei‟s LTE RAN Product Description

Huawei LTE RAN Product Description Introduction Huawei introduced SingleRAN (converged RAN) to the marketplace. Now it has become a key factor in operator selection of vendors. • The SingleRAN concept says one platform can support all RF technologies • Huawei‟s base station is called the BTS3900 • It supports GSM, UMTS, CDMA, TD-SCDMA, WiMAX and LTE • The BTS3900 has been shipping for 2G/3G since 2008; LTE is being added now • Huawei LTE delivery is in a similar timeframe to E/// and ALU; a little ahead of NSN • Huawei will support both FDD and TDD on SingleRAN • The TDD delivery roadmap is 3-6 months behind FDD

The other leading vendors also offer converged RAN for 3GPP RF (GSM, WCDMA, LTE). • Only Huawei and ZTE cover all leading RF technologies. • The difference is in the details – OA&M support, shared antennas, how many boxes required, etc. 20 | Huawei LTE RAN CI | June 2010

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Huawei LTE RAN Product Description Portfolio Overview The BTS3900 is Huawei‟s LTE eNodeB • All configurations are based on three common units (BBU, RFU, RRU) • Supports GSM, W-CDMA, CDMA, TD-SCDMA, WiMAX and LTE • Single OA&M system works with any RF technology • BTS3900 first introduced in 2008; 2G/3G base stations already deployed Distributed Node B Micro Node B Q2 2009

Macro Node B

Multi-mode BTS

Q1 2010

BTS3900C

DBS3900 BTS3900 BTS3900A (Indoor) (Outdoor)

RRU

RFU

BBU

Huawei presents this as a complete, fully flexible portfolio. Two counterpoints: • Only the distributed eNodeB was available in the first LTE release – macro, micro later • Only two RF technologies can be supported at one time in a BBU – more than 2 require 2nd BBU See Sections 3a/3b for more details on BTS3900 21 | Huawei LTE RAN CI | June 2010

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Huawei LTE RAN Product Description SingleRAN Concept SingleRAN is Huawei‟s marketing story re: BTS3900 evolution • The idea is that you can deploy multiple networks using a single design/platform (e.g. GSM + UMTS) • After deploying one technology, you can evolve the base station to add a 2 nd (see diagram) • Advantages of SingleRAN: 1. Single BTS for multiple technologies simplifies OA&M, wiring, backhaul, real estate, etc. 2. BTS3900 is a modern/green base station, so it will be more cost effective than the old equipment 3. Operator can deploy BTS3900 today – and decide which next-gen technology to use later 4. Once BTS3900 is deployed for one technology, adding a second is cheap and easy (no overlay) Adding LTE to G+U network: • Simple: Add new LTE RF boards and new baseband boards. • However: There wasn’t room left, so a 2nd macro had to be stacked on top. • Still have advantage: Footprint, OA&M

Adding UMTS to GSM network:

• Simple: Add new UMTS RF

boards and new baseband boards. • However: You had to preengineer the network at half-capacity to be able to do this.

Huawei was first to market with SingleRAN – but other vendors offer similar advantages. For example, Cosmote says Huawei SingleRAN saved 70% in footprint and 60% in energy over their old GSM/UMTS equipment. This is true, but similar results would come from using anyone‟s new equipment. See Section 3c for more details on SingleRAN evolution. 22 | Huawei LTE RAN CI | June 2010

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Huawei LTE RAN Product Description BTS3900 LTE Roadmap 1Q

2009

2Q

2010 3Q

4Q

1Q

2Q

3Q

4Q

1Q

2011

2Q

FDD

2009

2Q

• Pico eNodeB

• Macro eNodeB • MBMS • RAN sharing • 100 km cell radius • Rx diversity • ICIC • Enhanced SON

• Distributed eNodeB • RRU 3201 • 700/AWS/2600/850/900/ 1900 • 5/10/15/20 MHz • 15km cell radius • Basic SON

1Q

eRAN3.0

eRAN2.0

eRAN1.0

2011

2010 3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

TDD eRAN1.1

eRAN1.0

• Distributed eNodeB • 2300, 2600 (trial only) • 10/20 MHz • 2T2R RRU • 2x2 MIMO • FDD->TDD BBU upgrade • Basic SON

• 2300/2600 • 5/10/15/20 MHz • 4x2 MIMO • Enhanced SON

eRAN2.0

• Micro eNodeB • 4x4 MIMO • TD-LTE to TD-SCDMA handover • VoIP

These roadmaps are based on limited information. More to come … Note that TDD is first released about 6 months after FDD. 23 | Huawei LTE RAN CI | June 2010

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Huawei LTE RAN Product Description OA&M The iManager M2000 is Huawei‟s Element Management System Functions include data configuration, alarm monitoring, performance monitoring, software upgrades, etc … classic functions for an EMS. • Huawei is very clear that the M2000 allows you to run your SingleRAN (2G/3G/LTE) networks from one place, using one team of people. • "iManager M2000 is the unified platform that provides centralized management to all wireless technologies of Huawei, including GSM, UMTS, CDMA, WiMAX, LTE and more.” • Another reference says the M2000 platform also manages the EPC and IMS.

Basic SON Functionality (eRAN1.0) • Huawei tested so-called “SON Phase 1” in a trial with T-Mobile Austria during late 2009. Reports seem to indicate that this basically included only Automatic Neighbor Relations (ANR).

Enhanced SON Functionality (eRAN2.0) includes: • Automatic configuration • Automatic Neighboring Relation • Automatic detection of Physical Cell Identifier (PCI) conflicts, sleep cells, and antenna faults • Mobile Robust Optimization (MRO)

Huawei is delivering it‟s OA&M capabilities in stages – in a similar timeframe as all LTE vendors. Huawei may have an edge with the single OA&M system that runs 2G, 3G and LTE. 24 | Huawei LTE RAN CI | June 2010

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Huawei LTE RAN Product Description Caution The following sections give detail on Huawei‟s LTE/SingleRAN product offer and should help the reader to clearly understand what operators will get from Huawei.

Some of the information comes from Huawei, thus it is reliable only “in theory”: • In other words, it clearly describes what they are promising. • It doesn‟t necessarily describe what they will actually deliver. We often get comments from field trials that Huawei has used prototypes or has adjusted parameters to ensure successful results. For example, one customer commented that: “Huawei used March 09 alignment (instead of the required June 09) and their mobile is not compliant with 3GPP Cat 3 definition.”

While this practice is not unusual (for any vendor), it is particularly common in this fast-paced LTE market where customers want everything sooner than vendors are ready to deliver. Pay attention to the red boxes on each page – they provide the ALU counterpoint to Huawei‟s claims.

25 | Huawei LTE RAN CI | June 2010

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3a

Huawei‟s LTE RAN Baseband/Radio

Huawei LTE Elements BBU3900 Baseband Unit The BBU3900 is the digital baseband unit for the BTS3900 family and is used in all configurations. It supports one or two technologies simultaneously (GSM, CDMA, WCDMA, TD-SCDMA, WiMAX, LTE). The BBU3900 is 2U high, 310mm deep and 19” rack mountable. Macro Outdoor

Macro Indoor

BBU

Distributed

27 | Huawei LTE RAN CI | June 2010

Micro

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Huawei LTE Elements BBU3900 Control and Modem Cards The BBU3900 chassis has eight slots into which different cards will be inserted based on the technologies being supported. A working BBU will require a control card plus multiple modem cards. (Some technologies will also require other special-purpose cards.) The LTE control card is the “LMPT”

•The LMPT goes into slots G or H • Two can be equipped for redundancy •The LMPT has built-in FE/GE opt/elec interfaces

The LTE modem card is the “LBBP” F A N

F A N

A B C D

LBBP LBBP LBBP

E F G H

PWR PWR

PWR

•The LBBP goes into slots A through F •Each LBBP card has 6 CPRI interfaces, but only 3 are used currently •Note: In the first release of Huawei‟s LTE BBU, the modem cards were double-height. In the second release, they are now normal (single) height

Each RF technology requires its own unique control and modem cards

•Slots A to F will be used for modem cards,

transmission cards and lightning protection cards, so LMPT you normally can‟t use six slots for modems NOTE: The Huawei BBU supports many RF technologies, but only 2 at one time. Why? Because there are only 2 slots in the BBU that can contain control cards.

28 | Huawei LTE RAN CI | June 2010

PWR

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Huawei LTE Elements BBU3900 LTE-only Specifications Capacity

• Cells per LBBP: 3, each 2x2 MIMO @ 20 MHz • 172 Mbps DL/57 Mbps UL per UE Specifications

• Size: 84 x 446 x 310mm (HxWxD) • Weight: 12 kg (full configuration) • Power supply: -48VDC, +24VDC • Power consumption: 250W max • Temp range: -20 to 55 C F A N

LBBP LBBP LBBP

LMPT

PWR

Interface with RRUs

PWR

Transmission Interfaces

• CPRI connection at up to 2.4 Gbps • 2xFE/GE electrical • 2xFE/GE optical

The BBU3900 above is the maximum configuration for an LTE-only installation. In fact, only 2 LBBPs are required for a fully equipped LTE macro. See Section 3c for mixed-technology examples. 29 | Huawei LTE RAN CI | June 2010

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Huawei LTE Elements Radio Unit Choices Huawei provides two configurations for LTE radios – both are supported by the BBU3900: 1. Radio units (RFUs) are housed in a macro cabinet 2. Remote radio heads (RRUs) are mounted at some distance from the BBU  RRU3201 – LTE only  LRFU – LTE only Capacity: 2 carriers Output: 2 x 40W Frequencies: 700/AWS/900/1800/2600 Availability: Q1 2010

 mRFU – GSM/WCDMA/LTE Capacity: 2 LTE carriers Output: 2 x 40W Frequencies: 900/1800/850/1900 Availability: H2 2009 (for GSM/WCDMA)

** Huawei‟s FCC filing for the RRU3201 says 2x40W, but recent marketing info says 2x20? 30 | Huawei LTE RAN CI | June 2010

Being replaced by RRU3203?

Capacity: 2 carriers Output: 2 x 40W ** Frequencies: 2600/700/AWS Availability: Q2 2009

 RRU3808 – WCDMA/LTE Capacity: 2 LTE carriers Output: 2 x 40W Frequencies: 2100 Based on WCDMA RRU 3804 Availability: Q3 2009 (LTE)

 RRU3908 – GSM/WCDMA/LTE Capacity: 2 LTE carriers Output: 2 x 40W Frequencies: 900/1800/850/1900 Similar function to an mRFU Availability: Q2 2009 (GSM/WCDMA)

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Note each RRU has a different form-factor.

Huawei LTE Elements LRFU/mRFU Macro-based Radio Unit The BTS3900 macro base station has six slots for radio units (RFUs). There are different flavors of RFUs to support different RF technologies (GSM, CDMA, WCDMA, LTE). The most recent development is the mRFU which can be software programmed to support either GSM and WCDMA - it will be extended to also support LTE.

Specs:  WCDMA RFU: 4 carriers, 80W total

 mRFU: 3 carriers, 60W  LTE RFU: 2 carriers, 40W each

Note: The availability dates for LTE support on mRFU are soft. We’ve seen 2Q09, 3Q09 and 2010. The confusion probably is because it will be available for GSM/UMTS first – with LTE added in the future. In the meantime, they will use the LRFU (LTE only).

31 | Huawei LTE RAN CI | June 2010

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Huawei LTE Elements RRU3201/RRU3203 LTE Remote Radio Head The RRU3201 is Huawei‟s original LTE RRU and has been used in early deployments.

In May 2010, Huawei filed a report with the US FCC for the RRU3203. This new RRU looks identical to the RRU3201, with minor specification differences (see below). RRU3203 differences

Twin TRX:  Two Tx, two Rx, one feedback channel  Each channel supports one carrier

Output power:  40W per antenna port  Measured: 36.3W to 37.2W

Other Specs:  Frequencies: 700/AWS/2600  Bandwidths: 5/10/20 MHz

Only 700 filed with FCC 1.4MHz -> 20MHz

 Size is different for 700 vs. AWS We don’t have a good explanation yet for why Huawei released a new RRU – rather than just a new version of the 3201. Could there be contractual obligations requiring Huawei to retrofit 3201s if a new version is released? 32 | Huawei LTE RAN CI | June 2010

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Huawei LTE Elements RRU3808 WCDMA/LTE Remote Radio Head The RRU3808 appears to be based on the RRU3804, Huawei‟s flagship WCDMA base stations. The hardware is “LTE ready”, needing just a software upgrade to be able to support both WCDMA and LTE (in the same frequency).

33 | Huawei LTE RAN CI | June 2010

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Huawei LTE Elements RRU3908 GSM/WCDMA/LTE Remote Radio Head The RRU3908 is Huawei‟s newest RRU – supporting GSM, WCDMA and LTE. The hardware is “LTE ready”, needing just a software upgrade to be able to support LTE.

This RRU appears to be functionally similar to the mRFU radio unit. Just as with the mRFU, the availability date shown is probably for GSM/WCDMA – with LTE available later. 34 | Huawei LTE RAN CI | June 2010

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Huawei LTE Elements Compare with Other LTE Vendors Alcatel-Lucent

Huawei

Ericsson

Nokia Siemens

6

6

6

3

Height

2U

2U

1.5U

3U

RF techs supported

LTE

GSM, WCDMA, CDMA, TD-SCDMA, WiMAX, LTE

GSM, WCDMA, LTE

GSM, WCDMA, LTE

LTE carriers (2x2 MIMO @ 20MHz)

Baseband Unit

Radio Unit

LTE carriers / output power

GSM, WCDMA, CDMA planned

2 / 2x40W 2 / 2x40W

Radio Head

LTE carriers / output power

2 / 2x40W

3 / 3x60W

(LTE RFU)

2 / 2x40W

2 / 2x30W

(RRU3201/3203)

(RRUS11)

1 / 1x60W

2 / 2x40W (RRU3808)

2 / 2x40W (RRU3908)

• • • •

Huawei Strengths: BBU can support multiple technologies Radio units can support multiple technologies Small BBU cards for flexibility Integrated GE interfaces

35 | Huawei LTE RAN CI | June 2010

Huawei Issues: • BBU can only support 2 technologies simultaneously • Availability dates are floating • Why was RRU3201 replaced?

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3b

Huawei‟s LTE RAN Configurations

Huawei LTE Configurations DBS3900 Distributed Base Station The DBS3900 is Huawei‟s solution for overlaying existing networks and for applications with space constraints. It initially consisted of two parts: the BBU3900 and the RRU3201. • It supports other RRUs as they become available. • The RRUs support daisy-chaining, so there can be more than 3 RRUs.

Capacity (as shown) 3 carriers, 2x2 MIMO 40W per channel Interfaces FE or GE (elec. or opt.) Comments The Physical Throughput: Up to 173 Mb/s in a downlink with 2×2 MIMO; 64QAM, 20 MHz and 84 Mb/s in an uplink with 1×2 SIMO, 64QAM, 20 MHz per cell. Flexible Bandwidth Support: The BBU3900 LTE supports channel bandwidths of 5, 10, 15, and 20 MHz in the first release. Note that these comments apply to all configurations.

Huawei’s first LTE release, eRAN1.0, was based on this distributed solution. 37 | Huawei LTE RAN CI | June 2010

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Huawei LTE Configurations BTS3900 Indoor Macro The Indoor Macro BTS meets ultra-high capacity requirements for dense urban application.

RFU

Capacity 6 carriers, 2x2 MIMO (12 total) 40W per channel Interfaces FE or GE (elec. or opt.) Specifications Size: 900 x 600 x 450 mm Weight: 120 kg (typical) Power Consumption: 2400W (6 x 2x2MIMO @ 10MHz)

BBU

Two macros can be stacked, providing double capacity in the same footprint. The physical design of the cabinet creates a cooling chimney when stacked. At MWC 2010, Huawei showed another double-capacity configuration called the BTS3900L. It again appeared to use the same elements - simply combining them into a single cabinet. The macro was first available for LTE in eRAN2.0, 1Q2010.

38 | Huawei LTE RAN CI | June 2010

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Huawei LTE Configurations BTS3900A Outdoor Macro The Outdoor Macro single cabinet BTS will also be applied in high capacity situations, but is in an enclosure for outdoor deployment. Options are provided for different sizing and for inclusion of batteries. Capacity (single) 3 carriers, 2x2 MIMO 40W/channel Capacity (double) 6 carriers, 2x2 MIMO 40W/channel Interfaces FE or GE (elec. or opt.) Specifications Size: 900 x 600 x 450 mm Power Consumption: 2440W

BBU RFU

Standard size

39 | Huawei LTE RAN CI | June 2010

Standard size (w/ batteries)

Double size

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(6 x 2x2MIMO @ 10MHz)

Huawei LTE Configurations DBS3900 Outdoor Distributed Base Station Huawei also provides a solution for deploying the BBU outdoors.

40 | Huawei LTE RAN CI | June 2010

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Huawei LTE Configurations BTS3900C Micro Outdoor The Micro is targeted at “suburban applications, blind spots, and hot spots”. Note that the BTS3900C has not been marketed for LTE yet, but is part of their CDMA and WCDMA offer.

Capacity (assuming RRU3201) 1 carriers, 2x2 MIMO 40W/channel Interfaces FE or GE (elec. or opt.) Specifications Weight: 35 kg (typical)

RRU3804 BBU3900 41 | Huawei LTE RAN CI | June 2010

(or RRU3201?)

The availability of the micro is unclear. Sometimes it is shown, sometimes a pico is shown. There are no firm delivery dates for either one. Alcatel-Lucent Proprietary/Confidential All Rights Reserved © Alcatel-Lucent 2009

Huawei LTE Configurations Compare with Other LTE Vendors

Alcatel-Lucent

Huawei

Ericsson

Nokia Siemens

Macro indoor

Yes

Yes

Yes

Yes*

Macro outdoor

Yes

Yes

Yes

Yes*

Yes

Yes

Micro/Mini Distributed

Yes

Yes

Yes

Yes*

1st BTS release

2008

2008

2009

2005

1st LTE release

Q3 2009

Q3 2009

Q2 2009

Q4 2009 * NSN stacks Flexi units to make each configuration

• • • •

Huawei Strengths: Full range of options All configurations built from same elements “Mature” base station design All RF technologies available

42 | Huawei LTE RAN CI | June 2010

Huawei Issues: • Many, confusing options • Uncertain small cell direction

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Huawei‟s LTE RAN SingleRAN/Evolution

3c

Huawei‟s SingleRAN BTS3900 Supports Multiple Technologies The BTS3900 is designed to be the only base station that the operator needs to deploy. It was released in 2008 and has been deployed for GSM, CDMA, WCDMA and WiMAX applications. LTE (FDD and TDD) is the next technology to be added. BBU 3900 The BBU3900 can contain two control boards, therefore can support two technologies simultaneously. If there is empty space in an existing BBU, you can add a 2nd technology by adding appropriate control and modem cards.

RFUs The macro radio shelf can contain 3 to 6 radio units. Again, if there is empty space, you can add a new RFU into any empty slot. (If mRFUs are deployed, you could do a software upgrade to change an existing one to support LTE.)

RRUs Huawei has multiple flavors of RRU, several of which support multiple technologies (in a single frequency band). You can reuse an appropriate existing RRU or deploy a new one.

Since the BBU, RFU and RRU are the key elements in all BTS3900s, any of the configurations can be easily upgraded – macro indoor, macro outdoor, micro and distributed. 44 | Huawei LTE RAN CI | June 2010

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Huawei‟s SingleRAN SingleRAN Examples These pictures show how to add LTE to an existing WCDMA deployment. Note addition of hardware required in both baseband and radio elements. BTS3900 (WCDMA only)

W C D M A

W C D M A

W C D M A

BTS3900 (WCDMA+LTE)

Add 3 LTE RFUs

W C D M A

W C D M A

W C L L L D T T T M E E E A

Any tech RFU can be plugged into any slot.

Add LTE controller and modem

BBU supports 2 technologies simultaneously

Add RRU

DBS3900 (WCDMA only)

Most RRUs support multitechs

LTE

Add LTE controller and modem WCDMA

WCDMA

WCDMA

WCDMA

… or you can just deploy another RRU

DBS3900 (WCDMA+LTE) 45 | Huawei LTE RAN CI | June 2010

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Huawei‟s SingleRAN BBU3900 Options The key cards in the BBU are the control and modem cards (as discussed in the last section). Because of the independence of the BBU slots, multiple combinations of technologies can be supported.

F A N

WCDMA modem

Transmission

WCDMA modem WCDMA modem

GSM control + modem

WCDMA modem

WCDMA control

PWR PWR

F A N

WCDMA modem

WCDMA modem

WCDMA modem

WCDMA modem

LTE modem

WCDMA control

LTE modem

LTE control

empty

Transmission

empty LTE modem

GSM control + modem

LTE modem

LTE control

PWR PWR

F A N

CDMA modem

CDMA modem

CDMA modem

CDMA modem

LTE modem

CDMA control

LTE modem

LTE control

GSM + LTE

46 | Huawei LTE RAN CI | June 2010

PWR

WCDMA + LTE

GSM + WCDMA

F A N

PWR

CDMA + LTE

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PWR PWR

Huawei‟s SingleRAN Radio Units Each RRU in Huawei‟s portfolio supports a different combination or technologies. The RRU3804 is a multi-carrier unit that will support both WCDMA and LTE. It can be reprogrammed as the network evolves.

47 | Huawei LTE RAN CI | June 2010

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Huawei‟s SingleRAN Example: WCDMA/LTE Huawei BTS3900 WCDMA networks are “LTE Ready”. This means the operator can deploy LTE without replacing equipment, however they still must upgrade SW and/or HW.

New HW for different band

HW upgrade required

48 | Huawei LTE RAN CI | June 2010

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Huawei‟s SingleRAN Example: WCDMA/LTE Existing WCDMA network Each base station has 3 5MHz carriers

F A N

Transmission

WCDMA modem WCDMA modem

WCDMA control

New WCDMA+LTE network Each base station has 3 5MHz WCDMA carriers And 1 20MHz LTE carrier

F A N

PWR PWR

Transmission LTE modem WCDMA modem

LTE control

WCDMA modem

WCDMA control

PWR PWR

WCDMA + LTE

WCDMA only

Capacity: •Each WCDMA modem card supports 3s2c • Could deploy 2 or 3 modem cards depending on growth planning

Interfaces: •2 FE connections to network (1 from WCDMA controller, 1 from transmission card) •3 CPRI links to RRUs (from modem cards)

Capacity: •Each WCDMA modem card supports 3s2c •Each LTE modem card supports 3s 2x2 MIMO (@20 MHz) Interfaces: •2 FE connections to network for WCDMA (1 from WCDMA controller, 1 from transmission card) •3 CPRI links to RRUs (from modem cards)

•1 GE connection to network for LTE (from LTE modem card)

BBU engineering isn‟t consistent across technologies, so the operator must design the WCDMA network with the intent to upgrade to LTE. Otherwise, change can be difficult. 49 | Huawei LTE RAN CI | June 2010

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Huawei‟s SingleRAN Example: GSM/LTE Two steps in this evolution: 1.Addition of GSM 1800 and LTE 2600 2.Reduction of GSM900 – replaced with LTE900 If the GSM900 was deployed using MRFUs instead of GSM-specific RFUs, the second step can be done via software instead of replacing RFUs.

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G444

50 | Huawei LTE RAN CI | June 2010

G 9 0 0

G 1 8 0 0

G 1 8 0 0

G 1 8 0 0

L 2 6 0 0

L 2 6 0 0

L 2 6 0 0

G 1 8 0 0

G 1 8 0 0

G 1 8 0 0

L 2 6 0 0

L 2 6 0 0

L 2 6 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

G 9 0 0

L 9 0 0

L 9 0 0

L 9 0 0

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G444/LTE (wider bandwidth)

Huawei‟s SingleRAN SingleRAN Realities Huawei portrays SingleRAN evolution as a simple upgrade, typically requiring only software. Let‟s look a little closer at some of the real limitations. Adding the 3rd technology requires a 2nd BBU.

Using an MRFU will simplify things by allowing a SW-only upgrade of radios. However, you either: • Bought unneeded capacity initially or • Must decommission the original RF network first.

New radio and BBU hardware

51 | Huawei LTE RAN CI | June 2010

New radio and BBU hardware

Empty space required for simple upgrade. Does operator want to initially deploy half-full macros?

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Huawei‟s SingleRAN SingleRAN@Broad What is it? At Mobile World Congress 2010, Huawei unveiled their SingleRAN@Broad marketing campaign, discussing expansion of mobile broadband to LTE and beyond. This continues their recent history of rolling out new campaigns at MWC: 2008 – Fourth Generation BTS; 2009 – SingleRAN; 2010 – SingleRAN@Broad The diagram on the right shows the basic principles of SingleRAN@Broad: 1.Capacity will increase by 500x  New topologies  New use of spectrum  New technology

2.OPEX per bit will drop to 1/35th  RAN site savings  Transport savings  Improved OA&M tools

3.User experience will increase as a result  Voice  Data

Be Careful: This is not a product/offer. There are no specific Huawei products mentioned. Any vendor could draw this chart. • “SingleRAN” is a concept with specific current products that support it. • “SingleRAN@Broad” requires future developments like LTEAdvanced to achieve the promised results. 52 | Huawei LTE RAN CI | June 2010

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Huawei‟s SingleRAN How to Position Against It?

• •

• • • •

Huawei Strengths: Single design structure for all RF technologies Single OA&M system for all applications Relatively simple evolution Numerous options for upgrade Operators are already deploying “LTE Ready” networks Customers have bought into the converged RAN concept and see Huawei as the leader

53 | Huawei LTE RAN CI | June 2010

Huawei Issues: •“Software only” upgrade claim - Yes if RRH is the right one - Yes if frequency is the same - Never true in BBU – always need HW •“Simply add cards to BBU” claim - Only works if you have empty space - Did you overbuy initially? - Or did you pre-equip with LTE? - How did you know where/how much? - Do you have both GSM+UMTS already? - You‟ll need a new BBU. •Generations - Huawei is cheap in initial purchase and expensive in extensions. If the customer didn‟t lock-in prices when first deploying SingleRAN, they may get surprised. - Huawei has reputation of coming out with new hardware and abandoning the old. Example, RRU3201 -> RRU3203.

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4

Huawei‟s LTE RAN How Do We Win?

Beating Huawei Introduction Huawei is Formidable – but NOT Unbeatable There are three general directions we can take to attack Huawei:

1. Attack their “Market Leadership Position” • •

Are they really a leader? Analysts think so, but they still haven’t won the “big LTE contracts” or delivered the “big LTE networks”. There are still question marks here. The next 6 months will tell whether Huawei can continue their highly respected position.

2. Attack their LTE product offer • •

This is a tough one, because Huawei’s SingleRAN concept is a game-changer for wireless – and the BTS3900 eNodeB matches the competition in capacity, flexibility, etc. We must redirect the argument - don’t start with a side-by-side comparison against our product. Instead, talk about network design – “Is a converged RAN really the most cost-effective solution for you?” Talk about the total network – end-to-end services, network reliability, total cost of ownership, etc.

3. Use fear, uncertainty and doubt (FUD) • •

Huawei has a history of unreliability and questionable business practices. Even if those are problems of the past, we still put questions in our customers minds This category should really be the foundation when competing with Huawei. “Who do you want as a partner?” “A low-cost manufacturer or Bell Labs?” “A seller of box-oriented solutions or an end-to-end solution?” “A company with a long history of meeting your needs or an upstart with a spotty reputation?”

The next page has a summary of Huawei‟s strengths and weaknesses. Following that are ideas for attacking Huawei – organized in the 3 categories listed above.

55 | Huawei LTE RAN CI | June 2010

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Beating Huawei Strengths/Weaknesses Strengths •Low prices •High promises •“Guaranteed” China volume helps scale Business

•R&D strength in numbers and accomplishments

•Customer-centric approach (quickly bring resources to bear on customer hot buttons) •Turning corner from tier 2 vendor to major player in wireless infrastructure

LTE

•Strong presence in LTE trials •Wins with TeliaSonera, Telenor, Net4Mobility •Strong growth in wireless (GSM, CDMA, WCDMA) •Single base station for all technologies •2008/2009 deployments are “LTE Ready” •Flexible BBU-based solution •“Easy” evolution to LTE •Strong “green” marketing => reduced TCO

56 | Huawei LTE RAN CI | June 2010

Issues • History of inconsistent performance • Credibility issues • Security concerns due to government/military links • Growth and globalization will put pressure on their low-cost profile • Still not fully embraced by operators, often brought into bids simply to lower prices • A weak reputation in the professional services market compared to Ericsson, NSN and ALU. • Huawei is currently challenged by ZTE for 3G leadership in China. To lead worldwide, Huawei must lead in its domestic market. • Still selling boxes, not end-to-end • Loss at TeliaSonera! • Marketing says “software upgradable”, but most upgrades require some new hardware • Capacity limitations on LTE dual-mode BBU? • No evolution path from older base stations (preBTS3900); requires overlay with new hardware

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Beating Huawei Attack Market Position Attack Huawei’s claimed “leadership position”

Ideas:

• ALU is a tier 1 vendor, Huawei just want to be • How many trials does Huawei really have? • How many significant contracts does Huawei really have? • ALU has Verizon and AT&T plus a long list of significant trials. • Huawei won TeliaSonera … but then lost it • Huawei is a recent large contributor to standards bodies – ALU has been a leader in 3GPP and 3GPP2 for years

Messages:

Attack Huawei’s marketing messages

•“End to end LTE solution leader” •Huawei is unclear in their EPC, ecosystem, transport solutions •ALU has leading solutions in IMS, applications, META, … •“Green solution. TCO savings.” •Many of their claims are based on generic LTE advantages •We can also demonstrate TCO savings with our solutions via Bell Labs Modeling •“Software Defined Base Stations” •Most of H‟s base station evolutions require new HW, not just SW •SDR? We‟ve done it for years. We‟ve also led in the development of MIMO, SON, OFDM, beamforming, flat IP …

57 | Huawei LTE RAN CI | June 2010

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Beating Huawei Attack Product Examples:

• SingleRAN‟s biggest differentiator was time-to-market – Huawei doesn‟t Attack Huawei’s LTE offer

have a TTM advantage for LTE • The BTS3900 BBU has engineering restrictions and capacity limitations • Their EPC solution is evolved from their GSM/WCDMA mobile core • Limitations in OAM tools and methodical/structured procedures

Areas: Attack Huawei’s evolution story

• Huawei still has a small embedded base • You need an embedded base in order to evolve it • We have CDMA and HSPA market leadership • The Huawei evolution story is focused on the new BTS3900 • Evolution from previous versions is weak/ignored • Churn, churn, churn – evolution requires new hardware/software Reports:

Attack Huawei’s BTS3900 performance

• The BTS3900 looks good on paper. How does it really perform? • Recent outages in Canada reflect poorly on Huawei (see next slide) • Reports from China indicate Huawei is missing promises, slipping deliveries and delivering reduced capacity solutions

58 | Huawei LTE RAN CI | June 2010

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Beating Huawei Example of Product Failures 3G Network Outage at Bell Canada and Telus Mobility, February 2010 “ Bell had a six hour degradation on two RNCs last Friday. According to TELUS the RNCs were under provisioned so they were running hot. Telus and Bell Mobility RAN share so an outage actually effects both” (Alcatel-Lucent Canadian Teams) “Many Telus and Bell 3G (Apple iPhone, Blackberry Bold, HTC Hero) users experienced a 4 hour outage in the Greater Toronto Area yesterday. Service was resumed last night. The cause of is the issue still remains unknown, but Telus says it was caused by a “3rd party vendor”. All users are advised to perform a soft reset on their handset”



In late February, a major impacting network outage that lasted in the regions of 4 hours in Toronto that degraded 3G data services in Telus and Bell networks. Toronto is Huawei's main market. The feedback from local teams was that Huawei's capacity claims or engineering dimensioning did not support the traffic demand and did not live up to expectations, possibly the Radio Network Controllers (RNC) were under provisioned. Our local sales teams confirmed that Bell Mobility network outages were caused by a failure in Huawei's RNC in the Bell network and their technical teams were still investigating this case.



Based on information from the Sales Teams, it seems that Telus SGSN (provided by NSN) was ‘flooding' Bell 's RNC (provided by Huawei) with traffic (Multi-Operator Core Network - MOCN environment). The amount of concurrent traffic generated by the Telus SGSNs caused the degradation in Bell 's Huawei RNCs. Some of the causes of the failure may have been problems with the SGSN configuration in Telus, bad dimensioning of Huawei's RNC or any bug in RNC/SGSN. However, independently of the root cause of the failure the RNC should arguably have been more resilient during the overload. This event questions whether Huawei's RNC provides the Telco grade high traffic performance that is expected in demanding markets.



More details available at ‘Alerts’ : http://wireless.app.alcatellucent.com/marketing_toolbox/competitive_intelligence/wireless.htm Source:

- Toronto outage, February 25th , 2010 http://www.aingaran.com/4-hour-3g-outage-in-toronto-for-bell-and-telus

- Sales Teams

59 | Huawei LTE RAN CI | June 2010

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Beating Huawei Use FUD Examples:

• Huawei‟s a privately held company and their financials are “nonAttack Huawei’s credibility

• • • •

transparent” Huawei reports strong growth in “contracts”, not “revenues” – not always the same thing Won‟t talk directly about financing from the Chinese government Repeated reports of ethical problems Governments have security concerns, including reports of spying by employees and close ties to the military (note recent problems in India).

Examples:

•Huawei is investing in local resources now … it will take sometime for these Attack Huawei’s lack of maturity

60 | Huawei LTE RAN CI | June 2010

teams to be well established •Limited professional service capabilities •They‟re experiencing rapid growth. How will it impact them? •Can their support structures handle the growth? •Can they be a true global vendor (rather than low-cost box vendor)? •They buy market position via low entry costs – when do they cash in? •Limited experience with tier 1 operators

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Beating Huawei More FUD

Examples:

• Promises made in sales cycle must be negotiated post contract – Attack Huawei’s track record

often creating costly changes • Huawei notorious for under-pricing an initial deal, only to gouge the customer on future needed features and licenses • Huawei has a history of discontinuing product lines deployed in the field requiring costly upgrades or replacements over time • Huawei creates a false appearance of being responsive, e.g., Flying in 100‟s of people from China to fix a problem

For published articles and more detail on these issues, read “Huawei – The Unpleasant Truths” (updated quarterly) http://wireless.app.alcatel-lucent.com/marketing_toolbox/competitive_intelligence/wireless.htm

61 | Huawei LTE RAN CI | June 2010

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5

For Further Information

For Further Information Marketing Toolbox for Competitive Intelligence  To communicate to the „wider Wireless community’ CI analysis, reports and product benchmarks produced by different CI groups http://wireless.app.alcatel-lucent.com/marketing_toolbox/competitive_intelligence/lte.htm

Huawei LTE RAN Analysis

63 | Huawei LTE RAN CI | June 2010

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