"Transformation is a lengthy process. The utilization of existing network resources must be maximized to host a 2G and 3G integrated network."
MegaFon, a young company founded in May 2002, boasts mature market strategies, strong service innovation, and growth rates that far exceed the industry average. To consolidate its meteoric rise and leading position, MegaFon is currently constructing its 3G networks with the aim of becoming Russia's 3G service leader.
Challenges in a mature market
Russia is one of the world's fastest growing mobile telecom markets. Subscriber base rocketed from 1.35 million in 2000 to 188 million in 2008, giving the nation a mobile telecom penetration rate of 130%, one of the world's highest.
MegaFon, a young company founded in May 2002, boasts mature market strategies, strong service innovation, and growth rates that far exceed the industry average. To consolidate its meteoric rise and leading position, MegaFon is currently constructing its 3G networks with the aim of becoming Russia's 3G service leader.
MegaFon cannot avoid the challenges that plague a mature mobile telecom market. Firstly, market maturity catalyzes a wave of competition, and the high penetration rate has caused the new subscriber growth rate to drop. This has presented operators with the unprecedented, dual pressures of having to battle to retain existing customers, while attracting new ones from a limited pool.
Another pressure occurs in that commercial 3G networks have stimulated the rise of IP-based services, characterized by mobile broadband and mobile Internet convergence. Demands on bandwidth, scalability, flexibility, and data transmission cost per bit have risen.
Moreover, 2G to 3G evolution embodies a long-term venture that involves simultaneous 2G network expansion and 3G network construction. In light of these factors, MegaFon has had to consider its key future strategies concerning 2G investment protection, smooth 2G to 3G evolution, and overall TCO control.
After thoroughly researching market, industry trends, and technological development, MegaFon formed its strategy on customized service design and innovation, and All-IP transformation.
All-IP network transformation
Voice-oriented TDM architecture can no longer accommodate the increase in IP-based mobile services. In response, MegaFon designed a 3-phase plan to transform its mobile networks to All-IP, and began optimizing its network in 2005.
The company recognizes that: “Transformation is a lengthy process. The utilization of existing network resources must be maximized to host a 2G and 3G integrated network. Only in this way can we safeguard investment, lower TCO, and facilitate smooth future evolution to All-IP FMC networks.”
With limited optical fiber resources, MegaFon must rent third-party resources at many access nodes and 70% of its mobile base stations are accessed via microwave. While this poses no problem for voice and other 2G narrowband services, data-dominated 3G broadband services become too expensive. For All-IP evolution to succeed, MegaFon has to extend a complete optical fiber network to its BTSs and Node Bs.
MegaFon has renovated its core network by replacing its TDM switches with Huawei's IP-based mobile softswitches. The softswitch accommodates both 2G and 3G networks and can shift from GSM to 3G R99/R4/R5. Its high capacity, deployment speed, and simplified maintenance reduce CAPEX and OPEX, and enhance subscriber experience.
Moreover, it offers seamless evolution potential to IMS. As these networks are IP-based and open service platforms, service innovation is easier and new service launch times are shortened.
Successful implementation entails a long-term, systematic, and prudent plan that first deploys trial schemes in given regions. MegaFon's 2006 trials in Siberia and the Far East successfully installed Ipbased core networks, and further trials of 2007 in the Ural's Asia/Europe border upgraded core network softswitches without adverse effects. In 2008, MegaFon further accelerated the core network IP transformation.
A precondition of an IP-based core network is a highly reliable IP bearer network. MegaFon has already initiated its IP/MPLS+DWDM backbone bearer network plan for implementation over 3 to 5 years. The scheme involves the construction of several hundred IP backbone bearer network nodes, which will be connected by DWDM at 10GE interface speed. This will simplify network layers by separating forwarding and transmission. Bearer efficiency will improve, and network TCO will drop.
The IP/MPLS forwarding layer incorporates carrier-grade reliability in network design, devices employed in all nodes integrate redundancy and protection switching technologies. These measures achieve a protection switching time of less than 200ms between any two points in the network, equaling the reliability of transitional TDM networks.
At the wavelength division transmission layer, MegaFon began constructing its long-distance, wavelength division bearer network as early as 2006 across Russia. The low-cost, high-quality coverage of wavelength division networks was quickly achieved at service hotspots and branch offices with high rental costs. MegaFon's wavelength division network addresses the requirements of distance, capacity, IP orientation, and flexible scheduling. This is achieved with industry leading technologies such as SuperDRZ, GE-ADM, Any-ADM, ROADM, and OTN, which reduce data transmission cost per bit, but provide sufficient bandwidth for 3G services and FMC.
To meet 3G BTS bandwidth demands and overcome RAN transmission bottlenecks, MegaFon began constructing its low-cost RAN over IP in early 2008.
For radio access, MegaFon has opted to construct shared 2G/3G BTSs, with 3G services transmitted through the new PTN to RNCs. The statistical-multiplexing transport network is fully employed to meet bandwidth requirements in case of a traffic burst. To protect network investment, 2G TDM services are still transmitted through the existing MSTP. TDM will be migrated to PTNs when their coverage is sufficient so as to complete RAN to All-IP evolution.
MegaFon plans to steadily promote its Ipbased RAN in 2009 despite the global economic downturn.
Aiming higher
To meet its strategic goals, MegaFon was unrelentingly stringent in its choice of partner. Not only did suppliers have to demonstrate relevant technological expertise, but their brand equity, strengths, service response, and delivery capacity were also under scrutiny.
Since 2005, Huawei has been MegaFon's major partner, and the two have cooperated in a wide range of fields spanning mobile BTS, softswitch, wavelength division transmission, IP bearer, and service.
On October 25, 2007, MegaFon became the first operator to launch 3G services in Russia. The Minister of the Russian Ministry of Information and Communication made the first WCDMA/HSPA video call to the mayor of St. Petersburg, representing MegaFon's decisive leading position as it steps confidently into the 3G era.
As a young, ambitious company, MegaFon remains committed to customer-oriented service innovation and All-IP network transformation.
