All-Optical Network Strategy and Coordinated Planning Are the Cornerstone for Building Full-Service Target Networks

February 21, 2020

16 Min Read
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By Zhang Jun, Ex-CTO of China Telecom Shanghai / Chief Consultant of Huawei Southern Pacific Region

“Even perfect tactics cannot make up for a lack of strategy.” What is strategy? Strategy is a methodology of continuously maintaining an enterprise’s competitiveness and sustainable development capabilities, with medium- and long-term business value as the goal.

What is coordinated planning? The business departments of operators are assigned with different responsibilities based on 2B, 2C, and 2H service types. However, network planning and construction departments need to coordinate business requirements and network planning. Therefore, cost reduction does not merely depend on procurement, but also depends on other factors such as network architecture, coordinated planning, and top-level design. Coordinated planning is a key initiative to implement enterprises’ development strategies.

What are full services? In addition to traditional broadband, mobile, and value-added services, operators are moving towards digital transformation services thanks to their resource advantages in cloud-network convergence/synergy, freeing them from becoming dumb pipe providers.

All-optical networks are also known as fiber to the x (FTTx), which can refer to fiber to the site, fiber to the building, and fiber to the home. The coordinated planning of full-service areas and unified optical cable networks is critical to implementing all-optical networks.

1 Successful Experience of Chinese Operators

Strategic directions and coordinated planning embody the success of Chinese operators.

According to the Ministry of Industry and Information Technology (MIIT) of China, by November 2019, the total number of broadband users of the three major operators (China Telecom, China Mobile, and China Unicom) had reached 452 million, among which optical network users account for 92.5%. Moreover, the total number of mobile users had exceeded 1.6 billion, among which 4G users take up 79.7%. China had deployed more than six million base stations, of which more than five million are 4G base stations. Additionally, around 130,000 5G base stations had been built by the end of 2019. China’s strong broadband networks and abundant fiber resources lead to stronger mobile networks.

China Telecom, China Mobile, and China Unicom are all listed companies, and adhere to the fixed-mobile convergence (FMC) strategy. Their network construction is driven by four factors: policies, competition, services, and technologies. Among them, competition is the major driver. The Chinese government has not only issued competitive policies such as triple play, higher speed and lower prices, and mobile number portability (MNP), but also issued supportive policies, such as joint construction and sharing of infrastructure, standardization of fiber communications auxiliary construction for real estate developers, and lower prices for 5G spectrum.

Chinese people believe that to get rich, build road first. Similarly, Chinese operators believe that to develop services and increase revenue, construct network infrastructure first. However, network construction cannot be done blindly. Instead, value identification is required before network construction. Only strong networks can facilitate service growth. In the Internet era, the bandwidth and latency of networks will always be competitive, especially in the 2B field.

With regard to investment, Chinese operators believe the following concepts: Look at the big picture, not merely small segments. Look at mid- and long-term goals, not merely short-term goals. Look at the competition landscape, not merely business revenue. Look at gaining sustainable development capabilities, not merely immediate interests. Expanding the user base is Chinese operators’ top priority.

2 China Telecom’s CT2025 Strategy

As early as 2016, China Telecom proposed its CT2025 strategy and Internet Plus action plan, as shown in Figure 2-1.

Figure 2-1 Business and technical strategies of China Telecom’s CT2025


China Telecom’s business strategy is to build a 2+5 ecological tree. The root of this tree is broadband and 4G pipes (focusing on gigabit broadband + 5G). The entire tree will thrive only if its root grows well. The branches of the tree are five ecosystems, including smart connectivity, Internet of things (IoT), smart home, novel ICT applications, and Internet finance.

The technical strategy of China Telecom is to transform from ICT into DICT (Data Tech + ICT). Data Tech include AI, Block chain, Cloud, Big Data, Edge Computing, Five G, Smart Home, and IoT (ABCDEFGHI for short).

In 2018, China Telecom proposed that its strategy would shift from “optical transformation” to “cloud transformation” over the next decade.

3 Composition of Full Services

Full services consist of 2B, 2C, and 2H services. 2C and 2H services are relatively simple and focus on package design, whereas 2B services are complex. This document describes the rough classification of 2B services only, as shown in Figure 3-1.

Figure 3-1 Classification of 2B services


2B services fall into four types: private lines, IoT, ICT, and Internet Data Center (IDC).

  1. Private lines

Private line products focus on differentiated requirements, and can be classified into the following types:

(1) Networking private lines, which are further classified into premium optical transport network (OTN) private lines (rigid pipes), IP RAN private lines (elastic pipes), and PON VPN private lines (wide-coverage and low-cost elastic pipes).

(2) Internet private lines, which are further divided into two types: fixed IP address and dial-up. Unlike home broadband (HBB), Internet private lines provide symmetric upload and download rates and better after-sales services.

(3) Cloud private lines, including networking private lines + cloud and Internet private lines + cloud.

Private line services are usually provided for end users as products. This requires product design, packaging, promotion, marketing, channels, application handling, as well as in-sales and after-sales services.

  1. IoT

IoT supports two access modes: wired and mobile, which are key network technologies in the smart city domain.

(1) Wired access adopts PON technology and is widely used in the video surveillance domain.

(2) In the 4G era, mobile access adopts NB-IoT technology, which later evolves to eMTC technology. In the 5G era, mobile access adopts mMTC technology.

  1. ICT

Traditional ICT is being replaced by cloudification.

(1) ICT includes optical network + cloud and 4G/5G + cloud. This provides digital transformation services for governments, society, industries, and enterprises, in conjunction with state-of-the-art technologies such as Big Data, artificial intelligence (AI), and edge computing.

(2) IoT is within the application scope of ICT. Operators usually provide IoT services through project cooperation and delivery.

  1. IDC

IDC server hosting not only provides leasing of equipment rooms, power supplies, and air conditioners, but also generates revenue from pipe leasing. Traditional fixed network operators can utilize their abundant equipment room resources to develop IDC services.

4 Full-Service Target Network Portfolio

Figure 4-1 shows the full-service target network portfolio.

Figure 4-1 Full-service target network portfolio


The full-service target network architecture consists of the 4G/5G network (mobile access), cloud, and all-optical network. This requires FMC and cloud-network convergence/synergy.

  1. Mobile access

(1) Enhance 4G network coverage, increase 4G network capacity, and enable VoLTE. Gradually phase out 2G/3G networks to implement frequency refarming and reconstruction of infrastructure such as equipment rooms, towers, and poles, reducing long-term O&M costs and paving the way for sustainable development of mobile networks.

(2) IoT technology applications, including NB-IoT/eMTC in the 4G era and mMTC in the 5G era.

(3) Three 5G application scenarios (eMBB, URLLC, and mMTC) and non-standalone/standalone (NSA/SA) converged networking.

  1. Cloudification

(1) CT to the cloud: implements network virtualization and intelligence, including the virtualized IP multimedia subsystem (vIMS), virtualized evolved packet core (vEPC), and virtual broadband network gateway (vBNG).

(2) IT to the cloud: enables operators’ business support systems (BSSs) and operations support systems (OSSs) to go digital, implementing smart network and service operations.

(3) Services to the cloud: builds an ecosystem by migrating services from governments, enterprises, industries, households, and individuals to the cloud. There are three types of clouds: public, private, and hybrid. Hybrid clouds are crucial to operators. The collaboration between operator networks and self-built clouds is called cloud-network convergence, whereas the collaboration between operator networks and public clouds is called cloud-network synergy. Migrating services to the cloud can enlarge operators’ pipes, which is crucial to the current and future development of operators’ private line services. Therefore, operators should take advantage of network resources and strengthen cooperation with OTT players to provide multi-cloud on-demand services.

(4) In 2016, China Telecom proposed three strategic transformation directions: network intelligence (CT to the cloud), service ecosystem (services to the cloud), and smart operation (IT to the cloud). These strategies underline China Telecom’s vision to become a leader in the hybrid cloud market. According to IDC, China Telecom’s e-Surfing Cloud ranked seventh in the global public cloud market in 2018, and China Telecom was the only telecom operator among the top 10 cloud providers.

  1. All-optical network

(1) Full-service areas and unified optical cable networks are the foundation of all-optical networks, and therefore need to coordinate 2B, 2C, and 2H services.

(2) The unified transport network (OTN) features high bandwidth, low latency, and multiple services. This network can be used for premium private lines, Data Center Interconnect (DCI), IP links, and mobile network fronthaul.

(3) The IP integrated transport network has Flex-E and IPv6 Segment Routing (SRv6) features and is the foundation for network slicing. This network can be used for IP RAN private lines, broadband transport, and mobile backhaul.

(4) PON enables full-service access. Comb PON and Flex PON are widely recognized in the industry and can be used for PON VPN, Internet private lines, regional networking, and smart homes. They are widely used in video surveillance and industrial control, and in public areas and buildings (such as harbors, campuses, hotels, airports, commercial buildings, as well as train and bus stations).

(5) Software-defined networking (SDN) supports intelligent, on-demand selection of bandwidth, clouds, value-added applications, and after-sales services, and utilizes the underlay mode to leverage differentiated competitive advantages of operators’ network control.

The modules shown in the blue boxes of Figure 4-1 are closely related to 5G network planning and service development. 5G is not only an innovation in air interface technologies, but also a fundamental innovation in E2E network architecture and cloudification. Therefore, coordinated planning is required to unlock the potential of 5G.

5 Operators’ Strategies

Figure 5-1 shows the strategy for implementing the full-service target network.

Figure 5-1 Full-service target network strategy


  1. Three strategies

To implement the full-service target network, operators need to focus on three strategies: 5G, FMC, and cloudification. To implement these three strategies, operators need to focus on the all-optical network strategy, which is both the foundation and key.

(1) The 5G strategy focuses on technology leadership, helping operators seize the window period of differentiated service competition.

(2) For FMC, service convergence is the objective, and network convergence is the method. Service convergence can significantly improve product competitiveness, enhance product stickiness, and improve user experience by providing only one bill. Network convergence can reduce CAPEX and OPEX, with one fixed network transmitting and carrying all services.

(3) Cloudification is aimed at offering agile and digital networks and services. Cloud-network convergence/synergy is an inevitable trend and the future of operators. Operators need to focus on building strong networks to boost the growth of cloud services.

  1. Chinese operators’ strategy implementation

China’s three tier-1 operators have fully implemented FMC and all-optical network 1.0. They are currently implementing cloudification and 5G NSA network construction at scale. Estimates indicate that China Telecom and China Mobile will both take the lead in building 5G SA networks in 2020. Before the advent of 4G, China Telecom Shanghai completed the construction of an FTTH network, paving the way for 4G network development. In addition, China Telecom Shanghai completed full gigabit network coverage by the end of 2018 before the arrival of 5G, making Shanghai the world’s first gigabit city. China Telecom Shanghai is now fully engaged in 5G network construction.

  1. Chinese operators’ all-optical network strategy

Wei Leping, Director of the Technology Committee and Chief Scientist at China Telecom Group, proposed the concepts of all-optical network 1.0 and 2.0. According to Wei Leping, all-optical network 1.0 refers to all-optical access networks (FTTH), and all-optical network 2.0 refers to OXC+ROADM-enabled metro networks and gigabit (10G PON) access networks. China’s three tier-1 operators have fully implemented all-optical network 1.0 and are making significant progress towards all-optical network 2.0.

6 Methods and Means of Coordinated Planning

  1. Planning methods

(1) Collaborative planning

Collaborative planning includes two aspects: The first is collaboration of services, technologies, and network planning. Service planning drives technical planning, which in turns drives network planning and rolling planning. The second is collaborative planning across professions, departments, front-end and back-end, industry chains, as well as industries.

(2) FMC planning

The key to achieving FMC lies in the convergence of infrastructure, especially sites. After infrastructure is converged, optical cable networks, transport networks, IP networks, and access networks will also be converged naturally.

(3) Value-oriented planning

Value-oriented planning refers to the process of making an overall plan for the entire network and implementing the plan step by step based on the priorities of high-value areas and services.

(4) Coordinated investment planning

Coordinated investment refers to investing in core competitiveness and focusing on current strategies. In contrast, blind investment leads to inefficient utilization of funds.

If business departments cannot propose business plans, we need to perform strategy-based network planning because network planning and construction are lengthy processes. Network construction merely based on service requirements is bound to miss the window period, which is the most important differentiator, and the network architecture design will lack a global, E2E, or entire-network perspective.

  1. Planning means

(1) Identify high-value users and services by area.

(2) Formulate standards for network planning and construction. Only through standardization, can industrialization be promoted and large-scale construction ultimately achieved. However, standardization must also entail differentiation, which is derived from scenario-specific summaries.

(3) Planning tools are required to achieve digital planning and construction.

7 Principles for Planning Full-Service Areas and Unified Optical Cable Networks

In terms of global development trends, fixed network operators have gradually gained advantages with regard to mobile network construction. Mobile operators that do not build fixed networks will miss out on the FMC window period over the next two to three years, and lose sustainable competitiveness. Coordinated planning of full-service areas and unified optical cable networks is the key to implementing all-optical network and FMC strategies. This is because equipment rooms and optical cables will always be the core assets of operators.

China Mobile adopts the “full-service areas and one optical cable network” planning method. Within just five years after China Mobile obtained a fixed network operations license, its number of broadband users surpassed that of China Telecom, setting a model for mobile operators worldwide to build fixed networks.

  1. Benefits and functions

Mobile network operations are centralized and intensive, while fixed network operations are centralized, intensive, and localized. Planning full-service areas is key to building a “planning, construction, marketing, installation, and maintenance” organization and production system suitable for fixed networks as well as achieving large-scale, sustainable development of mobile operators’ fixed networks.

Unified optical cable networks are planned and constructed based on 2B, 2C, and 2H service requirements, serving as the foundation for various professional networks.

  1. Planning guidelines

(1) Planning of full-service areas and unified optical cable networks should not be based on a single service. Instead, as the infrastructure, coordinated planning should be based on the development of all services, as well as networking requirements of all domains.

(2) Planning of full-service areas should be based on 10-year development goals at the least, and that of unified optical cable networks should be based on three-year development goals at the least and updated in a rolling manner.

(3) Planning of full-service areas and unified optical cable networks should be based on city planning as well as the development strategies of the local country and operators.

(4) Planning of full-service areas is the foundation of all other planning, and site planning is the key.

(5) An optical cable network is not merely point-to-point lines, but should be flexible and scalable to facilitate networking and fast service access. During the planning of an optical cable network, operators should take into account resource utilization instead of just considering cost reduction.

  1. Planning methods

Stable infrastructure architecture is the cornerstone of target network development. Physical site planning is central to planning full-service areas and needs to be completed first. A clear and hierarchical all-optical network architecture can be created in three steps: determining points, dividing boundaries, and connecting cables.

Figure 7-1 shows the methods for planning full-service areas and unified optical cable networks.

Figure 7-1 Methods for planning full-service areas and unified optical cable networks


(1) Determining points

To determine points, you need to use two approaches: top down and bottom up. Using the top down approach, determine core nodes, aggregation nodes, and full-service access nodes (also known as central offices, COs for short) of metro networks, and establish their homing relationships based on levels and areas, in conjunction with administrative divisions. Using the bottom up approach, locate high-value users through value identification.

(2) Dividing boundaries

After determining COs, take the COs as the core and comprehensively consider various factors such as administrative divisions, balanced distribution of users and services, and route suitability to define the service boundary of each CO. The service area of each CO is a grid.

Grids can be further divided into microgrids based on business value and service density. Microgrids will be small if service density is high, and large if service density is low. A fiber cross-connect device is deployed in each microgrid. Therefore, a microgrid is a fiber cross-connect area responsible for full-service fiber access within the microgrid. A microgrid can be a business building, a campus, or one or more residential communities. It is the minimum unit for front-end and back-end correlated operations.

In the future, digital tools will be used to provide grid-based front-end and back-end correlated management, further enhancing operators’ refined management, including user distribution and requirement analysis (value identification), service policy formulation, network planning and investment, construction progress control, service and user development, and area-based appraisal.

(3) Connecting cables

Based on pipe and pole availability, connect optical cables between core nodes and aggregation nodes on metro networks, and between aggregation nodes and COs.

Based on pipe and pole availability, connect optical cables between COs and fiber cross-connect devices within grid boundaries.

8 Summary

Networks will not have strong capabilities without fibers, service development will be instable without FMC, and revenue growth will be slow without 2B. When calculating return on FTTx investment, operators should also consider 2B and 2C services, as opposed to just HBB services.

Operators without clear investment directions can opt to invest in fibers. This is because fibers are the foundation of full-service transmission, and technologies that can replace fibers in terms of transmission capacity have not yet emerged. Furthermore, fibers have a 30-year service life, and are high-quality assets due to their long payback period. However, fiber investment should not be done blindly. Before investing in fibers, operators need to perform the following steps: First, identify high-value users and services. Second, design a flexible optical cable network structure to improve resource utilization. Traditional fixed network operators’ copper line reconstruction is neither competitive nor sustainable.



  1. Report on the Economic Situation of the Communications Industry from January to November 2019, by the Ministry of Industry and Information Technology of China

  2. China Telecom’s “Internet Plus” Action White Paper in 2016

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