1. www.huawei.com Critical Success Factors 2.5G to 3G Migration The 8th Arab Telecom and Internet Forum Shangri-La's Resort, Muscat - Oman 24 -25 May 2006 Presented by: Moheb Adel Ramses Technical Director, Mobile Networks MENA Region

2. HUAWEI TECHNOLOGIES CO., LTD. Page 2 Overall Evolution and Industry Trend Access business and Services business break up Source: HUAWEI Best Connected Reachable Integration User needs and Services oriented Coverage Capacity New Services Broadband M2M etc. ~2002 2010 $ Medium=Service Pay for media access Voice operation Transfer to content Non-Voice operation 1990 Pay for Content

3. HUAWEI TECHNOLOGIES CO., LTD. Page 3 Wireless Network Trends Unified Flat Converged ALL IP Time Network Architecture Radio Access Radio Access Terminal IMS IP UTRAN Enhanced IMS E2E IP RNC LTE Soft-switch IP CN Ultra-high speed Ubiquitous coverage Higher Spectrum efficiency Various access technology Low Cost Indoor coverage UMA WiMAX OFDM MIMO HSDPA HSUPA WIFI Multi Band Multi Mode Multi Media Software Defined Radio Online Reconfigurable Dual Band Dual Mode Converged Intelligent Integration The wireless networks converge in the core network and the terminal. Wireless access adds value to services, and users will choose best value connection. Usage goes indoor! More than 70% traffic has moved from highway to hallway

4. HUAWEI TECHNOLOGIES CO., LTD. Page 4 RAN Evolution Trends Source: Qualcomm 3GPP2 3GPP WCDMA and CDMA2000 have very similar RAN migration roadmaps. UMTS CDMA2000 WiFiUMA/WiMAX

5. HUAWEI TECHNOLOGIES CO., LTD. Page 5 Core Network Evolution Trends UMTS and CDMA2000 also have very similar core network migration roadmaps. Soft-Switch is the optimum structure for voice IMS is the optimum structure for multimedia service SoftSwitch and IMS will coexist for a long time TDM/IP MSC Server PSTN MGW H.248 SIP-T Softswitch MSC (R4)/LMSD MSC Server TDM MSC PSTN CDMA BSS/ UMTS RAN MISUP Legacy MSC (R99) MSC Divided into MSC Server & MGW IP MGCF PSTN MGW H.248 SIP MGCF CSCF CDMA BSS/ UMTS RAN CDMA BSS/ UMTS RAN IMS/MMD (R5/R6) CS + IMS (+ PS) CS (+ PS) IMS (+ PS)

6. HUAWEI TECHNOLOGIES CO., LTD. Page 6 GSM Market Growth Source: EMC World Cellular Database, Dec 2004 The number of GSM subscribers will exceed 2 billion by the end of 2007 The number of GSM subscribers will exceed 2 billion by the end of 2007 Lower End-to-End cost is the main strength of GSM networks Lower End-to-End cost is the main strength of GSM networks ME&NA is still the fastest growing mobile market ME&NA is still the fastest growing mobile market Voice and SMS are and will still be the main source of revenue for quite a long time Voice and SMS are and will still be the main source of revenue for quite a long time Source: Informa

7. HUAWEI TECHNOLOGIES CO., LTD. Page 7 3G, a new engine to improve ARPU UMTS subscribers number hit 44.6 million worldwide by the end of 2005, an increase of 161% on the figure at the end of 2004. Today, there are 108 commercial WCDMA operators in 47 countries. The majority are enabling HSDPA in their networks as the new baseline for 3G globally ( www.gsacom.com Today, there are 108 commercial WCDMA operators in 47 countries. The majority are enabling HSDPA in their networks as the new baseline for 3G globally ( www.gsacom.com ) www.gsacom.com Green field UMTS networks are still facing relatively high price terminals Green field UMTS networks are still facing relatively high price terminals GSM operators in MENA launch UMTS networks focusing on data services for high end users, despite the poor take-up of their 2.5G data services GSM operators in MENA launch UMTS networks focusing on data services for high end users, despite the poor take-up of their 2.5G data services There is generally a limited amount of money available from users to increase the total revenues of operators There is generally a limited amount of money available from users to increase the total revenues of operators HSDPA availability is currently boosting the 3G deployment, allowing a net differentiation between 2.5 and 3G services. HSDPA availability is currently boosting the 3G deployment, allowing a net differentiation between 2.5 and 3G services. HSDPA gathers momentum in the MENA, especially in the Gulf countries like UAE, Kuwait, Bahrain, Oman, etc … HSDPA gathers momentum in the MENA, especially in the Gulf countries like UAE, Kuwait, Bahrain, Oman, etc … Subscribers (Million)Number of networks 44.6 millions Subs 83 UMTS networks Number of Subscribers Number of Networks Source: www.3gtoday.com

8. HUAWEI TECHNOLOGIES CO., LTD. Page 8 Migration Opportunities and Challenges How to balance 2G Network Expansion versus New 3G Service Launch? How to balance 2G Network Expansion versus New 3G Service Launch? How to deploy UMTS step by step ? How to deploy UMTS step by step ? How to reduce TCO to optimize the revenues of the resulting network. How to reduce TCO to optimize the revenues of the resulting network. GSM operators should plan to make 3G an “Evolution” rather than “Migration”

9. HUAWEI TECHNOLOGIES CO., LTD. Page 9 TCO Saving in Lifecycle OPEX represents more than half of the total cost of ownership. Rental, power consumption, leased lines and human resources are major parts of OPEX (k EUR) TCO reduction is generally “ Crucial ”, especially at this stage of 3G deployment

10. HUAWEI TECHNOLOGIES CO., LTD. Page 10 Optimized Migration Plan Shared Core Networks save CAPEX, OPEX and Improve Quality Huawei Mobile Soft Switch and Packet CN achieve 2G/3G Convergence As a considerable step towards 3G deployment, we recommend GSM operators to adopt R4 Soft-switch architecture whenever they are: As a considerable step towards 3G deployment, we recommend GSM operators to adopt R4 Soft-switch architecture whenever they are: Deploying a new GSM network for a new licenseDeploying a new GSM network for a new license Expanding the core network for an existing GSM networkExpanding the core network for an existing GSM network Swapping legacy GSM MSCSwapping legacy GSM MSC

11. HUAWEI TECHNOLOGIES CO., LTD. Page 11 Macro indoor Optimized Migration Plan New Technologies Reduce TCO in Node B Macro Outdoor Mini Node B Pico Node B Making maximum use of advanced Node B technologies considerably reduce TCO: Integrated Digital PA; higher power efficiency with lower power consumption Multi Carrier Transceivers; software capacity expansion Full HSDPA performance; lower cost per bit. Open CPRI interface; lower industrial chain cost Distributed Node B; easier site acquisition, installation and transportation Optical Fiber CPRI BBU 19 inch box RRU Distributed NodeB

12. HUAWEI TECHNOLOGIES CO., LTD. Page 12 E1 for CS Services and High QoS PS services IP Network for best effort PS services 40%-80% Transmission rental can be saved! RNC Node B IP network E1 Balance of transmission cost saving and QoS guarantee Most efficient transmission solution for HSDPA Transmission ResourceWhole price E1 Transmission4E1€ 19200/year Hybrid IP Transmission2*ADSL + 1E1€ 5760/year Unit Price: E1: €4800/year, ADSL:€480/year Optimized Migration Plan Balanced Transmission Cost and QoS with Hybrid Transmission

13. HUAWEI TECHNOLOGIES CO., LTD. Page 13 Peak data rate: HSDPA = 700% Cost per MB: HSDPA =35% HSDPA provides lower cost per bit, clearly differentiate 3G from 2G services to the end user. Optimized Migration Plan Go Broadband today with HSDPA

14. HUAWEI TECHNOLOGIES CO., LTD. Page 14 TV Programs Example: Mobile TV Huawei Cell Multimedia Broadcast (CMB): All users share a common channel (FACH) Fewer resources occupied but higher revenue for operators Low cost and good experience for end users Smooth evolution to MBMS CMB allows a pre-MBMS cost effective solution for Mobile TV and other broadcasts. Optimized Migration Plan Speed Up Introducing Attractive 3G based Applications

15. HUAWEI TECHNOLOGIES CO., LTD. Page 15 At this stage, it is strongly recommended that operators cooperate closely with terminals’ suppliers to provide affordable customized handsets. Huawei has focused on designing chipsets for Multi-platform solution to reduce the cost of low end terminals Cooperate closely with operators for customized handsets U626U636U526 E600 E618 customized for Vodafone U526 E620(HSDPA) Optimized Migration Plan Cooperation with suppliers for Affordable and Customized User Terminals

16. HUAWEI TECHNOLOGIES CO., LTD. Page 16 About Huawei 3G:Global UMTS Applications Achieved 28 UMTS commercial contracts by the end of April 2006 Deployed over 50 pilot networks worldwide. 22% Market share of Total Awarded Contracts in 2005. P4 NTS …… Europe 12 Asia Pacific 9 Middle East 7 & Africa Area Contract Reference

17. HUAWEI TECHNOLOGIES CO., LTD. Page 17  Over 40 M subscribers  19 CDMA2000 1xEV-DO commercial applications  15 CDMA SoftSwitch commercial applications serving 10 M subscribers  over 65% global market share in CDMA450  68% global market share in CDMA WLL Mexico Nigeria Pakistan Yemen Bangladesh Thailand Russia China Global Footprint of Huawei CDMA About Huawei 3G:Global CDMA2000 Applications

18. HUAWEI TECHNOLOGIES CO., LTD. Page 18 Conclusion The trend of telecom industry is evolving from Network Based to Customer and Services Based. Despite the competition between UMTS and CDMA2000 as the two favorite 3G technologies, they do share a lot of similarities in their Capabilities and Roadmaps. Shared Core Networks for 2G and 3G – whether Circuit core based on R4 softswitch or Packet core - is a major step towards a smooth migration, optimizing CAPEX and OPEX as well as improving QoS. A set of new advanced technologies in the 3G Node B’s considerably help the operators to reduce the TCO while improving the overall performance. Hybrid TDM/IP transmission is currently the favorite solution to balance the high speed data transmission requirements and the cost of transmission resources. Huawei strongly encourages operators to differentiate their 3G capabilities with innovative and attractive applications (especially with HSDPA mature availability), and to cooperate with handsets suppliers for affordable and customized user terminals. Huawei has achieved a remarkable global presence and leadership in the mobile industry, witnessed by the wide global applications of Huawei GSM/GPRS/EDGE/UMTS/CDMA2000 1x/DO networks.

19. Thank You www.huawei.com