The Next Generation Internet development in China ——CNC

1. The Next Generation Internet development in China ——CNC Mr. Botao Xia General Manager Department of VIP Service China Netcom (Group) Corporation Limited 10, 2004

2. Outline • Telecom market development in China • Reorganization of Chinese Telecom Industry • Telecom Network development in China • China Next Generation Internet (CNGI) Project in CNC

3. CONTRIBUTION TONATIONAL ECONOMY OF TELECOMMUNICATION INDUSTRY 1、Direct contribution to national economy of telecommunication industry 2、Indirect contribution to the economic growth of telecommunication industry

4. State of development of market of China Telecom-1 The increase situation about the telephone subscriber of our country since 1995 • By July of this year, The total amount of national telephone subscriber tops 600 million, the mobile phone user exceeds the regular telephone subscriber, leap to the first in the world in pairs. The amount of internet users is close to 87 million, occupies the second place in the world. • The above-mentioned data are enough to indicate that Chinese telecommunication industry have a very important position on the global telecommunication market. Calculating only with capacity of the network and user's scale, China has already become the communication big country in the world.

5. State of development of market of China Telecom- 2 • Broadband users have increased in the form of avalanche, which make the income of data communication business increase by 46.1% compared with the same period of last year. • The income of mobile communication business increases by 17.3% compared with the same period of last year. It is still the leading strength in raising income in the telecommunication trade. • Satellite communication and wireless bleep market shrink widely, the business income drops by 45.8% and 39.7% compared with the same period of last year. The Revenue Structure of Telecom Services in 2003

6. State of development of market of China Telecom-3 By July of this year: • user's scale of China's broadband has already topped 18.75 million • The amount of Internet users is up to 87 million, accounts for 6.7% of the national population. • Service websites of the content reach 627,000, increase by 32.3% compared with the same period of last year. • The total amount of the international export of bandwidth is 54G, increase by 190.3% in the same term. • The frequency of users use the broadband is increasing (online chatting, network game VOD requesting, multimedia amusement). China Internet enters broadband era Internet market development in China

7. Outline • Telecom market development in China • Reorganization of Chinese Telecom Industry • Telecom Network development in China • China Next Generation Internet (CNGI) Project in CNC

8. Reorganization of Chinese Telecom Industry • Before1993: Chinese telecommunication market was monopolised • 1994: Unicom was founded and competition mechanism was introduced to Chinese telecommunication industry • 1998:During the reform of govenmental structure, Infomation Industry Ministry, combining former Electronics Ministry and Post and Telecommunications Ministry, was founded. Thus seperation between govenment and enterprise was started in telecommunications industry and post business and telecommunicaton business were running seperately • 2000: Infomation Industry Ministry decided to reshape China Telecommunication and remove its the paging, satelite and mobile business. • 2002, fixed telecommunication operator were further reorganization. CNC was founded , there are 6 telecom operators, in Chinese telecommunication market and competition in different market segments is initiated.

9. Market Share of Revenue of Chinese Telecom Industry China Telecom 62.38% China Mobile 37.88% Market Share of Revenue By July of this year Market Share of Fixed Line By July of this year， China Railway Tecom 1.97% CNC Group 16.08% China Unicom 14.16% China Telecom 29.89% CNC Group 33.57% Others 4..4%

10. Outline • Telecom market development in China • Reorganization of Chinese Telecom Industry • Telecom Network development in China • China Next Generation Internet (CNGI) Project in CNC

11. Intellectual network platform Air shower's message ATM PSTN BAS PHS X.25/DDN/FR IP Letter order network Chinese telecommunication network current situation Insert wirelessly Terminal part Supporting system Business platform of broadband Business platform PHS Network management system Air shower's cell-phone WLAN LMDS/MMDS Desk-top terminal station Authentication , charging Insert wiredly POTS Narrow band access ADSL CPE Tent, customer service ADSL SDH/MSTP LAN H.323 terminal station Synchronous network Optic fibre / WDM / microwave / satellite

12. The control pointof the business access (SSP/BAS/GGSN…) Use the service system supporting system of business Management The Chinese telecommunication network is to the network gradual progress of future generation Third party's application Access technology Terminal part O S S Supporting system Use layer API FTTX / wired access Control layer Intelligent , muti-business terminal station PACKET CORE Broadband Access wirelessly Muti-business inserting Bear layer Intellectual Optic fibre networks Synchronous network Convey layer Optic fibre / WDM / satellite

13. Outline • Telecom market development in China • Reorganization of Chinese Telecom Industry • Telecom Network development in China • China Next Generation Internet (CNGI) Project in CNC

14. Chinese government & CNGI • Basic policy • Actively support IPv6 • Develop trial projects and implement it step by step • Set new requirements, standards and regulation to speed-up development of IPv6 market • Government entities involved • SCIO(State Council Information Office) • MII ( ministry of information industry ) • MOST ( ministry of science and technology ) • SDPC ( State Development Planning commission ) • … • related research institutes • NSFC ( national natural science foundation of China ) • CAE(Chinese Academy of Engineering) • … • none-profit network • CERNET(chinaedunet) • CSTNET • … • IPv6 Industry in China • Operators: CT, CU, CMCC, CNC, CR • Domestic vendors : Huawei, ZTE, Jiaxun feihong, Northern Jiaotong university • Standards and technology R&D began at: • Basic protocol, networking mechanism • Mobile IPv6 • IPv6 routing protocols, such as OSPF, BGP

15. NGI progress in China • 1998, CERNET-IPv6 Test-bed started • 1999, IPv6 demo system started （ MOST 863） • 2000, NSFCNET started （ NSFC ） • 2001, IPv6 MAN demo system started（ CAS） • 2003, CNGI (Chinese Next Generation Internet) project (see below

16. CNGI Node China Telecom China Netcom China Mobile China Unicom China Railcom

17. China Next Generation Internet (CNGI) Project Requirements for the CNGI Pure IPv6 network • High performance • Mobile/Wireless support • Network security guarantee • Setup reasonable charging/business Model • NGN & NGI • NGN is a kind of network in which IP Package digital communication is the core technology. • We pay mach attention to the market requirments and the smoothly transition from current network to NGN or NGI. Target: • Test-bed for the next generation Internet • Study network Services • Demonstrate Applications • Provide real Commercial Services • Should use Chinese industry equipment

18. CNGI progress • Phase one • From 2003 to end of 2005, setup the demo network • Phase two • From 2006 to 2010, large scale deployment throughout China

19. Applications in CNGI • Video stream • Network Grid • Environment monitoring • Remote control, virtual lab • Mobile and wireless applications • Advanced manufacturing • Remote education, digital library • Medical care • …

20. Key Issues to be addressed by CNGI • Standard study • Large scale routing (BGP implementation…) • Large Scale multicast • QoS • Mobility • Management(BOSS) • Migration from IPv4 to IPv6 • Accounting and business model • …

21. We search for further excellence! Thank You!