White Paper on the Commercial Application Scenarios of Gigabit Broadband Networks 2 Contents 1 Gigabit Broadband Era 1 2 Ten Commercial Application Scenarios of Gigabit Broadband Networks . 3 2.1 Overview 3 2.2 Cloud VR 4 2.2.1 Market Space . 5 2.2.2 Business Model and Practice . 5 2.2.3 Network Requirement 7 2.3 Smart Home 8 2.3.1 Market Space . 8 2.3.2 Business Model and Practice . 9 2.3.3 Network Requirement 9 2.4 Gaming . 10 2.4.1 Market Space . 10 2.4.2 Business Model and Practice . 11 2.4.3 Network Requirement 12 2.5 Social Networking 13 2.5.1 Market Space . 14 2.5.2 Business Model and Practice . 14 2.5.3 Network Requirement 15 2.6 Cloud Desktop 16 2.6.1 Market Space . 16 2.6.2 Business Model and Practice . 17 2.6.3 Network Requirement 18 2.7 Safe City . 19 2.7.1 Market Space . 19 2.7.2 Business Model and Practice . 20 2.7.3 Network Requirement 20 2.8 Enterprise Cloudification 21 2.8.1 Market Space . 22 2.8.2 Business Model and Practice . 22 2.8.3 Network Requirement 23 2.9 Online Education 24 Broadband Development AllianceWhite Paper on the Commercial Application Scenarios of Gigabit Broadband Networks 3 2.9.1 Market Space . 24 2.9.2 Business Model and Practice . 25 2.9.3 Network Requirement 25 2.10 Telemedicine . 26 2.10.1 Market Space . 27 2.10.2 Business Model and Practice . 27 2.10.3 Network Requirement 28 2.11 Smart Manufacturing 29 2.11.1 Market Space . 29 2.11.2 Business Model and Practice . 30 2.11.3 Network Requirement 30 3 Conclusion and Outlook 32 3.1 Promotion in Economic and Social Development 32 3.2 Timeline for the Deployment of 10 Commercial Application Scenarios 34 3.3 Business Model of Gigabit Broadband Networks . 35 3.4 Future Prospect of Gigabit Broadband Networks . 35 A Acronyms and Abbreviations 37 Broadband Development AllianceWhite Paper on the Commercial Application Scenarios of Gigabit Broadband Networks Page 1 of 37 1 Gigabit Broadband Era At present, the world economy is going digital. ICT has become a common choice for policy makers to realize sustainable development and enhance national strength. Technologies enabling ICT investment and deployment include broadband, data center, cloud, big data, Internet of Things IoT, and artificial intelligence AI. The amount of digital economy is expected to reach USD 23 trillion in 2025. The blossoming of digital economy makes the support capability of broadband networks increasingly prominent. Broadband has become an indispensable strategic infrastructure for economic and social development. In recent years, great achievements have been made in the construction of broadband networks in China, and FTTH networks have covered the whole country. By 2019 Q1, the proportion of users with a 100M access rate in China reached 73.3. The access rate of fixed broadband was estimated at about 120.2 Mbps. Fiber broadband users accounted for 91.6 of all broadband users. With the development of fiber broadband access technologies and the gradual application of bandwidth-hungry services such as HD video, smart home, and cloud VR, Gigabit broadband will become the focus of global broadband development. According to the latest statistics from OVUM, 234 operators in 57 countries have released Gigabit broadband construction plans to facilitate social and economic digital transation. Government Policy Promotes Gigabit Broadband Development Many governments have ulated relevant strategies or policies to encourage the development of Gigabit networks. According to the government work report in 2019, China will launch demo projects to extended 1000M broadband connectivity to urban homes and upgrade networks to support distance education and telemedicine to provide faster and more reliable broadband connections for Internet users. At their cutive meeting on May 15, 2019, the State Council expressed their resolve to further accelerate broadband rates and reduce prices. “Accelerating network upgrade and expansion should be a vital focus of investment. The goal is to achieve over 90 FTTH access ports in 2019. In more than 300 cities, Gigabitaccess networks should be deployed to drive fixed and mobile broadband access into the gigabit era.“ Mature High-Broadband Services Accelerate the Commercial Use of Gigabit Services Video content services represented by 4K, 8K, AR, and VR have blossomed. In China, the 4K content duration has exceeded 10,000 hours, and the penetration rate of new 4K TV has exceeded 70. The number of global mainstream VR plats applications has exceeded 6000. Cloud VR has a complete E2E ecosystem built in the industry and large-scale deployment conditions are met. The mature application of high-broadband services is driving the commercial use of Gigabit broadband in China. Broadband Development AllianceWhite Paper on the Commercial Application Scenarios of Gigabit Broadband Networks Page 2 of 37 Since 2018, Chinas big three telecom operators are proactively promoting gigabit network deployment and exploring gigabit application innovations. By the end of May, 2019, operators in nearly 20 provinces in China released 1000M commercial packages and worked with industry partners to carry out a large number of service innovations based on Gigabit broadband. For example, the smart broadband launched by China Telecom provides products, applications, and services of smart connection, smart TV, smart networking, smart application, and smart service. The intelligent broadband launched by China Unicom provides smart TV, smart home, WO fixed-line phone, and WO home surveillance. Mature Technology Industry Drives Commercial Applications Looking back at the development of the fixed communications field in China, the field enters the gigabit access era based on the 10G PON fiber access technology from the voice era based on copper access technology. Driven by the “service innovation technology development“, all things will be sensing, connected, and intelligent. Figure 1-1 Development history of fixed broadband The 10G PON access technology and related industries are mature. International standard organizations IEEE and ITU-T take the lead in developing and releasing relevant technical standards. In terms of key components, mainstream vendors 10G PON core processing chips and optical modules are ready for batch production and large-scale delivery, which meets operator requirements for large-scale deployment, broadband acceleration, and price reduction. Compared with the previous generations of fixed access technologies, 10G PON gigabit broadband is a great leap forward in terms of bandwidth, user experience, and connection capacity. It delivers symmetric upstream and downstream rates as high as 10 Gbps and a latency as low as 100 us. These changes will drive the fiber network to break through the traditional industrial edge and connect everything including every room in a home, every office building, and every industrial device, and will promote social development in an unprecedented way. Broadband Development Alliance Page 3 of 37 2 Ten Commercial Application Scenarios of Gigabit Broadband Networks 2.1 Overview The coverage of Gigabit broadband networks pushes the convergence of upstream and downstream industries to release the huge potential of the industries, thus affecting the economic development and changing the way people produce and live. It is believed that as commercial scenarios, industry ecosystems, and Gigabit broadband networks are ready, Gigabit broadband networks will bring about profound changes at the access network level, creating more commercial application scenarios and a new era full of opportunities. This white paper introduces 10 commercial application scenarios of gigabit fixed broadband networks, including cloud VR, smart home, gaming, social networking, cloud desktop, safe city, enterprise cloudification, online education, telemedicine, and smart manufacturing. These scenarios have high requirements on network bandwidth. Because the industry ecosystems and commercial applications are nearly mature, these scenarios will become key service applications in the Gigabit broadband era and lay a foundation for future service development and commercial application. Based on each typical commercial application scenario of Gigabit broadband networks, this white paper analyzes the market space of service scenarios, summarizes the typical business models of Gigabit broadband network providers, provides specific commercial cases, and puts forward network requirements that support the implementation of commercial scenarios. Broadband Development Alliance Page 4 of 37 Figure 2-1 Commercial application scenarios of Gigabit broadband networks Legend 1. Cloud VR 2. Smart home 3. Gaming 4. Social networking 5. Cloud desktop 6. Safe city 7. Enterprise cloudification 8. Online education 9. Telemedicine 10. Smart manufacturing 11. SD video 12. Holographic video 13. Internet access 14. Refined cultivation 15. Intelligent transportation 16. Intelligent power distribution 2.2 Cloud VR Cloud VR leverages high-speed and stable networks and sends encoded and compressed display output and sound output on the cloud to user devices. It delivers a 360-degree view and immersive experience to users, and has been put into commercial use in fields such as movies and games. The cloud VR service application is based on the interaction of a large Broadband Development Alliance Page 5 of 37 amount of ination between user devices and the cloud server. Therefore, it has high requirements on network bandwidth and latency, and is a typical commercial application scenario of Gigabit broadband networks. 2.2.1 Market Space The “perception“ of the physical world and the “interpretation“ of the digital world tend to be converged. HD videos such as 4K, 8K, and 32K videos will multiply the depth and sharpness of individual digital interpretation. The development of AR/VR applications will add dimensions for interpretation. As estimated in Huaweis global industry vision GIV reports, global VR users will reach 440 million in 2025, and the output value will reach USD 292 billion. According to IDC predictions, the output volume of VR headsets will grow at a high speed with a compound annual growth rate of 66.7. Figure 2-2 VR headset market prediction Data source Worldwide Quarterly Augmented and Virtual Reality Headset Tracker from IDC 2.2.2 Business Model and Practice The development of the cloud VR service requires a gradual process. From the perspectives of content maturity, user experience, and industry maturity, the development can be divided into three phases short-term cloudification, medium-term cloudification, and long-term cloudification. Broadband Development Alliance Page 6 of 37 Figure 2-3 Three phases of the cloud VR service development Data source Huawei iLab The following provides the details of the phases  In the basic service phase of cloud VR, scenarios that already support cloudification such as cloud VR video and cloud VR gaming, are developed first to seize market opportunities, establish a service basis, and cultivate user habits.  In the basic service phase, users, content aggregation experience, and business model experience have been accumulated. Medium-term cloudification scenarios will be promoted quickly once the industry technologies are mature.  After 2C users are developed, services can expand to the 2B field to aggregate more industry applications and build a cloud VR service ecosystem. Figure 2-4 Business model of the cloud VR service Broadband Development Alliance Page 7 of 37 Success stories  Cloud VR provided by China Mobile Fujian On July 18, 2018, the company officially released the worlds first cloud VR service, which was initially implemented through the 500M broadband access service. VR live TV, VR VOD, VR IMAX, VR education, and VR gaming are provided for users. 2.2.3 Network Requirement Different VR service experiences have different network requirements. For Highly-Interactive Cloud VR service, latency and bandwidth are key indicators. Comfortable Cloud VR service requires 130 Mbps bandwidth and 20 ms latency. In the future, bandwidth will need to be at least 540 Mbps to 1.5 Gbps and latency no more than 8-10 ms. Table 2-1 Cloud VR service requirements on network capabilities Service Type Comfortable VR 8K Advanced VR 12K Perfect VR ≥ 24K Barely-Interactive Cloud VR Service Required bandwidth 120Mbps 420Mbps 1.14Gbps Latency 20ms 20ms 10ms Highly-Interactive Cloud VR Service Required bandwidth 130Mbps 540Mbps 1.5Gbps Latency 20ms 10ms 8ms Figure 2-5 Analysis of the correlation between the cloud VR service and 10G PON networks Rate Latency Reliability Number of service connections QoSBroadband Development Alliance Page 8 of 37 2.3 Smart Home The smart home service uses the broadband network, Internet of Things IoT, cloud computing, and other technologies to effectively integrate 4K/8K HD video entertainment, smart control over home appliances, ination exchange, and consumer services to create a healthy, secure, comfortable, energy-saving, and convenient personalized home life. Smart home devices are connected through Wi-Fi, ZigBee, and Bluetooth. Because smart home devices are connected to the smart home cloud server and the Internet, the network capability of transmitting a large amount of data and the broadband and stability of the connection to external networks will be the key. Therefore, Gigabit broadband networks will become the major bearer networks of smart home in the future. 2.3.1 Market Space Smart home integrates technologies such as Internet, computing and processing, network communication, and sensing and control, and is regarded as the next blue ocean market. It is estimated that each individual will have 5 smart devices in 2025, and 20 individuals will have more than 10 smart devices. Nearly 20 billion real-time online smart home devices will become a natural extension of individual and family perception. According to the latest OVUM report, the smart home industry is expected to grow by 129 in five years, which will be one of the fastest growing consumer markets. In 2023, the total smart home market will reach USD 154 billion, including equipment sales. Figure 2-6 Prediction about the market space of smart home Data source Smart Home Services Forecast Report 2018 –23 from Ovum Therefore, related industry chain parties including telecom operators, device manufacturers, and content providers are actively advancing into the smart home field. For example, China Telecom launched smart broadband, China Unicom launches smart WO home, and China Mobile also launched their smart home products and services. Operators outside China such as ATT and Verizon have also announced their advance into the smart home field. Broadband Development Alliance Page 9 of 37 2.3.2 Business Model and Practice Compared with smart home manufacturers who sales single devices, telecom operators have a