The 5G era is defined by the cloud, as we are now witnessing the convergence of cloud and carrier networks. Cloud-network convergence is predicted to drive the development of a diverse range of industry applications and drive the digital transformation of all industries.

China Telecom, one of China’s three major carrier groups, boasts a larger cloud portfolio than any other carrier in the world. China Telecom has been pursuing a strategy of leveraging the advantages of "5G + e-Cloud", and has opted for a standalone approach to its deployment of 5G architecture, in contrast to the non-standalone approach of carriers whose early 5G deployments piggybacked off existing 4G architecture. What is China Telecom’s 5G + cloud-network convergence strategy? What can the industry learn from its experience so far?

On July 27, 2020, Liu Guiqing, Vice President of China Telecom, delivered a speech entitled "Promoting Cloud-network Convergence and Enabling Digital Transformation" at the Huawei Better World Summit 2020, speaking about China Telecom’s cloud-network convergence strategy and its implementation.

Cloud-network convergence is the foundation of digital transformation
China Telecom has been working at the forefront of cloud computing for years. In 2016, the carrier collaborated with Huawei to launch its e-Cloud 3.0 products and services. Since then, China Telecom has further enhanced the competitiveness of e-Cloud with technology upgrades and service optimization, and developed a reputation for security and trustworthiness. Cloud-network convergence is a major way China Telecom has differentiated itself from competitors in its home market. The company can even offer its customers customized cloud solutions. e-Cloud is the top hybrid cloud and largest carrier cloud in China. In the public cloud market, it ranks third in the country and seventh in the world. In the fight against the COVID-19 pandemic, 5G + e-Cloud has provided strong support for epidemic prevention and control as well as the resumption of work and production.
In his speech, Liu explained how the benefits of cloud-network convergence and 5G + e-Cloud had enabled China Telecom to quickly mobilize in support of the fight against the COVID-19 epidemic. For example, its 5G networks and e-Cloud platform allowed the construction of the Huoshenshan Hospital to be streamed live. Millions of people went online to watch as the hospital rapidly took shape, providing a morale boost for the whole country at a time when it was sorely needed. The launch of the e-Cloud learning platform ensured that classes could continue while schools were suspended. A dedicated app was released to provide accurate data for epidemic prevention and control by using big data. 5G healthcare solutions allowed hospitals carry out efficient consultation and treatment.
The battle against the epidemic highlights the value of cloud-network convergence, and has also stimulated the digital economy and accelerated the digital transformation of industries. According to projections by the market intelligence firm IDC, the compound growth rate of the global digital economy will reach 36% over the period from 2018 to 2022. By 2022, GDP of the global digital economy will reach US$46 trillion, accounting for 46% of the total economy.
According to Liu, cloud-network convergence is the foundation of digital transformation, as it is essentially the convergence of IT and communication technology. This convergence not only supports China Telecom’s own network transformation, it also provides a foundation for digital transformation in various other industries.
Deploying cloud-network convergence with unique features
China Telecom describes its approach to enabling digital transformation as building digital infrastructure characterized by "network-based, cloud as the key, cloud-based network resource migration, and cloud-network integration". 
Liu highlighted China Telecom’s four unique features in deploying cloud-network convergence: hierarchical cloud layout, cloud-edge synergy, cloud-based network resource migration, and integrated cloud-network security.
China Telecom has named the hierarchical layout it is implementing the "2+4+31+X+O" cloud resource pool layout. This means that there are 2 large central data centers that serve the whole country, regional nodes deployed in 4 key areas (two nodes have been deployed outside Beijing and Shanghai, one in Guangdong province and another near the city of Chongqing in the southwest), and a data center in 31 different administrative regions. On top of these, X number of widely-distributed edge nodes have been deployed at the access layer closest to users, to achieve cloud-based network resource migration, easy cloud access, and smooth inter-cloud communication, bringing on-demand service selection and low latency to China Telecom subscribers. O refers to nodes outside China that are used to deploy services in other markets.
The network’s cloud-edge synergy relies on China Telecom’s extensive deployment of edge infrastructure, as well as the edge computing nodes and UPFs on demand in its 6000+ edge equipment rooms and 50,000+ local sites across China. China Telecom’s approach takes advantage of cloud and edge computing to build convenient and reliable edge service capabilities, and provide comprehensive digital solutions in collaboration with a range of partners. 
For cloud-based network resource migration, China Telecom has adopted both underlay and overlay models. The company relies on the widely distributed cloud resources of its e-Cloud and abundant network resources to provide users with services such as quick networking, private line access to the cloud, and multi-cloud interconnection. Today, POP nodes have been deployed in 31 different administrative regions in China, as well as in hot spot countries and regions outside China, such as Japan, North America, and Europe. Enterprises can connect to these nodes through the Internet, private lines, and 4G/5G mobile networks. China Telecom offers high-security channels based on IPsec and CN2 private networks to implement an application-level 7-layer traffic control and smart traffic steering. A single network tenant with tens of thousands of nodes can be accessed by millions of users concurrently.
China Telecom’s security measures include an anti-DDoS service, which protects devices, networks and the cloud.

5G + cloud-network convergence enabling industrial digital transformation
From the beginning, China Telecom has favored standalone (SA) architecture in its 5G development. As early as June 2018, China Telecom took the lead in releasing China Telecom Technology White Paper, clearly stating that SA architecture would be the company’s preferred approach to 5G network deployment. In October 2019, China Telecom launched the world’s first commercial 5G SA network in Shenzhen. In June 2020, GSMA and China Telecom released the 5G SA Deployment Guide together with global 5G industry stakeholders.
Liu emphasized that 5G SA is the best architecture for achieving cloud-network convergence. Through service-oriented architecture and cloud-based deployment, this SA architecture can fully support the three application areas of 5G: eMBB, URLLC, and mMTC. As an important engine for digital economy transformation and development, it can better facilitate the digitalization of vertical industries.
China Telecom and China Unicom have achieved positive results in joint 5G network construction and sharing. First, through cooperation, both carriers have greatly reduced their construction investment and operational expenses. Second, 5G network construction was accelerated. Base stations built by one of the parties can be used by the other, effectively doubling the construction speed. Third, service experience was improved exponentially. Through 3.5 GHz and 200 MHz carrier aggregation, the actual downlink rate can reach 2.7 Gbit/s, which is a new record for commercial UEs. Fourth, the joint construction ecosystem alleviated non-productive types of competition among carriers offering the same services, set a cooperation model for the industry, and has proven conducive to the health of the industry ecosystem.
China Telecom has completed deployments showcasing the potential of 5G + cloud-network convergence in areas including smart manufacturing and smart energy. Significant parts of the technology China Telecom is utilizing in these deployments were developed by Huawei. 
China Telecom and Huawei are working together in the following areas: facilitating digital transformation of the construction industry through 5G + cloud-network convergence, resolving data collection difficulties through 5G + industrial PON, optimizing production processes through 5G + Industrial Internet platform + A, and building a smart steel-framed three-dimensional parking garage through 5G + e-Cloud + Video AI to improve its operation and management efficiency. 
In the construction industry, 5G + cloud-network convergence has resolved issues regarding information collection, outdated production, and loose operational management. It improved the production efficiency by 10%, reduced the defect rate by 10%, the OPEX by 6%, and grew the annual contribution of the industry to GDP by 160,000,000 RMB.
China Telecom, Huawei and a power grid company have built a large-scale 5G smart grid test network with abundant scenarios and comprehensive ecosystem. This deployment has become a model for the entire industry. For power grid operators, network slicing is one of the key benefits of 5G. The smart grid verifies user experience and the security isolation capabilities of 5G network slicing from end to end, with checks covering terminals, base stations, transmission networks, core networks, edge computing, and slice management. In addition, China Telecom developed a three-layer network slicing management platform. The platform interconnected with the integrated power service management platform northbound through APIs so that slices could be visualized, managed, and controlled. The smart grid project focused on four areas: intelligent power distribution (including differential protection), power slicing & security isolation, remote substation operation monitoring (high-frequency collection + video surveillance), and load fluctuation smoothing. China Telecom is now at the forefront of the industry in all these areas. 
"5G + cloud-network convergence is the foundation for enabling the digital transformation of both telecom carriers themselves and the companies that rely on them. This development will give new momentum to the digital economy. China Telecom is working with Huawei and other industry partners to build a new ecosystem based on 5G + cloud-network convergence, promote its applications in smart tourism, smart city, smart finance, smart logistics, smart transportation, smart manufacturing, and e-government, and facilitate the digital transformation of all industries.", Liu said.