Huawei Offers a Mobile World Congress Sneak Preview
Feb 22, 2017
The Mobile World Congress (MWC) easily ranks as the top global telecom conference in terms of sheer size and audience. Last year’s edition shattered previous records, reaching close to 101,000 attendees from 204 countries. The relevance of the show to telco equipment vendors is clear, as operators account for roughly 20 percent of the demand for the world’s IT hardware.
With so many meetings, sessions, round table discussions, new product introductions and meetings at MWC, it is hard to capture the attention of the analyst community. Not surprisingly, many chipset and infrastructure suppliers started to host events prior to the start of the show (Sunday), a practice that began years ago. However, these days, these vendors are holding pre-MWC meetings to share with the press and analyst communities their main areas of focus during the conference and market outlook.
Huawei Technologies Co. Ltd. just held one these events in London last week, having several of its key executives deliver presentations in what the company sees as the key areas of growth in the coming months, most noticeably cloud, video and longer term, 5G. Mobile operators will experience a lot of turbulence in 2017, including even some factors above and beyond their control, such as currency fluctuations. The vendor wants to position itself as the ideal business partner to help wireless carriers navigate through this uncertainty.
Towards that goal, Huawei has adopted a two-pronged strategy for this year, focused on establishing video as a key revenue engine that carriers should invest in, and the cloud, as a fundamental piece of an operator’s digital transformation journey ahead of 5G.
“Video is king”
Zhilei Zou (President of Huawei’s Carrier Business Group) and Kunlong Li (Director of Huawei’s Carrier Video Business) both identified video as a key lever to help operators grow their Average Revenue per User (ARPU) while reducing their subscriber churn.
Ken Wang, the company's President of Global Marketing and Solution Sales, suggested video can be a trillion-dollar opportunity. Wang believes video will allow carriers to monetize broadband capacity, while opening new revenue streams for enhanced Quality-of-Service (QoS) (e.g. charge more for 4k video services), and achieve what Huawei terms “ecosystem monetization” via advertising, education, e-health, gaming and shopping with the help of partners such as Independent Software Vendors (ISVs).
As Wang pointed out over 60% of traffic is video, and video is about to become the next basic service from telcos. Therefore, video is about to become the 21st Century dial tone. Of course, the end-user experience is fundamental, and to ensure that the QoS is a good one, the network quality has never been so critical. In order to achieve such a good quality in a scalable and cost-effective manner, it is imperative for service providers to accelerate their digital transformation by embracing the cloud.
Cloud: A Key Building Block of Future Networks
Libin Dai, Director of the Network Transformation Management Department of Huawei’s Carrier Business Group Marketing highlighted the importance of the cloud in Huawei’s strategy by stating his company’s commitment “to becoming the advocator, enabler and leader of all cloud”. Huawei is targeting to adopt that strategy in all of its products and solutions within two to three years. Dai regards that goal to be fundamental to “enable the business success of our customers”, and Zou agreed that “only when the carriers grow can Huawei grow”.
Huawei has a comprehensive lineup of cloud offerings in its portfolio, including its flagship CloudRAN platform and its CloudAIR product (introduced in November 2016) to allow a carrier to dynamically and efficiently share its network capacity. The advent of technologies such as Software Defined Networking (SDN) and Network Function Virtualization (NFV) will unleash a new era in which operators will deploy cloud-native capabilities, while embracing new IT models such as DevOps and approaches such as microservices.
As the cloud evolution takes hold, “Huawei has no vested interests to protect”, pointed Zou, which should help position the company as a trusted advisor with the telcos. He also noted that his company has always emphasized its R&D, and now spends 15% of its revenue on various research efforts (over $8B a year).
The Centralized RAN (or C-RAN) architecture has emerged to improve network density, while lowering the cost of running a network, by shifting key functional elements into a centralized processing hub. Since China Mobile was an early champion of this approach, Huawei and ZTE have gotten an early jump over their Western competitors (such as Ericsson and Nokia) in this segment.
What About 5G?
The Huawei vision articulated in its London event was that as a precursor to 5G, operators must support advanced video services and start virtualizing or “cloudifying” their network functions. According to Dr. Yuefeng Zhou, CMO of the company’s Wireless Network Product Line, Huawei will have its initial 5G products commercially ready for the market in 2018, when the initial set of standards are expected to be released. Zhou sees operators deploying 4.5G technology as a precursor to 5G, and there are 68 such networks commercially, increasing to more than 120 this year.
Longer term, the prospects of the industry are still bright, since 5G can also serve as a means to enhance household broadband connectivity. Huawei is bullish on this angle, as it highlighted that there still remain over 3 billion people without any Internet access, above 2 billion without mobile service, and more than a billion without access to broadband.
Ronald Gruia is the Director for Emerging Telecoms at Frost & Sullivan. He is available at email@example.com.
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