Building networks and platforms for a connected Middle East
Mr. Charles Yang in his role as the President of Middle East Region for Huawei oversees all Huawei group activities and around 5,000 employees. Mr. Yang joined Huawei in 1999 and has over 16 years of experience in the telecom industry playing a key role in many of Huawei’s milestone global projects including his role as the president of Huawei’s STC Group account. Over the latest 3 years, Mr. Yang has been active in Saudi Arabia, supporting the development of the Saudi telecom industry.
Huawei recently celebrated its 15th anniversary in the Middle East. Teletimes spoke to Charles Yang on the occassion about Huawei’s achievements over the period, and more importantly the future of the group in an IoT and 5G connected world.
Khalid Athar: Huawei has been a leader in research and development of 5G technology. What can you tell us about the developments so far? How soon do you expect it to become feasible for operators in the Middle East?
Charles Yang: People and things-centric 5G technology will bring a new level of user experience to the world, and in fact, 5G is a cornerstone to application scenarios such as the Internet of Things (IoT), ultra high-definition video, virtual reality, smart sensors, and so on. 5G
technology will be deployed as a mainstream technology to support applications and IoT scenarios requiring ultra-low latency and ultra-high bandwidth like 10GBPS; all for an increasingly high number of connections around 100 billion by 2020.
Huawei collaborates with industry bodies, leading operators and universities to drive the ecosystem development of 5G. Huawei has internally invested heavily in 5G research, with over 500 engineers on board and nine R&D centers worldwide as of last year, all focused on 5G research. Our efforts were recognized earlier this year when Huawei was honored as making the “Biggest Contribution to 5G Development” at the recently held 5G World Summit 2015. By 2018, Huawei will have invested USD$600 million in 5G research.
By leading efforts to trial the technology globally over recent years, Huawei aims to deploy the first 5G networks by 2018, with more widespread commercial operations powering up by 2020.
KA: The consumer business of Huawei has already become the third largest producer of smartphones in the world. However, the carrier network business group of Huawei still dominates the other business groups as in the past. Do you think this trend will continue in the future?
CY: With Huawei’s well-balanced, worldwide presence, we are confident that we will maintain steady growth and development in all three of our main business groups in future. Our carrier network business group has traditionally been the largest, but as you note, we are now well known in other areas as well.
Within Huawei’s enterprise business group, for example, the extensive application of our cloud computing, storage, agile network, and other flagship solutions in the fields of finance, education, healthcare and others led to sustained growth in the first half of this year. Huawei’s end-to-end capabilities are of particular value in the development of national ICT initiatives including Smart Cities in the Middle East; an example of how Huawei joins its expertise across the carrier, enterprise and consumer markets to build a better connected world.
Huawei applies learnings and best practices across its business groups in order to bring the very best-in-class solutions & experiences to our customers. The customers who are simultaneously served by all the three business groups know how these three units are like three legs of tripod; all supporting a master vision. Huawei ultimately exists to serve customers, whose demands are the driving forces behind our development. As their needs evolve, we too will evolve our focus accordingly.
KA: As a seasoned telecoms vendor, what is your advice for telcos in terms of infrastructure investment for the coming years?
CY: Telcos have created world-class communication & internet infrastructures in collaboration with strategic partners like Huawei. This ICT infrastructure has raised the bar of living standards across all walks of society. The additional good news is that consumers’ demand for data & application services is steadily growing, and it leaves enormous head room for operator’s growth in terms of traffic & revenue. Operators need to focus on building networks & platforms that can support escalating amounts of data and support tens of millions of enterprise applications and hundreds of millions of individual applications.
This means looking at an ICT framework which is both broader and smarter-allowing operators to monetize & leverage every piece of investment. Operators also need to consistently be investing in such infrastructure or run the risk of lowered revenues and customer churn. In particular, there is a transformation happening in terms of how telecom operators manage their own IT platforms, moving from traditional support functions to value-added business platforms. The maturation of the Internet of Things, e-Commerce, and digital media are all driving the restructuring of legacy IT systems within the telecom sector. According to IDC, the Middle East and Africa region will spend over $270 billion on IT during 2015-a rise of around 9% year on year-with telecommunication firms in particular expected to transform to become IT & digital services players.
CY: The efforts of UAE Government towards smart city development is commendable and it will be a benchmark for other smart city projects contemplated anywhere in the world. We recognize that our world is increasingly city-centric. Within the Middle East, cities of the future will need to become more intelligent through connected infrastructure that can positively transform the way in which citizens and businesses experience their world.
The role of networks and platforms is fundamental in powering innovations across vertical industries, from self-piloting automobiles to telemedicine and e-classroom education systems. The good news is that telcos already have the networks and some platforms, combines with a wealth of experience, to operate these digital assets as services. Telcos can deliver essential smart-city platforms of sensor and actual networks, data collection, device management, business intelligence, rating and charging to any or all of the application domains. Furthermore, telecom networks which are robust and resilient are an important synergy with smart city prerequisites. That’s how CAPEX-intensive smart city project can be optimally carried out in collaboration with telco’s existing OPEX-oriented ICT infrastructure.
Today leading telecom operators rely on Huawei’s state-of-the-art technology & solutions as a backbone to their business. Huawei has proven its ability to innovate and stay abreast with the latest ICT technologies meant to enrich peoples’ lives. As a result, our telco customers see Huawei as a strategic partner for their business growth, instead of only a vendor. We are committed to live up to the expectations of our valued customers. At Huawei, we already offer an extensive range of products and services to make smart city applications a reality. To date, Huawei has participated in over 60 smart city projects in more than 20 countries worldwide, cooperating with over 1,100 technology providers and 800 services & system integrators. Over the coming years we will see at least 20 smart cities coming up in the GCC to support the aspirations of the public to live more comfortably and efficiently.
KA: How would you compare the UAE with the other Middle East markets?
CY: The UAE really is a gateway to the world. It is a strategic trading and banking hub for the Middle East as well as Western & Eastern countries. Moreover, Dubai is increasingly recognized as a regional and international hub for business conferences, bringing a lot of opportunities from places like Africa and Asia to companies operating in the UAE. By virtue of its landmark initiatives in the field of technology and infrastructure, today the UAE is on the global map and will continue to be in future.
Among the most recent initiatives in this area are the Dubai Smart City strategy and the upcoming Expo 2020 Dubai, which have caught the gaze of the global business community as both an investment destination & a launch pad for their globalization drive in Middle East. These will require ongoing investments in ICT infrastructure to be stepped considerably.
KA: In the journey of entering an international market and becoming one of the top players, what have been the greatest challenges for Huawei?
CY: Huawei has always viewed the Middle East as a significant market where we can contribute to the development of the ICT industry. Since the beginning we have expanded in line with the needs of our regional partners. This year actually marks our 15th anniversary in the Middle East, and that is an incredibly important milestone for us. Fifteen years ago Huawei’s corporate structure looked considerably different than it does today. It is not always easy to keep pace with the rapid and extraordinary changes happening in the ICT industry. To do that, we have adopted a long-term approach to research and development (R&D) investment by putting over 10% of our sales revenue into R&D every year. Today we are a leader in terms of intellectual property, and that allows us to create solutions that are unparalleled in the market.
KA: How do you see the future of Huawei in the region for the coming years?
CY: In the past three years, Huawei Middle East has grown at a consistent pace of around 20% CAGR. With a new technological transformation just around the corner, that pace will likely continue. Moreover, during the next 15 years I think three major advancements will characterize the ICT landscape.
- First, a fully connected world will be established as 5G mobile broadband changes our lives. 5G will be deployed as a mainstream technology to support applications and IoT scenarios.
- We anticipate seeing at least 20 smart cities emerging in the GCC—including Saudi Arabia—to support the aspirations of the public to live more comfortably and efficiently.
- Finally, more cross-sector innovations will appear in the form of new energy technologies, artificial intelligence, Industry 4.0 and smart homes.
ICT will become a primary social and economic enabler. This will create unprecedented opportunities for the whole industry to propel the Middle East economy into the next phase of staggering growth; driven by ICT. Huawei is a leading ICT technology partner that will apply global and local experience to make the ICT journey of the Middle East one of the most energized, successful, memorable and historic transformations for the future.