Leading 5G development
Joe Kelly, VP International Media Affairs,
Corporate Communications Department – Huawei
Interview: Khalid Athar
Khalid Athar: Would you like to share Huawei’s journey in the competitive landscape?
Joe Kelly: When we entered the carrier market, we entered an industry which had very well-established vendors, most of them being decades old. Today we see Ericsson, we see Nokia as a combination of Alcatel Lucent and Nokia, and we have seen a lot of change in the vendor space and the carrier space. We entered a market with strong competition through innovation and eccentric thinking by developing solutions that helped customer problems by offering quality service and we were able to win despite tough competition. Then we entered the consumer market and in the consumer market we had tough competition from Apple, Samsung, HTC and many others and we managed to develop our business to become the third biggest in the market through the same approach, i.e. bringing innovation to the customer, thinking about what the customer needs and making the customer’s voice, the largest voice in the company.
When we want to make any investment, we simply listen to the voice of the customer. The competition is good for markets, it drives innovation, drives value, drives the quest for finding what needs to be done and our view is very simple with regards to competition. We don’t think too much about others. We know that if we can meet the needs of our customers through technology, through consulting, through more value, and through innovation, then the real competition is in the mind of the customer to choose who is better and why.
KA: What measures is Huawei taking to accelerate the development of 5G technology and will 2020 be the year of widespread adoption of 5G?
JK: Our drive in terms of 5G has been in a couple areas, one of which is developing standards and setting the standards for 5G. Today, we are making the foundation for 5G (it’s kind of like the days of 3G) and Huawei set up the foundations, the base stations in those days. We took an active role in the development of 4G so we led many of those discussions and standards for 4G, we invested in property alongside and connectivity and we have been doing the same with 5G since 2009. The same year the world’s first 4 generation arrived (it was Huawei network in Nordic with TeliaSonera), the same year we started our R&D in 5G. It’s been 8 years in 5G R&D so far.
Some of the key technology aspects we are looking at is the interface. If you have 5G technology, we are looking at a device downloading multiple GBs per second and considering that,
– how do you maintain your battery,
– how do you manage the spectrum,
– how do you make spectrum more efficient and so on.
This discussion isn’t new with 5G, it’s a continuous process, a lot of what we did in 3G helped us in 4G, a lot of what we did in 4G gave us clues in 5G and then there is the reverse process as well so some of the research that we have done in 5G, we can actually implement it in 4G and in 3G as we are still selling 3G in various markets and we are actually providing them better 3G technology than provided 10 years ago because that innovation has benefitted from continued progress in building 4G and then 5G.
Will 2020 be the year of widespread adoption of 5G? That’s really a question to be answered by the carriers. For every mobile generation technology, there are early adopters and then mainstream adoption. Between the early adopters and first few stations and the widespread market availability, my guess would be 2020 will be in a state of rush. I know that carriers in Korea, Japan, China, USA and Europe wish and expect 5G to be delivered in 2020 but what that means in terms of national availability, widespread availability, active markings and so on, that’s where you need the carriers comment. I think we have several years of continuously driving 4G forward into 4.5G before we see true 5G.
KA: What leadership role is Huawei taking in the development of 5G?
JK: Do you define your role in 5G development to be leadership-based?
A lot of what we are doing in 5G is related to standards. We have also been involved in many trials all around the world. Moving on from the first range of trials that were conducted in the laboratories, we have now taken the trial and testing into the real world where we are testing 5G in various environments such as populated areas, high-rise buildings, less public areas, different climates, different environments and observing how it works in different scenarios.
If you look at the initial idea of 5G, it will have three key characteristics;
– latency of 1 millisecond,
– connection capability to 100 billion devices
– 10 GB per second peak speed
The active trial and testing is designed to test our ability to deliver that vision but at the carrier level there is the need to have good quality and it will have to be delivered to a mass market at the same time. So, there is still more testing to do, more trials to do but we are proving concepts ahead of the standards agreed on.
Huawei is not the only company driving 5G technology. Our competitors are also working in this area and it’s in all our interests to get 5G right. We are all building standards and we don’t believe Huawei has “all” the best ideas. We are trying to work in a cohesive system with partners, just trying to bring the best brains in the world to have a discussion on 5G so that we can deliver to the market what it really wants and so far, it’s working quite well. We think Huawei is the leader in 5G development and we are ahead of our competitors. I think when 5G becomes a commercial reality, Huawei will be the leader of that market.
KA: Having invested 10% of revenue every year into R&D, Huawei must have developed a very strong R&D portfolio by now. Would you like to give us some insight into your Intellectual Property strategy?
JK: Having Intellectual Property rights is the ticket that allows you to make returns on the investment that you made in the first place. In 2016, we invested 11 billion dollars into R&D and last year we invested 14.5% of the revenue into R&D. If we keep investing at that level, we have to get some returns on that investment and the intellectual property rights is the way to do it. We have a team of hundreds of lawyers who are actively filing patents all around the world. They are supported by external law firms who are also involved in the patents.
We now have one of the largest patent portfolios in the industry. We spent quiet a lot of money managing the patent system but that is how we protect the innovation we have and in return for that we do achieve revenue from that intellectual property portfolio if other companies want to use our intellectual property and or sometimes they can exchange their own intellectual property for us to use it. In addition to improving our technology, our business, our product and service, IP adds significantly into the revenue. We sometimes suffer from what people call “patent war” because R&D is a big investment and IPR is the winner’s ticket.