Huawei lays out plans for ICT transformation and $350m R&D investment

VENDOR SPOTLIGHT – HUAWEI

At MWC 2016, Telecoms.com partnered with Huawei’s and spoke to its vice president of global technical services department, Bruce Xun. Xun shed light on the current state of the telecoms network infrastructure market, where telcos are looking to upgrade their existing systems and what the primary challenges facing operators are.

One of the biggest drivers for change in the industry is about managing forever growing consumer expectations.

“End user experience now is driving a lot of things,” Xun says. “Traditionally, the operator has always focussed on network-based KPIs; however sometimes it might appear to show perfect network operations, while the end-user experience is less than optimal. Today, if the optimal end-user experience cannot be reached, they can easily leave their operator and find another. Therefore, the operator today faces some major challenges, not to mention the threat of OTT.

“Look at apps, they’re constantly updating, always updating. They continue to give you more and more functions; and this can also subtly encourage more user expectation from their service providers. Before, the carrier defined what services they can provide to a customer – and they can do so because they know the limitations and capabilities of their networks. The user had no choice. But now, they have so much more choice because of OTT competition.”

Indeed, churn and dropping ARPU is one of the biggest fears for telecoms operators the world over in 2016. Regulatory measures are coming into effect in multiple territories to aid customer switching ability, putting further pressure on telcos to maximise quality of experience for their precious customers.

“Revenue growth is very slow and a siloed infrastructure-base means cost is very high,” Xun continues. “It can take 12 months, or even 2 years to launch a new service. In the past for Huawei these rollouts, even in software, can take a very long time. But let’s look at the IT industry and all the agility they have with things like DevOps; there’s certainly opportunity for operators to speed up, and continually give you more and more functions and the ability to roll them out.”

“Based on different strategies, operators have a variety of ways to do ICT transformation. They’ll identify which areas of the business can bring them a lot of revenue and a lot of profit, and that is where they’ll focus on virtualization and centralization, so they can really exploit those services further.

Such exploitation, Xun says, is ideally suited to two areas of the network for telcos: the core for consumer mobile data services, or the access network for enterprise or video services.

“Mobile data will continue to provide them a huge level of profit if they can bring virtualization into the core network,” he says. “The core is a huge opportunity to reduce cost and improve time to market. Another route is to focus on the enterprise or video segments where the access network is the prime area for virtualization because that’s the biggest choke point in the network that can be solved.”

The theory is that a successful virtualization strategy implemented in one area of the network for one operator can facilitate a rapid, multi-geography rollout of ICT transformative efforts. All of this is driven by decision-making conducted a group level instead of a regional one, and Xun went on to discuss the data centre migration of Telefónica Latin America.

“If a global telecoms operator, like Telefónica, wants ICT transformation it’s normally decided at a group level. Last year we did the Telefónica Latin America data centre migration and transformation project. We did the cloudification and app centralisation from Latin America to Spain, and that’s not an easy project.”

With many of the technical elements of such projects in mind, one of the biggest challenges in any transformation effort is encouraging a change to the cultural and psychological elements of how networks and services are delivered.

“ICT transformation is not really about the technology, it’s about the mind set and that’s the biggest transformation for telecoms,” says Xun. “The people must change their behaviour, change their mind set in order to enable this new methodology. Using Telefónica Group as an example, their culture and mind set is extremely diverse because of the variety of countries in which they operate, so that’s a big challenge.”

The solution, Xun claims, lies in bringing together all of the systems required for transformation – from the variety of vendors and stakeholders involved – under one, comprehensive, integrated management system.

“A prime systems integrator can help traditional telcos transform their operational infrastructure, and also build a trusted platform to enable all third parties and vendors to cooperate and generate the required solution.

“They need, essentially, a third party prime systems integrator to handle the multi-vendor and multi-software environment. They need PSI to understand the communications technology industry. They need PSI to understand how to manage the user-experience and they need a vendor that can set up a platform to enable all the ecosystem players successfully. Finally, they need a PSI that can deploy the whole strategy.“

Meanwhile, Huawei also announced it will be plugging more than $350 million into research and development investment to further ICT transformation within telcos.

The Chinese infrastructure vendor will be focussing on the expansion of its “ROADS” initiative by investing heavily into solving the challenges associated with integrating a number of systems associated with ICT transformation and network virtualization.

“At the start of the year we’ve planned to invest another $350 million over the next three years into our integration efforts, helping to enable ICT transformation,” Xun explains. “Three years ago we had a lot of engagement in this space, but the biggest progress made over the last year has been rolling out live NFV projects, where we’re currently engaged in more than 50 projects, whether they’re commercially launched or in trial phase.”