What Should We Do Before 5G

Guo Ping, Huawei Deputy Chairman and Rotating CEO, Keynote Speech at MWC 2016

The theme of this year's Mobile World Congress (MWC) is "Mobile is everything". Mobile connectivity will be a very important part of a Better Connected World.

In our future digital society, connections will be like oxygen. We cannot live without connections, just as we cannot live without oxygen.

When our mobile phones have no signal, the shortest distance will feel like the longest in the world.

At last year's MWC, we talked a lot about 5G. No doubt 5G has become the direction of future technological evolution. Huawei has heavily invested in that area, and we will continue to invest.

However, even for the most innovative carriers, 5G will not be commercially deployed before 2020; it might take even longer to roll out 5G networks on a large scale.

As management guru Peter Drucker once said, the best way to predict the future is to create it.

Before 5G arrives, what should we do to address the uncertainties brought about by new technologies and new business models?

There are three things that we can do.

The first thing we should do is increase connectivity.

Huawei has published the Global Connectivity Index (GCI) since 2014. We estimate that by 2025, there will be 100 billion connections globally. Among them, 55% will come from the business world, such as smart manufacturing and smart cities. The value of connections lies in improving productivity and delivering better financial results.

The other 45% of the connections will come from consumer areas such as smart homes, the Internet of Vehicles (IoV), and wearables, which will greatly improve our quality of life.

The connections among 7 billion people will only account for 10% of the total. The majority of connections will be between people and things, and between things and things.

Today, 99% of equipment is unconnected to the Internet. So the first thing we should do is increase connectivity.

Yesterday, we officially established our global NB-IoT Forum. This will help carriers support the huge market for IoT applications.

Now I would like to share a case from the marine transportation  industry.

Customs clearance for long-distance logistics is a major factor that impacts the industry's efficiency. In marine transportation, people have added a special type of lock to some containers, and even small parcels.

This lock integrates GPRS, GPS, and RFID technologies, which can monitor the shipping process. If it can be proven that the lock has not been opened during the shipping, customs officers will allow these containers and parcels to pass quickly without opening them. This has greatly increased customs clearance efficiency.

Such tracking and communications require very low power consumption, wide coverage, strong signals, and high-density connections in specific areas.

NB-IoT is the key technology that satisfies these needs. This technology not only applies to long-haul shipping, but also to scenarios such as urban logistics, supermarkets, and asset transfers within companies.

After 4G, 4.5G will be the basic enabling technology for digital transformation.

4.5G will provide three basic features:

  1. A data rate higher than 1 Gbit/s;
  2. An HD voice and video experience anytime, anywhere;
  3. Large-scale IoT capabilities supported by NB-IoT.

These will also be the basic features of mobile networks over the next five years.

The second thing we should do is shift from being supply-driven to being demand-driven so as to enable vertical industries.

According to a UN report released in 2010, many strategies of the ICT industry have long been supply- rather than demand-driven.

Frankly speaking, we used to provide services based on the technologies we had. And verticals didn't really demand the telecom industry to change.

However, things have changed. We have already seen a shift from a supply-driven to a demand-driven business model.

As various smart city applications emerge from areas such as power grids and transportation, people will demand more from networks. This will mean more challenges for us, in terms of numbers of connections, bandwidth, and latency.

Now I'd like to use Safe City to illustrate how demand drives industry change.

I believe recent public security incidents are still fresh in our minds. When building safe cities, governments need to quickly increase their capabilities to prevent crises, respond to emergencies, and make decisions quickly.

To realize Safe City, we need to address specific challenges: Onsite situations are often not visible, information silos exist among municipal departments, and a uniform command is difficult.

Therefore, a good video experience is key, though this will exert great pressure on bandwidth. As we know, uploading one HD video often requires a bandwidth of 8 Mbit/s. It is extremely difficult for mobile carriers to transmit huge amounts of video data via their existing public wireless networks.

Let's look at a case in Kenya. Huawei helped local carrier Safaricom deploy a private Safe City network. It integrates broadband trunking to realize visualized end-to-end command. After the network was put into use, the crime rate in related areas decreased by about 46%.

In this project, Safaricom actually played the role of a System Integrator (SI) for private networks.

For future mobile networks, should we integrate high bandwidth requirements into public networks? Can we use virtual private networks (VPN) to provide services? If public networks are capable enough, will industries still want to have their own networks? These are the questions we need to answer and discuss with industries.

The third thing we should do before 5G arrives is redefine network capabilities. Carriers need to establish software-defined architecture, achieve agile operations, and develop Big Data operation capabilities.

Huawei has launched the SoftCOM architecture. This architecture has enabled carriers to deploy software-defined networking, develop virtualized networks, and move networks to clouds. SoftCOM will truly enable ICT convergence.

Carriers need to choose a strategic partner that has integration capabilities. In addition, they should also develop their own integration capabilities and build a more open and innovative ecosystem.

Next, I would like to give an example about Huawei and China Unicom-Shanghai, and share what we have done to shift towards a next-generation Telco OS.

Compared with Internet services, it takes a much longer time to launch telecom services. This has been a big headache for us over the years.

Last year, Huawei helped China Unicom-Shanghai upgrade its business support system. As a result, its international bank clients can subscribe to private lines and cloud services within 10 minutes.

China Unicom also integrated Big Data analytics with its new service promotions, and developed targeted campaigns to increase its promotion success rate from 0.7% to 16% while greatly reducing complaints.

China Unicom-Shanghai has also conducted some trials in the application of Big Data in verticals, thus monetizing the value of Big Data. The company supplies anonymized data to marketing and advertising companies. This particular trial has generated around 4.5 million US dollars in the past two years.

I believe this is only a small part of a long journey. However, it's important to act, rather than waiting for new technologies to arrive and resolve all our problems.

Based on one forecast, the total digital transformation market will reach 15 trillion US dollars by 2025.

Before 5G arrives, we need to get started. We need to better understand the needs of verticals, and create new business models and new business value via new connections. We need to support verticals during their integration, and enable the digitization of traditional industries, thus driving forward a digital revolution.

Carriers will be at the core of a Better Connected World. We would like to work together with them to create a better network environment, so everyone can enjoy the convenience of connections.