Huawei outlines blueprint for kick starting digital services – Mobile World Live

Huawei outlines blueprint for kick starting digital services

16 FEB 2016

Partner interview: Mobile World Live spoke with Huawei’s Trevor Cheung (pictured), VP of its strategy and architecture practice, who outlined the company’s blueprint for helping operators re-architect their operations and create a more agile ICT infrastructure to make it easier to launch digital services with partners.

MWL: When operators refer to ‘digital businesses’, what specific services are they focusing on in the early stages?
Trevor Cheung: There are massive opportunities for operators in the digital era. The hottest emerging digital businesses the operators are talking about include video, cloud services, Internet of Things (IoT), big data and analytics, as well as security. Within the cloud services area, there are many different opportunities covering everything from infrastructure as a service (IaaS) to platform as a service (PaaS).

Network, customers, security and branding are operators’ core assets, and digital services cannot run without the network. Operators can provide simple service portfolios like messaging, voice and data, but they cannot satisfy end-users’ requirements for real-time, on-demand, all-online, DIY and social – or what Huawei calls ROADS. To address these, operators have to transform their operation model as well as their ICT infrastructure. This transformation is driven top down. If the operation can be more agile, the network capabilities can be open and flexible, time-to-market will be reduced, which will greatly inspire innovation in digital business and vertical industries.

There is massive data in BSS/OSS systems, and monetising this data is another blue ocean opportunity.

Mobile operators have been talking about ‘digital transformation’ for a few years, what have been the key obstacles slowing their push?
TC: Top of the list is mindset and operation model. Network operators must adopt a comprehensive customer experience mindset if they are to remain successful. Right now, there is still a large gap between the experience delivered by network operators and that of the leading internet companies.

For example, in China, operators offer 100Mb/s 4G service, yet users still have to go to the customer service centre in person and generally queue for at least half an hour to upgrade their plan. Operators must expand their experience focus from networks to end-users and services, as experience becomes the driving force for new business growth. Operators should transform from network centric to customer experience centric.

In addition, internal IT systems (OSS/BSS) cannot compete with the internet players’, so they need to move to a cloud-based architecture that is agile, dynamic and automated. Specifically, ICT infrastructure needs to exploit software-defined, virtualised, cloud datacenter and ultra broadband capabilities to provide real-time, flexible and elastic ICT resources for services.

Trevor1Finally, organisation capabilities need to adapt. The skills operators have today are not the skills that are needed to move on to the next phase. They need to train people and introduce new processes and skills. This applies to both engineering and business teams.

As a partner with operators around the world, what services are showing most potential?
TC: Some innovators have made good progress in launching cloud services for video and IoT, which have tremendous potential for gaining market share. Big data and analytics also have great potential but will take more time to mature.

Leading operators like NTT Docomo, Deutsche Telekom, Orange and China Telecom have done well in cloud services with high growth rates and rising revenue.

Video will become the next generation’s voice. There are a number of video services that have not yet been popularly adopted like 2K/4K video, video conferencing, telemedicine, distance education and home monitoring. HDTV or 4K video, in particular, can greatly increase mobile data consumption and increase ARPU as experienced by LG Uplus in South Korea.

The specific opportunities of IoT are only just emerging. We foresee a massive increase in data consumption to support smart health, smart homes and smart cities. We believe network operators will play a pivotal role in all these ecosystems.

Can you give an example of what is working and why?
TC: Digital services like video can increase revenues not only for the video content itself, but also from the increased consumption of network data. For example, LG Uplus developed its own mobile video portal to provide mobile video services. This is not just a simple streaming service, but also offers rich content with innovative features such as time-shift functions and multi-channel capability.

By exploiting its high-quality LTE network, big data capability, cloud services and intelligence technology, LG Uplus is providing and recommending customised, value-added services, including e-education, e-shopping, restaurant guides, as well as dietary and e-health information. The operator aims to differentiate every interface and service for each customer, and as a result is seeing a big increase in ARPU and revenue.

Another example is BT’s cooperation with Netflix over the past couple of years, which has driven similar increases in broadband adoption and data consumption.

Will these new services adequately make up for operators’ loss of revenue in their traditional voice and messaging businesses?
TC: Yes. Operators have many opportunities to generate additional revenue.

The average data usage in South Korea is 10GB, but only 500MB in Europe. Operators in Europe need to promote the development of new services like 2K/4K video, which can boost data consumption.

In addition, there will be 50 billion connections in 2020. The more connections there are, more data is consumed.

Operators also have the opportunity to create new revenue streams from non-traditional sources. In particular, monetising the rich consumer data that operators hold can easily make up for the loss in traditional revenue if handled correctly.

In your experience, what are the vital ingredients to success in the post-voice era?
TC: A paradigm shift needs to occur as user expectations have changed. People are going to demand the ROADS experience. To deliver this, network operators need to transform from network centric to a customer-centric operating model.

Operators need to re-architect their ICT infrastructure to make it more open and flexible by using technologies like cloud computing and NFV/SDN. To enable this, competencies and skills will need to be enhanced.

There’s been a lot of talk about CEM, why is that so important?
TC: In my opinion, three key capabilities are essential for digital transformation: CEM (customer experience management), re-architecting ICT infrastructure and operations, and support for an open ecosystem for service creation and delivery.

Experience has become the key driver for retaining users and increasing the user lifetime value. In future, from the end-user’s point of view, there will be no difference between the services provided by operators and internet companies. However, unless the operators start to deliver a much better customer experience, they will not be able to compete with the great experience that many internet companies provide.

Given operators have been network-centric since the beginning, how is Huawei supporting their efforts to re-architect their operations?
TC: The transformation of operating models has not yet been clearly defined, and many questions remain unanswered, such as how the operating models will be architected and how the business capabilities must change. Further research and effort is needed from the entire industry to solve these problems, which is why Huawei is playing an increasingly active role in many industry organisations.

For example, we are working with the TM Forum to launch an Omni-channel Management Catalyst Project to create best practices in designing the “digital customer experience journey”. We are also co-leader of the Digital Business Strategy and Customer Experience Working Group at the Open Group, aiming to understand the experience requirements of different industries.

At the same time, we are building the Huawei Open ROADS Community, providing a hardware and software environment for testing and authenticating services. Based on this community of carriers, open source organisations, researchers and consumers, we are collaboratively exploring and sharing ideas and techniques for operations transformation. In an initial project, Huawei and SAP are applying Design Thinking to prototype the Telecom Digital Boardroom to address the many pain-points executives face with their business operations. In short, the Telecom Digital Boardroom will accelerate decision making via real-time information.

The new operating model will drive the re-architecture of OSS/BSS towards an enablement platform. Open, real-time, digitised interaction and self-healing are some of the key words to describe the new platform.

How important is the cloud in this transition?
TC: The cloud is the foundation for re-architecting the ICT infrastructure. All services will be implemented on cloud datacenters, with all data flows within the cloud. The cloud datacenter will be the centre and router of the network.

Telecom network and IT convergence based on the cloud architecture will support and drive virtualisation at all layers of service delivery. As internal IT (OSS/BSS) moves to the cloud, the operating model and infrastructure will be more responsive to the end-user experience requirement, while operation efficiency will be improved.

The datacenter is an increasingly important part of Huawei’s overall business strategy as we approach 2020. We have rich experience of datacenter integration, having delivered more than 660 DC projects, including 255 cloud datacenters, covering more than 800,000 square metres.

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