Huawei’s Statement of Intent

Paving the Way for Ultra-Broadband Networks

I recently attended Huawei’s Ultra-Broadband Forum in Frankfurt, which attracted more than 600 delegates. The event was focussed on three areas: broadband network development, the video industry and business innovation in the cloud era.

I was impressed with Huawei’s vision for the future and its bold plans to be a leading force in delivering video services over fibre broadband networks. Eric Xu, the company’s deputy chairman of the board and rotating CEO, articulated Huawei’s strategy. The company wants to become an end-to-end provider of video services to operators. To achieve this, it aims to focus on business analysis and development, content acquisition, platform acquisition, network construction and terminal products.

Each of these areas has caused numerous challenges to operators. Huawei believes that by removing the complexities, it will allow operators to generate revenue using their network assets for video content. For example, Huawei plans to increase investment in chips for set-top boxes and to open up middleware in these boxes. The company believes that video is the next voice and a gold mine in the era of high-speed, high-capacity broadband.

There are numerous providers that claim to offer end-to-end services. In reality, it’s rare to find one that not only offers these services, but more importantly, delivers them well. It’s hard to bring all of these elements together, particularly content aggregation given licensing complexities and the way rights are sold by territory.

Undoubtedly, video represents the next battleground for operators and solution providers alike. We only need to consider the huge investments made by AT&T, BT, Telefonica and others. Huawei’s rivals, such as Cisco and Ericsson, have made significant moves in video through acquisitions as well as partnerships. Some solution providers are struggling to grow organically owing to the cutthroat nature of the market.

With this in mind, it was remarkable to see so many presentations from Hauwei’s clients, including Deutsche Telekom, DigiCell, KPN, Orange, Telecom Italia and many more. Their presence is clearly a strong endorsement of Huawei’s capabilities in broadband and video services, and rival suppliers struggling to achieve the same level of credibility with operators are sure to have been envious of such support.

Networks need to adapt in order to deliver video and other services that require high bandwidth. Huawei is strongly promoting a “gigabit society,” which is a vision that many regulators share. The cloud will act as an important enabler for supporting these services across screens — something that CCS Insight has advocated for some time. Why should operators continue to support costly hardware with a set-top box when the likes of Netflix are offering video to about 90 million subscribers globally? In addition, there are offerings like Magine that offer true multiscreen services. With a growing number of network techniques such as software-defined networks and virtualisation, operators should be able to offer video or evolve their offerings more quickly.

It was also great to see plenty of initiatives on 4K, 8K, augmented and virtual reality, as well as the Internet of things — solutions that will drive traffic and will need gigabit connections. But I was disappointed in the lack of games coverage. I believe that games also drive connections, traffic and potentially revenue. Indeed, some operators are starting to show a renewed interest in this area given the early successes of Apple TV and Fire TV. And now Netgem has strengthened its capabilities in games too (see Hotline: IBC 2016 Reveals Broadcast Industry Is Embracing Change).

On the face of it, Huawei’s end-to-end video strategy is extremely bold and the proof will be in its delivery, which is where others have failed. One area that was not mentioned at the event is the delivery of video services to a slew of connected devices. App development will be crucial given changing consumer behaviour toward watching video on mobile devices. Huawei might be stretching itself quite broadly given other areas of focus in mobile, fixed-line and other services. Although its strategy seems clear, the company didn’t share details of how it will deliver.

I believe there’s an opportunity for Huawei given its existing relationships with operators, which need to be better prepared in video and cloud services. I’m also confident that the future of delivering video is all about IP connectivity. But operators and their suppliers will have to manage end-to-end platform experiences to prevent video traffic taking a wrecking ball to networks.