Jay Chen, chief executive officer, Huawei India
Huawei, in its 16 years of operations in India, has emerged as a leading network and technology vendor in the country. During this period, the company has undertaken network upgradation and modernisation for key operators in the Indian telecom space as well as introduced new technologies in the information and communications technology (ICT) domain. The company is upbeat about the opportunities emerging from government initiatives such as Digital India, Smart Cities and Make in India, and looks forward to leveraging its global experience to make a substantial contribution to these projects. As a leading global ICT solutions provider with a revenue of $ 60.08 billion, Huawei operates in more than 170 countries and regions with 170,000 employees worldwide; serving one-third of the world’s population. Jay Chen, chief executive officer, Huawei India, shares his views on the company’s commitment to the Indian market, the key growth drivers, technology trends and emerging opportunities. Excerpts…
What are the current telecom technology trends in India?
India as a market is unique in its own way. With the increase in the 3G and 4G subscriber base, smartphone usage and internet penetration and the proliferation of digital devices, consumers’ appetite for content is growing manyfold and they are gradually becoming device-agnostic. With the rise in demand for various applications, such as video- on-demand, TV and user-created applications, content is increasingly becoming a key element. Service providers – both telecom and media players – are realising the significance of content and bundling it with delivery infrastructure to provide bundled triple-play or quad-play services.
The government’s much-applauded Digital India and Smart Cities initiatives entail the development of safe and smart cities and the launch of 5G, which will, in turn, encourage the adoption of internet of things.
Cloud computing is a remarkable innovation in the digital landscape, which has changed the way IT solutions are delivered and how end-users put them to use. The cloud computing space is growing and will continue to do so. It will
constitute the bulk of IT spending by 2017-18, which is great as cloud technology enhances mobility, security and connectivity, working as a catalyst towards a better, connected India.
Digitisation, apart from giving rise to cloud technologies, has paved the way for e-commerce. As per industry reports, in 2014, 41 per cent of Indians who purchased items online used mobile phones to do so, higher than in any other country in the world. Moreover, India is one of the biggest markets for e-commerce mobile apps, with 31 times more people using shopping applications on a daily basis as compared to Brazil, another leading e-commerce magnet. Another trend we are seeing amongst Indian millennials is the adoption of wallet apps. These wallet apps are tied to a user’s credit/debit card or bank account and allow the user to make purchases electronically.
What types of solutions are being deployed by operators to address network capacity and coverage issues?
Mobile phone operators in India still face multiple challenges including the lowest spectrum holdings in the world, which are also fragmented. As per industry reports, apart from being non-continuous, spectrum is divided among 7-13 operators in a circle. Moreover, while the cost of bandwidth in the country is almost the same as that for global operators, the ARPU is much less as data and voice tariffs are far lower, thus hurting the rate of returns on investments. These factors could leave the industry struggling to invest more in broadband network roll-outs, thus hindering the Digital India initiative.
Huawei understands the importance of sustainable development and has always pushed for the promotion of energy efficiency and sustainable cost reduction in the ICT industry. As an ICT leader, the company has pioneered Lean GSM technology, which is the gateway to affordable mobile broadband. Lean GSM will enable operators to maximise spectral efficiency, and help them transform their network to deliver broadband services and promote inclusive growth in rural and semi-urban India. A joint solution of Lean GSM and narrowband long term evolution (LTE) will be a breakthrough technology for limited spectrum, which will meet the requirements of most Indian operators. Apart from improving efficiency, it will result in capex and opex savings for operators.
Another challenge in the development of high speed broadband networks is the lack of a robust and high capacity backhaul network. For this, Huawei, in association with leading operators, has pioneered the roll-out of key technologies such as 400G routers and 100G DWDM. Moreover, to leverage the existing copper infrastructure, Huawei has developed many innovative and customised solutions by using G.fast technology, which is capable of gigabit access speeds over the existing copper lines. These can help operators in India overcome the challenges, thereby creating a successful business case for operators having copper networks, and providing an efficient solution to enhance network capacity and speeds for current consumer demands.
What are some of the recent contracts secured by Huawei in India? What business opportunities are you expecting from the Indian market?
Huawei as a global ICT player is committed to the Indian market. In fact, it was the first Chinese company to realise the potential offered by the Indian market and invested in the country by establishing a research and development (R&D) centre way back in 1999, which was the largest R&D centre outside China.
To leverage the increasing demand for data and other internet-based services, Telenor, in partnership with Huawei, started modernising its entire network to make it future ready. With this newly upgraded network, the company will be able to launch new technologies or services to enable the digital lifestyle of its customers. We are also working with leading telecom players like Bharti Airtel, Idea Cellular and Vodafone India to drive the next wave of growth in the Indian telecom market.
What has been the company’s strategy for the smartphone market? What targets has it set for itself for the next few years?
We believe that the consumer market, in particular for smartphones, has huge growth potential in the mobile internet era. In recent years, we have witnessed rapid growth in the consumer space owing to our long-term R&D investment and continuous technological innovations. Huawei is the world’s third largest smartphone manufacturer and our purpose is to serve the market, and work with operators and enterprises to enable their networks for a better connected world. We are, therefore, working towards creating a suitably enabled ICT ecosystem for a better connected tomorrow. Our larger vision is to connect communities by way of technological advancements.
Over the past 15 months, Honor, Huawei’s smartphone e-brand, has strived to meet the demands of Indian customers through products based on localised research and product development. With its two new products, Honor is optimistic about meeting the needs of Indian customers. Globally, Honor saw a growth of over 2x, closing $6 billion in sales value in 2015 as compared to $2.4 billion in 2014.
What are your views on the Make in India initiative? What are the manufacturing challenges that remain unaddressed in India?
We are quite excited about government initiatives such as Digital India, Smart Cities and Make in India. With its global experience, Huawei can make a substantial contribution towards enabling this vision. The company will work with its partners in India to undertake new technology implementation, leveraging industry development opportunities to fully unleash the ICT potential in the country.
“Huawei will work with its partners in India to undertake new technology implementations, leveraging industry development opportunities to fully unleash the ICT potential in the country.”
What are Huawei’s future plans for the Indian market?
Huawei has been in India for 16 years and, after China, Huawei India has the most localised facilities and a pan-Indian presence, with 14 circle offices, an R&D centre, the Innovation Solution and Demo Center, global network operations centres, a manufacturing unit in Chennai, two customer experience centres and service centres across India. The Indian market provides a lot of opportunities for all business groups – carrier, enterprise and consumer. We have invested more than $150-170 million in our R&D centre in Bengaluru, which currently has an employee base of 3,000 and can be furthure expanded to 5,000.
In line with our commitment to the Indian market, we will put greater focus on innovations and latest technological solutions. To fulfil regional requirements, we are fully geared up with relevant technologies and solutions in the wireless and transmission domains, such as small cells, LTE-Advanced, Lean GSM, Carrier Aggregation and G.fast.
India is the fastest growing telecom market and has the second largest telecom network in the world, demanding optimised mobile data, better connectivity and improved smartphone performance. There is a huge potential for anyone who is ready with smart solutions and technologies. As per industry reports, the internet population in India will reach an estimated half a billion by 2018. This will be made possible through network transformation in both the wireless and wireline domains. The end-to-end network needs to be augmented to support this kind of broadband and internet penetration growth. It will be one of our key focus areas in the coming years.
