Building a Better Connected Wo
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1 Building a Better Connected Wo Smart Caribbean Forum March 22, 2017
2 ICT Is Pivotal to National Competitiveness ICT strategies of developed countries and regions Developing countries implement ICT strategies Europe Horizon 2020 Singapore Smart Nation Australia National Broadband Network National broadband strategies of Malaysia and Thailand ICT strategy of Cameroon and Rwanda Digital Agenda of Mexico Digital Agenda of Chile National information society plan of Argentina Computers for All program of Brazil ICT has become a core national competency. Developed countries are pushing ICT advancements further, such as Singapore's Smart Nation plan and Germany's Industry 4.0. Developing countries are stepping up efforts to implement their ICT strategies, including those for national broadband, e-government, and e-education. For each GCI* percentage point increase the GDP per capita increases 1.4~1.9 percent. Productivity will increase 15 ~ 25%, Connectivity will reach to 100Bn in 2025 GCI: Huawei Global Connectivity Index HUAWEI TECHNOLOGIES CO., LTD. Page 2
3 ICT Enables the Fourth Industrial Revolution Intelligentization App App App 5G Cloud IoT Big Data Everything is connected Mechanization Electrification Automation Everything is intelligent Following mechanization, electrification, and automation, we have reached the doorstep of the fourth industrial revolution Intelligentization. Intelligence is embedded into everything including business processes. ICT technologies such as mobility, Cloud, Big Data, and IoT form the foundation of intelligentization. HUAWEI TECHNOLOGIES CO., LTD. Page 3
4 New ICT Era Is Approaching ICT Stage I ICT Stage II ICT Stage III Office Automation New Business Processes Core Part of Production Systems
5 Enter into the Shift Age Everything is Digital Solve Problems with Internet Mindset Traffic Jam VS. Sharing economy Internet + ++ Internet Boundless Global Village A World with borders and limited resources Online Digital World Virtual World Offline Physical World Real World Improve Efficiency 2 hours or half day? Save Cost IT Cost: Big bank: RMB20-30 Mid-&-Small: RMB100 VS. VS. 60 seconds IT Cost: RMB 1 Global 500: Revenue Growth: 0.46%, EBITDA Growth: -14.7% HUAWEI TECHNOLOGIES CO., LTD. Page 5
6 Platform Layer Application layer New Ecosystem for Digitalization Transform Carrier Partners Enterprise User Consumer (Administrator) ROADS = Real-Time, On-Demand, All Online, DIY, Social O&M Tool Business Integration and End-End Process Enterprise-oriented Products E2E service orchestration engine Basic Capability service layer Big Data Suite Collaborative Innovation Consumer-oriented Products Open API Business Agility Enterprise User (Employee) Application and Services Third-party Services Self-operated Services Digital Control Rules Loop 4 Main Streams Offline: Goods Stream Online: Money Stream Online: Data Stream ICT Infrastructure (Network + DC Infrastructure) 1 Online: User Stream
7 Digital Society Model Development To access entertainment Video To access information News To access utilities Gov t services To engage in business e-commerce 4 Content Diversification Stage Music Jobs Health Banking 3 Monetization Stage Gaming. Sports. Education. On-Line Services. 2 Network Effect Stage To facilitate sharing platforms 1 Content foundation Stage To facilitate communications Digital Content and Services Ecosystem Digital Ecosystem Maturity HUAWEI TECHNOLOGIES CO., LTD. Page 7
8 Synergy of Three Factors Drives ICT Development Demand Voice, SNS, Web, Picture, Video City Safety, Education, Health, Media Electricity, Oil&Gas Broadband Download Speed Local Content Statistics Access Statistics of International Export. Decrease Experience Price Supply ICT investment/gdp Infrastructure Regulation and Policy Promote. HUAWEI TECHNOLOGIES CO., LTD. Page 8
9 Global Average Cloud % of ICT budgets 0.7% 1 Industry Transformation ecommerce per GDP 11.8% App downloads per capita(number) 8 2 Service Innovation Demand Fix broadband density (Subscription per 100 inhabitants) Affordable & Digital Literacy Mobile broadband density (Subscription per 100 inhabitants) 37.2 Source: Huawei GCI 2015, ITU-T(2015) Demand has gradually become the main driving force of ICT development, especially for the construction of data center, cloud and application HUAWEI TECHNOLOGIES CO., LTD. Page 9
10 Encourage Vertical Industry to Digital Transformation egov: 400 government e-services (98%) Cloud Service Provider Spending / GDP IoT Spending per Capita Datacenter Spending per Capita Healthcare: 36 telehealth centers Singapore 0.02% Singapore 544 Singapore 78.1 Education: 100% schools covered, 50 applications Global 0.01% Global 156 Global 15.4 SMEs: 5,000+ SMEs use isprint Source: Huawei GCI2015 Finance: Nationwide NFC payment, 30,000+ payment points Ease of Doing Business, 1st for 7 consecutive years ( ) HUAWEI TECHNOLOGIES CO., LTD. Page 10 The World Bank and International Finance Corporation
11 Drive Service Innovation by Cloud&Big Data Contact group Internal friends: 12 External friends: 8 Contacts: 65 APP App preference: finance, video Favorite apps: Zaker, Facebook, Warning Deregistration rate warnings: 8 Complaints: 6 KOI: warning Basic features Gender: male Age: 38 Occupation: unknown Terminal: smartphone (iphone5) Time features Time preference: 10:00, 16:00 Weekend preference: none Location features Traveling: yes Location: city Activity city: Guangzhou, Hongkong Telecom features Remaining contract validity period: 8 months ARPU: 58 yuan Traffic: 533 MB Comprehensive value: level 4 Operation Efficiency Public Service Innovation Business Innovation HUAWEI 11 TECHNOLOGIES CO., LTD. Page 11
12 Incentive Policies Enable Affordability and Digital Literacy Affordability & Digital Literacy -MYR3,000 sales tax exemption on purchases of computers every year Training for government officials, teachers, soldiers, students, and prisoners community broadband service centers in the country -MYR500/year tax exemption when buying MYR68/month broadband services from 2010~2012 User Tax Skills Training - Electronic counters in 105 aboriginal neighborhoods Internet Community Source: National Broadband initiatives in Malaysia, 2010 HUAWEI TECHNOLOGIES CO., LTD. Page 12
13 Experience Improves in Three Ways Global Average Average FBB internet speed(mbps) Speed Average MBB internet speed(mbps) Rich Content Experience Customer service rating Localization Source: TeleGeography (2015) User experience depends on the speed and content HUAWEI TECHNOLOGIES CO., LTD. Page 13
14 Technology Evolution Enables Gbps Experience 4.5G Gbps LTE-A 300Mbps VS 2G Kbps 3G Mbps LTE 150Mbps HUAWEI TECHNOLOGIES CO., LTD. Page 14 Copper VDSL-100M Supervector-300M G.fast-1G Cable DOCSIS M DOCSIS3.1-4G Fiber GPON, 10GPON
15 Expand Supply by Government Collaboration and Increase Investment Global Average 1 Investment: public interest, ROI ICT Spending per GDP 3.3% 2 Fiber: ROW, sharing Fiber to the Home (FTTH) penetration % 13 3 Spectrum: Cost, Planning Supply 3G Coverage (population %) 82 4 Site: Collaboration, sharing Source: Huawei GCI 2015 Broadband has become a basic right and need. Increasing investment in infrastructure will effectively promote the ICT development index. HUAWEI TECHNOLOGIES CO., LTD. Page 15
16 Promote National Broadband by Government Funding Standards and Regulations Collaboration Government Malaysia: Government subsidy Cameroon: Commercial loan China: Department of Housing published mandatory regulations on FTTH access for new buildings US: "Dig Once", one trenching within a certain time Kenya: shared infrastructure, government tax subsidies Sweden: allowing electricity, gas and other utility companies to build fiber networks for rent HUAWEI TECHNOLOGIES CO., LTD. Page 16
17 Five Technologies Facilitate ICT Development Potential 1 Broadband 2 Data Center 3 4 Big Data 5 Internet of Things Cloud HUAWEI TECHNOLOGIES CO., LTD. Page 17
18 Accelerate National ICT Development Strategy Realization Nation Development Strategy Governance Economy People Environment Living Mobility Big Data Broadband ICT Infrastructure Cloud Computing National Data Center(Cyber Security) IOT Platform M2M Network Talent Regulation Technology Funding HUAWEI 18 TECHNOLOGIES CO., LTD. Page 18
19 Copyright 2016 Huawei Technologies Co., Ltd. All Rights Reserved. The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice.
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