The Best Partner in. ICT Convergence. Daniel Zhou. CEO of Huawei Czech Technologies s.r.o.
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1 The Best Partner in ICT Convergence Daniel Zhou CEO of Huawei Czech Technologies s.r.o.
2 1 2 3 Performance in 2013 Industry Insight Strategy and Actions Page 2
3 Huawei was founded in Shenzhen, China s Special Economic Zone Founded by Ren Zhengfei and other investors with an investment of US$3,500, as a private company Developed analog switches with 48 ports Developed C&C08 digital switches Engaging global top consulting firms for management transformations Established its first international R&D center in Bangalore, India Made significant progress in developing countries, e.g., Uzbekistan Revenue from Asia Pacific, the Americas, and EMEA exceeded domestic market for the first time. Shenzhen in the early 1980s Shenzhen after three decades Deployed the world's first LTE network in Northern Europe. Transformed from CT to an ICT company and established three BGs: Carrier BG, Enterprise BG, and Consumer BG. Page 3
4 Today, Huawei is a leading ICT company Who is Huawei Employees A leading global ICT solutions provider 150,000+ employees worldwide A Fortune 70,000+ engaged in R&D Global 500 company, ranking 285 in 2014 Market Progress US$39.5B revenue in 2013, US$21.9B revenue in 2014H1 Serving 45 of the world's top 50 carriers, which account for 77% of Huawei's revenue generated from the carrier network business Serving Business Areas Carrier Enterprise Consumer 1/3 of the world's population Page 4
5 Industry Contribution ICT & Vertical Industry 3GPP: 9 Chairman or vice Chairman one M2M IETF: 10+ Chairman or vice Chairman ITU-T: 3 Chairman or vice Chairman, Mobile Fixed BSS/OSS/CEM Services&Terminal TMF: BoD member, 2 Chairman NfV 185 Executives in 170+ Standard Organizations & Open Source, 11 Report executive Offered 5,000+ proposals in 2013 Accumulated 36,511 patents authorized till end of core patents in LTE/LTE-A as the leading vendor Page 5
6 Globalized resource deployment and localized business operations Netherlands Toronto Germany Ottawa Hungary Romania Silicon Valley China Bahrain Mexico India UAE Malaysia Huawei Headquarters Accounting shared service center Brazil Bidding center Mauritius Supply center & Hub R&D center Training center Argentina Technical support center Operations in 170+ countries; 150,000+ employees comprised of 150+ nationalities worldwide ; 30,000+ non-chinese employees with 70%+ localization rate. Huawei's global value chain allows fluid capability transfer across the globe, develops and retains talent in local countries, and creates jobs and economic opportunities. Page 6
7 Huawei Europe: Continued Local Commitment Revenue: $ 5.23 B in 2014H1 Procurement amount: $ 3.4 B in ,700+ Employees, 850+ in R&D 2 Regional headquarters: Warsaw & Dusseldorf 43 legal entities for proximity to customers 17 R&D Sites 2 Regional Technical Assistance Centers (24x7) 8 Training Centers Huawei Sweden Huawei Poland Huawei Italy 6 Local Network Operation Centers 2 Logistic Centers 2 Outsourcing Factories Huawei Romania Huawei Germany Huawei France Huawei UK 1 Spare Parts Center 166 Spare Parts Factories; 26 Logistic warehouse Page 7
8 Huawei Czech: One trustable partner 347 Czech employees 122M USD Revenue in M USD Revenue in 2014 as forecast Page 8
9 Strategic Vision: Maintain Leadership and The Best Partner A trustworthy problem solver er Le a d in Ma yer a l P F Custo mers A consultant for future development er w o oll y str u Ind An approachable leader driving the industry forward Operational excellence and sustainable growth Page 9
10 1 2 3 Performance in 2013 Industry Insight Strategy and Actions Page 10
11 Digital society drives the rapid increase of users and highspeed development of applications, traffic, and broadband Internet consumption continues to grow. 2 More Internet users 3.2 More time on the Internet 4 More ICT applications 2012 Source: Informa, IDC, Gartner, SA, OVUM, Huawei MI More data and services are generated. 20 More data 10 More cloud services 6.7 More Internet traffic Driving the development of the information super highway. 4 More broadband connections 10 Faster broadband speed 5 More smart devices 2022 Page 11
12 Digitization accelerates economic growth and facilitates job creation Digitization s impact on GDP and jobs, 2011 despite the unfavorable global Regional impact Region Africa Commonwealth of Independent States East Asia and the Pacific Eastern Europe Latin America and the Caribbean Middle East and North Africa North America South Asia Western Europe GDP impact (US$ billions) Total Source: The Global Information Technology Report 2013 by WEF Econometric analysis estimates that, Number of jobs created 618, ,820 2,370, , , , ,650 1,117, ,578 6,002,266 economic climate, digitization provided a US$193 billion boost to world economic output and created 6 million jobs globally in Digitization has emerged as a key driver and enabler of socioeconomic benefits. Digitization creates jobs, with a 10 point increase in the digitization score leading to a 1.02 percent drop in the unemployment rate. Page 12
13 ICT Value Shifting to Content & Application Telecom Service Telecom Service New ICT Key operator competition concerns: New ICT Content/ Content/ Internet service Internet service S/W &IT Service S/W &IT Service Infra H/W Infra H/W Device Device Component Component Source: IDC, Gartner, Bain, Huawei 1. Ubiquitous network with the best experience 2. Integrated rich contents & applications 3. Agile and efficient business operations Page 13
14 Various Carrier Business Models, Differentiated by User Asset + Network Asset End user User Asset Via Terminals Content & Application Legacy core service Service platform Network Infrastructure Legacy core service Network Asset Access - Access + OTT Play Telco Service: Voice Data, Network: Core-centric DC-centric Telco operation: Network Asset Network Asset + User Asset OTTs have DC and User Resources, the boundary with carriers is becoming blurred Page 14
15 PIPE is Fundamental for Business Transformation app app app app Big Data Analytics Bandwidth Cloud Operating System IT architecture based on cloud computing and big data Architecture Bandwidth and architecture driving Device: Smarter + Everywhere network development Device-Network-Cloud synergy creates context-aware user experience Page 15
16 1 2 3 Performance in 2013 Industry Insight Strategy and Actions Page 16
17 Focusing on the pipe strategy to lead in the digital era Digital society Big data and big traffic Information storage and processing Cloud data center Information transmission Network infrastructure Information presentation Network devices Enterprise business: steady growth Become a major ICT infrastructure provider that supports digital restructuring for enterprise customers Carrier business: Maintain leadership Become the best strategic partner for carriers and the industry leader Consumer business: build brand Become a world-leading smart device brand trusted by consumers Page 17
18 Maintain the leadership position in core technologies Mobile Broadband LTE: Deployed 110 commercial networks in more than 100 capital cities and 9 financial centers 466 key LTE patents No.1 position globally 5G: Set up 5G innovation and research centers in 9 countries Take the lead in researching air interface links for 5G networks in Europe's METIS project Plan to invest US$600 million over the next 5 years Anticipate commercial deployment of 5G networks in Enterprise business Fixed Broadband Launched the 400G core router 1 year ahead of industry peers The only one of its kind deployed on a large scale Deployed by 53 customers as of Dec World-leading performance and reliability: consumes 1/8 of the power, occupies 1/6 of the area, and weighs 1/12 compared with products with the same capacity in the industry The first in the industry to launch the 1T router line card. Launched the world's first serviceand user-experience-centered agile network architecture and the world's first agile switch. Smartphones Shipped 52 million units in 2013, up 62% YOY Ranked No. 3 after Samsung and Apple Page 18
19 Continuously make future-oriented investment to build future-oriented technological advantages 5G mobile communications Information generation Mirrorsys High-throughput computing Information transmission All-optical network Information processing and storage Content-aware network MirrorSys Offer next-generation fully immersive user experience 5G mobile communications: Conduct research on 5G to continuously enhance wireless network capacity and application scenarios All-optical network: Break the bottlenecks of transport networks and build limitless transport capacity Content-aware network: Build the next-generation content-aware and content-based-routing switching network High-throughput computing: Build a high-throughput computing platform for big data processing and analysis Page 19
20 Investment on 5G Beyond X US$600 million by 2018 Capacity Required 100 Billion Things Connected 10Gbps Peak Throughput 0 Ultra-NodeTM Waiting Establishment of 5G Innovation Center (5GIC) in UK Collaboration with 20+ universities and Research institutes Worldwide Page 20
21 Long-term investment in innovation Continue to invest over 10% of revenue into R&D, which enhances our competitiveness while propelling the industry and advancing technologies. Total R&D investment in the past decade amounted to US$24.9 billion ( CNY151 billion). $5.1B $4.9B No. 1 Chinese company with the largest number of patents in China; one of the $3.9B Top 50 patent holders in the US; one of the Top 15 patent holders in Europe. $2.9B $2.3B $0.6B Distributed basestation $0.7B SingleFAN $1.1B All-IP network $1.4B SingleRAN $1.8B Cloud computing Optical Transport Network Single 400G DWDM Softcom strategy G, agile switch Billion US$ Page 21
22 Huawei's goal : connectivity and broadband inclusion for all Help develop local ICT talent Trained nearly 10,000 ICT students Help countries and regions join the digital community Worked with 23 countries to implement projects Facilitate ICT knowledge transfer Worked with over 70 universities and Set up local ICT training centers or labs Established 45 ICT training centers training institutes worldwide Page 22
23 THANK YOU Copyright 2014 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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