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FOREWORD: The mobile industry’s digital transformation journey PG.02

FEATURE: Transforming Towards Digital Business PG.04

MARKET REPORT: Digital transformation: enabling new growth PG.06

MARKET REPORT: Operators seek to optimise network value to meet QoS demand PG.09

INTERVIEW: NTT DOCOMO PG.12

INTERVIEW: Telefonica Group PG.14

INTERVIEW: SUNRISE PG.16

INTERVIEW: TDC PG.18

INTERVIEW: HKT Limited PG.20

INTERVIEW: Orange PG.22

FEATURE:It takes an ecosystem - Open ROADS Community PG.24

FEATURE:Turning your business vision into deliverables PG.26

IN THIS ISSUE

ISSUE 1 | February 2017

TRANSFORMINGTOWARDS

FOREWORD: THE MOBILE INDUSTRY’S DIGITAL TRANSFORMATION JOURNEY | 0302 | FOREWORD: THE MOBILE INDUSTRY’S DIGITAL TRANSFORMATION JOURNEY

or remote ones, will vanish. Operators will play a key role inthis future, particularly in providing universal connectivity tothe billions of people that will come online in the coming years.

We need only look at the vast changes in the competitivelandscape of communications services over the last decade tosee the rapidity of these changes. Ten years ago, competitionwas based primarily on connectivity-centric product strategieswithin domestic markets with rigidly defined, high-margininterconnection regimes. The emergence of digital platformsand global internet players with large-scale user bases hasfundamentally changed the economics of the industry. Thus,collaboration among communications service industryparticipants is becoming essential.

While successful players will never entirely abandon theircompetitive instincts, collaborative strategies are growing inimportance, in such areas as identity and privacy—commongood areas where individual service providers cannotsufficiently differentiate their own service offerings. In anincreasingly connected world, consumers leave ever-largerdigital footprints, and ever more enterprises leverage thegrowing pools of data those footprints create. Operators arewell-positioned to become central trusted guardians of digitalidentity and personal data, to offer a ‘true choice’ to end-users,which will both enable innovative new services, while allowingconsumers to decide if and how their personal data is shared.

Collaboration in this space is already taking place: the “MobileConnect” carrier consortium is a global, federated solution formobile phone-based authentication, authorisation, identityand attribution services, which provides digital identities toemerging market consumers who lack access to formalidentification.

Advances in network technology (and, in particular, 5Gtechnology) provides carriers with the ability to truly provideuniversal coverage. These advances also allow them to rejigtheir business models to address new opportunities created

by the broader changes in the wider digital ecosystem.Beyond leveraging 5G to deliver enhanced mobile broadbandexperiences to customers, the changing nature of hownetwork technology is deployed and utilized will have threeprofound implications for carrier business models. Firstly,network topology may need to be rethought, to cater for newspectrum bands, and to densify networks through small cells,which will allow many more specialised and localized servicescarriers can provide to consumers, advertisers, and otherecosystem participants. Secondly, increased ‘softwarification’,virtualisation and local caching at the network core will makeit feasible for carriers to customise their networks faster, andmore efficiency serve numerous, newly-formed digitalcustomer segments. Thirdly, new enhanced mobile broadbandtechnology will allow carriers to target enterpriserequirements. While consumers have driven most of themobile industry’s revenue growth to date, the Fourth IndustrialRevolution mentioned above will drive enterprise demand fordigital services faster in the future.

As increasingly powerful networks enhance their servicedelivery capabilities, carriers will also start to focus more ondeveloping an enabling layer of platform services. This willensure that interoperability is built in by design, thatarchitectures and data models are designed to support globalecosystems, and that technical and commercial friction isreduced. Competition will therefore move up the stack to thedigital service layer, and each operator will support acomprehensive ecosystems on their respective ‘Life Platform’in a fully digitized, ubiquitously-connected world.

Digital ecosystems will be radically different over the nextdecade—and I believe that the role of carriers will become evenmore important as a result. All of us in the industry mustcontinue to embrace both our cooperative and competitiveinstincts simultaneously. Evolution waits for nobody: we mustbe bold enough to seize new opportunities, and flexibleenough to change frequently. This is at the heart oftransforming towards digital business.

The mobile industry is on an exciting journey: it istransforming towards digital business. Fast and fluidshifts in our digital ecosystem are constant factors inour industry, but the market megatrends we see todaypoint to radical change of a different scale andmagnitude. There are several trends that I see as havingthe greatest impact on this future digital world. Theseinclude the rise of the fourth industrial revolution, theshift to all-digital services, and the abundance andubiquity of new technologies which serve both asenablers and disruptors. Each of these trends willunderpin a rapid transformation of both markets andsociety over the next decade—and collectively, they willallow mobile service carriers to be key beneficiaries ofthat transformation.

All industries are undergoing a rapid conversion of theirtraditional operational processes to automated and digitizedones, a phenomenon often referred to as the Fourth IndustrialRevolution, and one that is particularly acute in thetelecommunications industry. New technologies, especiallyartificial intelligence, will continue to increase everyenterprise’s capacity to automate. This will not only profoundlyinfluence the nature of services and of industries, it will hastentheir interconnectivity: firms from across industry sectors willsoon see their processes intimately connected with oneanother, and supported by a seamless layer of automatedcapabilities that link them all.

One of the outputs of this process is the increasing digitizationof all services, far beyond the app stores of today. Over thenext decade, all daily consumer interactions, purchases andinformation requests are likely to be primarily—if notexclusively—digital. This continuous digital businesstransformation will in turn further drive down the marginalcosts of distributing digital products and services, and lead toan increasing abundance of digital products globally. It will alsofoster ubiquitous access to services, and the ‘digital divide’,between ‘haves’ in well-served markets and ‘have-nots’ in poor

Dr. Hyunmi Yang,

Chief Strategy Officer, GSMA and Advisory

Board Member, Open ROADS Community

THE MOBILEINDUSTRY’S DIGITALTRANSFORMATIONJOURNEY

FEATURE: TRANSFORMING TOWARDS DIGITAL BUSINESS | 0504 | FEATURE: TRANSFORMING TOWARDS DIGITAL BUSINESS

n On the operations transformation level, the complexity ofthe operations system has become the primary obstacle tomost operators. The ROI is uncertain, while it is alsofundamental for the transformation.

n At the infrastructure transformation level, operators are mostlyworried about alignment with line of business and step-by-stepevolution from legacy to mitigate the transformational risks.

We have been exploring the digital transformation approachto address these challenges. AWS was born due to Amazon'sinternal demands; Google applies artificial intelligence (AI)technologies to reduce the energy consumption of its internaldata centres. We find that the best practice of successfulInternet companies and leading operators is that newtechnologies are always incubated internally. Huawei has donethe same. The digital transformation starts from us. We firstlyadopt digital technologies to change ourselves in terms ofinternal IT, R&D, delivery, supply chain and many other sectors.We will gain more experience and then help operatorsultimately sustain business growth and improve operationalefficiency by digital technologies in the digital era.

LEVERAGE DIGITAL TECHNOLOGIES TO IMPROVEOPERATIONAL EFFICIENCY

Huawei's digital transformation has undergone four phases:standardization, centralization, platform-based, and Intelligence-based. Huawei is now between the phases of platform-based andintelligence (AI)-based, and will continue to increase investment inplatforms and big data analysis to reach the final stage. At present,Huawei has been reshaping our IT, delivery and supply chainthrough cloud-based technology. The consolidation of Huawei’sdatacenters and migration to Huawei’s internal cloud data centerincreased resource utilization from 20% to 80%. ISDP (IntegratedService Delivery Platform) has been applied to over 5,000 projectsworldwide; and the total number of sites has reached 2 million; byadopting OWS(Operation Web Services), 40% of the work flowshave been automated, and over 180 APPs have been developedby regional teams; order fulfillment cycle has improved by 50%.

After internal incubation and validation, these digital capabilitieswill be applied to our global businesses in order to help ourcustomers improve operational efficiency. We have chosen thefollowing areas to jointly innovate with global operators: Forcustomer care, based on big data analysis, we will identify activitiesthat can be migrated to digital channels, and gradually achievecustomer self-service. For marketing, we will migrate marketingactivities from offline to online APP channels. For network and IToutsourcing, we will use the Global Service Centers and OWS to

realize automated O&M. For central office reconstruction, throughnetwork planning, migration, and site decommissioning, we helpcustomers to reduce the numbers of central offices.

EMBRACE DIGITAL BUSINESS TO CONTINUESUSTAINABLE GROWTH

The other business goal is growth. Through system integration,we will help our customers build end-to-end (E2E) businesssolutions, to realize their strategic deliverables for achievingsustainable growth.

From this year, Huawei began to live broadcast our forumsglobally via the cloud platform, through a multi-channel multi-screen approach. By doing this, we have built up capabilitiesinternally, such as platform, E2E integration and assurance.Combined with the operators’ pain points of developing videobusiness, such as an unclear business model and high cost ofcontent acquisition, we will undertake the following initiatives tobuild an overall system integration solution for video service: buildthe content aggregation capability and cloud aggregation videoplatform, to help operators develop and operate video servicesefficiently; build video-based end-to-end network, to achieve thebest video service experience; build video service planning,design, integration and experience management capabilities.

CHIEF EXECUTIVES’ RESOLVE AND EXTERNALENABLERS ARE THE KEYS TO TRANSFORMATION

After 150 years of development, communication technologyhas evolved from the connection of people into the connectionof things. Digital business is attractive, but the transformationroad is long and arduous. There are two key actions needed toovercome these obstacles.

First, operators need the support of external enablers, bothfrom its strategic partner and the open ecosystem.

As a strategic partner, Huawei is committed to resolvingbusiness issues during the transformation, rather than onlyproviding products and solutions. Based on our Cloud OpenLabs, we will build multi-vendor network environments,provide multi-vendor pre-integration and verification, andbuild an ecosystem collaboration platform for opencooperation. For the organization, we have built an ITprofessional services team to better serve our customers. Ourindustry partners number 2,100 globally.

And we have been committed to building an open ecosystem.We initiated the Open ROADS Community, which is committedto exploring the transformational direction and research onuser behavior. With Linux Foundation, we co-sponsoredOPEN-O community which is committed to helping operatorsimprove business agility and deployment efficiency.

Second, and more important, a successful transformationhighly depends on the resolve of the board of directors andthe chief executive. Clear and consistent internal messagesfrom the leadership can drive the transformation through atop-down approach. Together with the whole ecosystem,operators must achieve ROADS experience-driventransformation, towards a digital business.

Today, over 50% of the traffic in the network pipeline isconsumed by video, which has become a fundamentalservice for operators. For some live e-sports games, thenumber of online viewers has reached tens of millions.AT&T’s acquisition of Time Warner shows its strategicfocus on transforming itself from a communicationsservice provider (CSP) into a media content provider.The better experience with 4K video and virtual reality(VR) is both a challenge and an opportunity foroperators’ networks. The new growth engines ofenterprise cloud and IoT also have a profound impacton an operator’s business.

From the end users’ point of view, there is no differencebetween the services provided by operators or Internetcompanies. However, the experience itself can vary. We believethat operators need to manage and enhance experiencethroughout the end-user lifecycle journey, to provide ROADSexperience: Real-time, On-demand, All-on-line, DIY, and Social.To realize the ROADS experience, operators must implementa digital transformation of their business.

UNCERTAINTY CITED AS BIGGEST CHALLENGE INOPERATORS’ TRANSFORMATION

To better help operators address the transformationalchallenges, Huawei, along with IDC, carried out a survey ondigital transformation, interviewing more than 50 operatorsglobally at various phases of transformation. Nearly 200people completed the survey, and 39% of them were finaldecision-makers. We found that the biggest challenge foroperators is uncertainty. The industry does not have de-factostandards or benchmarking practices. That’s why they hesitateand continue to observe developments.

n On the business level, most operators believe that dataanalysis, vertical industry platforms, and video are their topbusiness opportunities. We recognise this trend fromoperators’ frequent acquisitions in the film and televisionentertainment industry.

n On the organization and talent level, most of the operatorsthink that challenges mainly lie in internal skills, and businessprocesses that cross organization boundaries. This hasalready happened to some European operators as theiremployees have started early retirement plans.

TRANSFORMINGTOWARDS DIGITALBUSINESS

Jim Lu,

President of Global Technical Service Dept,

Huawei

“The best practice ofsuccessful Internetcompanies and leadingoperators is that new

technologies are alwaysincubated internally”

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CLAIMING NEW DIGITALTERRITORIES

By building digital ecosystems, operatorscan also play a central role in stimulatinginnovation and staking a firmer claim onnew digital territories. The risk of beingmarginalised is much less likely if they areinstrumental in bringing together the likesof application developers, devicemanufacturers, distributors and systemsintegrators.

AT&T has created six Foundry InnovationCentres, for example, in order tospecialise in different digital areas.Ranging from the IoT and the connectedcar to software-defined networks, thecentres allow AT&T’s innovators to workwith outside experts in developingconsumer and business solutions.

Telefonica’s global M2M partnershipprogramme, focused on the B2B market,has over 500 partners. QIVICON,Deutsche Telekom’s smart homeplatform, has more than 40 partnercompanies working on various productsand services. SK Telekom and AT&T alsohave smart-home digital hubs.

Certainly, telcos face a number ofchanges and challenges as theytransform themselves from traditionalcommunications service providers intodigital service providers.

Phil Jordan, global CIO at the TelefónicaGroup, does not under-estimate the

digital transformation challenge: “It is acomplete transformation of businessmodel, processes, policy, product design,systems and ultimately culture, skills andmindset. This is a scale transformationthat will define the future of telcos andthe whole industry.”

CONNECTED LIVING

The GSMA Connected Living programmeis an initiative to help operators add valueand accelerate the delivery of newconnected devices and services in themachine-to-machine (M2M) market. Thisis to be achieved by industrycollaboration, appropriate regulation,optimising networks as well asdeveloping key enablers to support thegrowth of M2M in the immediate futureand the IoT in the longer term.

Many mobile operators are alreadyfollowing strategies to help them exploitthe potential of connected living. NTTDoCoMo in Japan, for example, hasfocused on the “smart life” initiative toachieve sustainable growth in the face ofsevere competition from mobile networkoperators and MVNOs.

Kyoji Murakami, executive vice presidentand member of the board of directors atNTT DoCoMo, said the operator isproviding consumer services includingdigital content services, health andeducation, and financial services

“By combining and connecting assetssuch as DoCoMo’s service, technologyand customer base, and group/partnercompanies, we generate innovation andcollaboration, and provide the ever-improving value,” Murakami added.

Orange is adopting a similar approachbut with the added dimension of usingthis shift to take the fight to OTT players.

“Digital transformation means more toOrange than re-architecting its processesand IT infrastructure. We need tovigorously adopt this strategy in order tosurvive and become a best-in-classoperator,” said the company’s VP ofnetwork operation and performance,Roberto Kung, at the Huawei event.

“Our main competitors are not otheroperators, but OTT players. We must startusing their weapons in order to overcomethe threat these firms pose. They arecurrently more agile and have fullyadopted the use of big data, cloud-basedservices and open APIs,” said Kung.

Kung calls for operators to sharesolutions and processes, claiming thatthere are much bigger and moreaggressive competitors than each other.“We should look to be technologyagnostic and use a lifecycle policy ofdesign, execute, monitor andtroubleshoot. We must start to adoptopen APIs to become more agile so wecan introduce and launch newintegrated services.”

DIGITALTRANSFORMATION:ENABLING NEWGROWTH

MARKET REPORT

Mobile operators across the worldface the challenges of slowinggrowth and ongoing disruption ofcore services by new Internetplayers, even as the broader mobileecosystem continues to seesignificant revenue growth.

According to a June 2016 report fromGSMA Intelligence (GSMAi) and the ChinaAcademy of Information andCommunications Technology (CAICT)“Mobile operators: the digitaltransformation opportunity”, digitisationhas already disrupted the mobile industryand is now beginning to transform a rangeof other industries, including healthcare,finance and retail. This in turn is creatingopportunities for innovative new services,

with consumer engagement and datatraffic increasingly focused on mobiledevices and mobile networks.

Indeed, in its Global Mobile Trends reportfor 2016, GSMAi noted that five “mega-trends” emanating from the mobileecosystem are driving major changes thatwill see the world move from the currentage of digitisation to an age ofautomation and the connected life.

These trends are the geographic shift inmobile user growth; the increasing use ofmobile technology to access the Internet;the massive growth in connecteddevices; the platform economy; and theadoption of the “open” approach at thenetwork level.

The first two trends reflect the shift inuser growth from the developed world —where mobile markets are increasinglysaturated — to developing and emergingmarkets, while in the developing marketsit is often the case that a person’s firstexperience of the Internet is on a mobiledevice. The Internet of Things (IoT),meanwhile, is expected to drive theaverage number of connected devicesper person to three by 2020 compared to1.5 in 2015, “providing improved efficiencyand controlled automation in daily life”,according to the GSMAi.

The platform economy, meanwhile, usessmartphones, software and open APIs tocreate and scale new digitalmarketplaces for a huge range ofservices and products, from over-the-topmessaging apps through to a broadrange of consumer-focused sectorsreinventing how business is done throughdigital platforms, and major industrialsectors putting analytics and automationin the cloud.

According to GSMAi, mobile operatorsare increasingly opening up their APIs tothird-party developers. Around 15,000open APIs are available, with 40 new onescreated every week.

There has long been a debate about thetrade-off of scale versus value leakage byopening up a network or database tothird parties. GSMAi argues that the webexperience points firmly in favour of open.“Amazon, eBay, Netflix, Uber, Facebook,Google, Twilio and the fintech cohort areall testament to this,” the researchcompany said.

Underpinned by tech advancement

�Age of industrialisation

Age of digital transformation

Age of automation and the connected life

1970 1980 1990 2000 2010 2020 2030

Artificial intelligence

Analytics

Cloud

Smartphones and smart devices

Software

Computing power

Connectivity

Enablers

Horizontal in that they impact the process of transformation as opposed to specific sectors or industries

Five megatrends emanating from the mobile ecosystem are driving this change

Geographic shift in mobile user growth

The internet is mobile, and mobile is the internet

Connected device explosion

The platform economy: messaging was just the start

‘Open’ is now moving down to the network level

AI

a catalyst that will accelerate the pace of these trends

“This is a scaletransformation

that will definethe future oftelcos and

the wholeindustry.”- Phil Jordan, telefonica

by Mobile World Live

MARKET REPORT: OPERATORS SEEK TO OPTIMISE NETWORK VALUE TO MEET QOS DEMAND | 0908 | MARKET REPORT: DIGITAL TRANSFORMATION: ENABLING NEW GROWTH

“There is a sense of urgency withinOrange to undergo digital transformation,and we must take the opportunity tomove to a true on-demand businessmodel. We want to become an essentialpart of our customers’ lifestyle,” hecommented.

Evidence that operators are gearing up fora digital transformation comes from anOvum information and communicationstechnology (ICT) survey. This revealedmobile operators were prioritising ITprojects such as overhauling order-to-activation systems and customer self-service tools, and ensuring billing andcharging systems will be able to supportend-to-end (E2E) digital services.

The study by the UK-based research firmalso highlighted that the key worries foroperators centred on how they couldautomate and rapidly deploy the newdigital services. To help with thistransition Ovum maintains that manymobile operators are seeking expert helpand guidance from vendors andprofessional services firms. This outsideassistance, according to Ovum, is morethan just specific technologyimplementations but also on how best toimplement architectures and frameworksthat will adequately support dynamicmanagement, increased agility and rapidservices design and delivery.

TRANSFORM THE CORE

Web scale companies — the likes ofGoogle, Amazon, Rackspace, Netflix,Facebook and so on — have long enjoyedeconomies of scale and flexibility throughcloud technologies. They can adapt easilyto changing demand.

Forward-thinking telcos, desiring the sameservice agility and efficiencies as web scalecompanies, are also moving to the cloud.According to Accenture, growing the corebusiness in this way is a must-have basisfor any digital transformation journey.

A main reason why AT&T embarked in itsDomain 2.0 initiative, comprisingsoftware-defined networking (SDN) andnetwork functions virtualization (NFV),was because network traffic trends wereoutpacing the ability to keep up with itstraditional, hardware-centric networkmodel. Mobile data traffic, reported AT&T,grew more than 150,000% between 2007and 2015, and 60% of its total networktraffic is now video. Data traffic volumesare only expected to increase as the likesof the IoT, 4K video, and virtual andaugmented reality gain market traction.

Another driver for virtualisation is theempowerment of end-users. AT&T isdeveloping the ‘user-defined networkcloud’ where customers simply click on theservices they want and get themimmediately. Other operators, such asDeutsche Telekom, NTT DoCoMo, Orange,Softbank, and Telefonica are thinking alongsimilar lines. Improved time-to-revenue andgreater operational efficiencies, courtesy ofautomation, are clear attractions.

Greater economies of scale and bettercustomer service delivery are the driversbehind Pan-Net, Deutsche Telekom’sambitious network transformationproject. Using cloud technologies andvirtualisation, Deutsche Telekom aims tocreate a single all-IP Pan-Europeaninfrastructure. It will eventually serve all 13markets the group has a presence inthrough a central service catalogue. It willbe accessible by both mobile and fixed-line national operations.

“The Pan-Net will transform our way of[service] production away from local silostowards a cross-country integratedproduction model,” said Kerstin Günther,Co-Managing Director of DeutscheTelekom Pan-Net, a separate companyset up by the group to manage theproject. “Instead of producing anddeveloping services 13 times we focus ourlimited resources. Based on a cross-country product development process,we are able to deliver services to all ourEuropean national companies.”

Günther said Pan-Net has alreadylaunched eight services in four countriesover its European cloud infrastructure,including voice mail and messaging. Theeconomics look exciting. “We’ve migratedmore than 20 million customers to thePan-Net platform and proved a savingspotential of 50%,” he said. “Our goal formessaging, for example, is to migrate from33 platforms to one. In 2017 more serviceswill follow. In order to do so, we are scalingup our production while continuouslybuilding data centres across Europe.”

THINK LONG TERM

Telco transformation will not be easy orpainless. It will also take firm leadership –and shareholder patience – to weatherthe storm of heavy upfront investment fordigital gains that might not be realised inthe short- or even medium-term.

MARKET REPORT

In the fourth quarter of 2016, theglobal cellular market recorded annualgrowth in recurring service revenue of2.9% to US$219 billion, while datarevenue increased by 10.7% toUS$93.7 billion, according to a reportfrom GSMA Intelligence (GSMAi).

Capex, meanwhile, fell by 12.5% to US$51.1billion and EBITDA dropped 1.5% toUS$88.6 billion. The figures indicate thatwhile data traffic is growing, global mobileoperators still face some challenges inbuilding experience-oriented networksthat also prove to be capable ofoptimising network value.

In its report, titled Global cellular markettrends and insights — Q4 2016, GSMAipaints a picture of steady and relentlessgrowth in the mobile industry, particularlyin terms of mobile data usage.

Certainly, mobile operator transformationsare being driven by the continued growthin data traffic, but more importantly bythe fast-rising quality of service (QoS)expectations of subscribers.

According to a recent study by JuniperResearch, global average smartphonecellular data usage will reach 5 GB permonth by 2021, up from 2 GB in 2017,while video will account for 60% of globalmobile data traffic in 2017, beforeapproaching 80% by 2021.

Ignoring any traffic generated by theInternet of Things (IoT) and machine-to-machine (M2M), the research companyclaimed that data from smartphones,tablets and feature phones would growfourfold between 2017 and 2021 to reachover 700,000 petabytes.

The GSMAi also noted that total mobileconnections excluding M2M reachedalmost 7.5 billion, while unique subscriberswere just over 4.8 billion. And connectionscontinue to grow, with GSMAi predictingan increase of 5.1% excluding M2M in thefirst quarter of 2017. Mobile broadband,meanwhile, accounts for 54% ofconnections, and the mobile Internet for74% of subscribers.

In Q4, smartphones accounted for 51% ofconnections, and this is expected toreach 52% in Q1 2017. Annual growth in4G connections was 55%, while 4Gcoverage accounted for 59% of the totalpopulation in Q4 2016 compared to 48%in Q4 2015.

LEADING OPERATORS SHOW THEWAY FORWARD

Denmark’s TDC and the Spain-basedTelefónica Group are examples of twooperators that have focused on how tomaximise the value of their currentnetworks. TDC, for example, noted thatthe volume of data traffic in the mobilenetwork is doubling almost every year.

“Danes are data-hungry and they willdemand even higher speeds in the future.The TDC Group is therefore working hardto stay abreast of developments, and weare continuously introducing the latesttechnology for the benefit of ourcustomers,” the company said.

Global cellular market trends and insight — Q4 2016�GSMA Intelligence

EBITDA %Opex %Capex %

19%22%

67%75%

33%34%

Q4 2016Q4 2015

Other non-voiceDataVoice

45%48% 43%40%

12% 12%

Q4 2016Q4 2015

Blended ARPU

Voice ARPU

Data ARPU

$4.0

$4.4

$9.5OFCF

EBITDA

Capex

Opex

Data revenue

Non-voice revenue

Voice revenue

Non-recurring revenue

Recurring (service) revenue

Total revenue $271

$219

$52

$99

$123

$94$181

$51

$89

$38

Percentage of total revenuePercentage of recurring (service) revenue

ARPUMobile operator financials ($ billion)

Mobile IoT Smart Cities

IoT Big Data

Connected Vehicles

Health

Remote SIM Provisioning

IoT Security & Connection Efficiency

IoT Policy & Regulation

OPERATORS SEEK TOOPTIMISE NETWORKVALUE TO MEET QOS DEMAND

by Mobile World Live

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As part of its strategy for the 2016-2018period, the operator aims to change itsmindset from that of a traditionalincumbent to a customer-centricapproach, with the integration ofbusinesses and technology and white-label solutions and partnerships at the topof its agenda.

Telefónica, is also aggressively tackling theissues of network efficiencies and QoScalled for within its digital transformationstrategy. The company admits that theupheaval associated with this move, whichis underway in 15 subsidiaries, is not trivial.

“The magnitude of transforming thecompany’s end-to-end (E2E) businesssystems involves a radical overhaul toensure a common set of businessprocesses, the standardisation of itssystems architecture and ensuring itsoperations and infrastructure are capableof delivering a scalable network,” said thecompany’s global CIO, Phil Jordan, at arecent Huawei event focusing on digitaltransformation.

“This is a three-pronged approach. We willtransform how we interact with the

customer, the way we work and how weoperate internally. This will mean thereplacement of systems, but it’s more thanjust changing IT,” added Jordan.

Noteworthy is Jordan’s admittance thatTelefónica subscribers had become veryadept at spotting when a service was notdigital end-to-end, and confirmed thatpart of its transformation strategy wouldsee an ever increasing shift towards thebundling of services - “our own andothers.”

“We’re now bundling many more of ourproducts to include mobile, MBB, TV, etc.in an effort to simplify the orderingprocess for customers. As such, we’vereduced by 50 per cent the number ofproducts we have in our catalogue, andmore so in our B2C sector. This has alsosignificantly cut the number of associatedsupport systems. In Spain, we’re nowalmost a one-product company, which ishugely different from where we were,”said Jordan.

Telefónica has been in the process oftransforming its operational structure forsome years now, and has already begun

to experience some of the benefits of thisprocess. After dropping to fifth place inthe last ranking of global operators basedon reported mobile connections(including cellular M2M) and mobilerevenues by GSMAi, Telefónica Groupclimbed back to third position in theranking for the second quarter of 2016following the reconsolidation of its UKoperation after its sale to CK HutchisonGroup was blocked.

Operators have been forced to take somefar-reaching measures in order to improveoperational efficiency, includingoutsourcing large swathes of theiroperations.

Sunrise, for example, recently signed amanaged services agreement withHuawei that has seen the operatoroutsource its ICT operations. TheSwitzerland-based operator said it hasbeen able to optimise its opex structureby using synergies and through thesimplification of its operations in differentareas. On the capex side, the operator hasbenefited from the use of pre-developedservices from its partner instead of self-development. It has also increased the

usage of shared platforms within Sunrise,including a new virtualization environmentfor IT and communications to optimisecapex investments.

OMNICHANNEL ADDRESSESDIGITAL TRANSFORMATIONCHALLENGES

The need for outside assistance will growas operators migrate to an E2E digitalinfrastructure, according to Ovum. Theskills required may not necessarily betelecoms related but more centred oncustomer experience management(CEM), applying big data analytics andautomating business processes.

Fixed and mobile operators havetraditionally handled customer interactionthrough IT silos. In such an environment,customers discretely engage with theoperator at a number of separate front-end touchpoints. These could range fromphysical stores and call centres, to theweb, social media, online shopping cartsand e-mail notifications. Each touchpoint,typically, has its own back-end dedicatedIT support system.

‘Omnichannel’ – a bedrock of any digitaltransformation – does away with vertical(and disjointed) IT architectures of thissort. Through the use of consistent,consolidated and current customer data,customers – offline or online – can get aconsistent, continuous, seamless andpersonalised brand experience.

A well-tuned omnichannel, whereappropriate workflows and processes arein place, will also allow mobile operatorsto become predictive. Based on datausage patterns and previous actions onoperators’ websites or apps, they aremore likely to recommend products andservices that customers are actuallyinterested in.

The attraction of omnichannel means it’shigh up on the agenda of the OpenROADS (Real-time, On-demand, All-online, Do-It-Yourself, and Social)community. Initiated by Huawei, thecommunity was launched at Mobile WorldCongress in February 2016 and addressesthe digital transformation challenges thattelcos face.

As with most aspects of a telcotransformation, however, omnichannelrequires both a cultural and technologyshift. “Historically, telcos have beenproduct-centric,” said FrancescoVenturini, who heads up the

communications and media division atAccenture. “They need to become data-centric and customer-centric.”

As this shift evolves then the need for helpwith cloud delivery and virtualisation willalso grow, together with the revamping ofoperations, organisational and processchanges.

This complex picture also involves asignificant cultural change for operators.While basic connectivity will remain as acornerstone to an operator’s business, thefuture will be much less about spectrum,3G/LTE and coverage than aboutwholesale automation.

Not everyone within the industry is readyfor this divergence away from thetraditional operator model or has thenecessary skills sets. But like many othermature industries, mobile telecoms isembarking on a journey that willirrevocably change how it conducts itsbusiness, and there will be casualties inthis brave new world.

NETWORK 2020

At the same time, mobile networks aregetting better and better. Across theworld, mobile operators are harnessingInternet-style technologies to providecompelling and innovative services in anefficient and flexible way.

The GSMA Network 2020 programme ismaking it straightforward for operators to

harness the full potential of IP to delivereverything from group chat and advancedvoice services to the IoT and live HDvideo. These advanced communicationsservices will raise the profile of operatorsand increase their profitability in anincreasingly competitive and fragmenteddigital services market.

Voice-over-LTE (VoLTE), video-over-LTE(ViLTE) and voice-over-Wi-Fi (VoWi-Fi)now underpin an array of compellingmultimedia communications services withreliability, security and reach that go farbeyond Internet-based alternatives.

Global cellular market trends and insight — Q4 2016�GSMA Intelligence

Q4 2015

Q4 2016

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Mobile broadband as% of connections

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3G coverage as a percentage of total population

Smartphones as a percentage of connections

Network technology connections annual growth

Network technology as a percentage of connections (excluding M2M)

Mobile broadband and mobile internet adoption

4G coverage as a percentage of total population

“Historically,telcos have beenproduct-centric.They need tobecome data-centric andcustomer-centric.”- Francesco

Venturini, Accenture

INTERVIEW: NTT DOCOMO | 1312 | INTERVIEW: NTT DOCOMO

Customers can accumulate d Point according to the amountspent, or use it as payment when they use DOCOMO orpartner companies’ services. Through the expanded flow ofcommerce with the merchants where you can use d Point(physical/Internet space), we want to increase the subscriptionof our own services such as digital content, as well as amountof transaction in financial and payment service focused oncredit card business.

We want to increase the number of merchants where d Pointcan be used to among the top in Japan.

It has been one year since its launch, and merchants areincreasing steadily. We definitely feel a good response

Q: What IT infrastructure element is important forsupport of this strategy?

KM: We are providing a variety of services relevant to dailylives of customers. In order to propose more appropriatecommercial products, promote cross-selling, and enablereciprocal flow of customers to/from partner companieseffectively, we will need to understand behaviours andcharacteristics of customers better than now.

For this, we believe it is critical how we can create a system bywhich we understand the individual “customers” better andmake them more visible from the big data such as theirattributes, state of subscription and actual usage, its is alsocritical to set up a mechanism which enables us to presentideas in appropriate timing and location.

Q: What impact does the smart life business have onDOCOMO’s revenue and market share? Can you give

some specific examples of this directly leading to profit?

KM: The customers using smart life business services havehigher customer retention rate of subscription of mobileservice, and as a result they are contributing towards therevenue of DOCOMO as a whole, and towards a improvedshare of the mobile business market. For example, holders of

credit cards issued by DOCOMO have a significantly lowerchurn rate for mobile services than those who do not.

In addition, we have recently carried out a process of revisingour services so those who do not have DOCOMO mobilephone subscription can also utilise smart life business services,whereby we are approaching a new customer segment, andas a result we believe this can contribute towards an increasein total revenue of DOCOMO.

Q: What kind of company will DOCOMO be with theprogress of this strategy?

KM: Through the evolution of the service and pursuit of +d, wewant to provide services customers feel are more fun,convenient, comfortable, and affordable. We also want to tryto resolve social issues in Japan, be that change in work style,decreasing number of children, aging society or strengtheningour international competitiveness.

By pursuing these endeavours, we believe we will be acompany that customers perceive to be intimate, reliable, andadvanced.

Kyoji Murakami, Executive Vice President andMember of the Board of DirectorsNTT DOCOMO

Q&A:

Q: Can you describe the background and the reasons forNTT DOCOMO pursuing the smart life business?

Kyoji Murakami (KM): The number of subscriptions in Japanis 150 million – penetration is more than its population (126million), and further growth of voice service cannot beexpected. In addition, with the growth of MVNOs and thesevere competition with MNOs, we are intensifying theendeavours of smart life business so as to lead to a sustainablegrowth.

The results are showing up steadily in numbers - cumulativeprofit for FY2016 from smart life domain up to Q3 (April -December) was 98.2 billion yen, a 42% increase year on year,showing a steady growth.

Q: What type of specific services are you providing?

KM: For consumers we are providing three categories ofservices. The first includes digital content services, such as thevideo delivery of movies and dramas, unlimited music service,and all-you-can-read magazine viewing service.

The second covers the field of health, gourmet, and education.You can manage your health conditions, get information onrestaurants, and use other services that can make the daily lifemore convenient and comfortable.

The third area covers financial services, such as credit card andconsultation on insurance.

For enterprise customers, we are providing services thatprovide marketing support and solve the issue specific to thatfield in a variety of categories such as retail, health andmedicine, education, agriculture and fishery

Q: What is the major strategy behind this endeavour(smart life business)?

KM: By combining and connecting assets such as DOCOMO’sservice, technology and customer base, and group/partnercompanies, we generate innovation and collaboration, andprovide the ever-improving value – we position that as one ofthe major strategies.

Particularly, endeavours to create services in “co-creation” withpartner companies – we call this +d (“plus dee”), and theseendeavours enable us to provide new services very quickly ina variety of fields.

Q: What are the key projects you have achieved so far?By this can you tell us about the future target? Is your

current strategy working?

KM: One of the key projects was launching of d Point as a toolto connect services and partner companies.

“The customers usingsmart life businessservices have highercustomer retention rateof subscription of mobileservice”

Smart life

INTERVIEW: TELEFONICA GROUP | 1514 | INTERVIEW: TELEFONICA GROUP

a multi-year business-led transformation that is re-implementing our business operations with new end-to-endcustomer journeys and enabled with new technology thatallows us to move the business to become end-to-end digital.We track the enablement of digitalisation through a key KPIthat we have created that uses the drivers of real-time andautomation in all our customer facing processes and hasenabled us to measure digitalisation in our business, trackprogress and target our transformation investment.

Q: What are some of the important lessons that havebeen learned so far, and how have those shaped your

strategy for the future?

PJ: As this is a transformation that hasn’t been addressed toooften in our industry, there are many lessons we are learningwith our partners as we transform. For example, some of ourcore beliefs were confirmed, such as that businessengagement and willingness to adopt change represent the‘X-Factor’ in transformation success. Then there were somesurprises. For example, as you run multiple transformations ina co-ordinated way, some of the best value of reuse has beenin the buying, contracting, governance and changemanagement and not in the development and build of acommon solutions architecture. Key to lessons learned isobviously not in the identification of a lesson but the learningpart! One of the advantages of being a group is that we getthe opportunity to learn quickly and optimise our approachconstantly, and this is key to success.

Q: As a global telco, Telefonica also faces the challengeof transforming companies with very different culturesand histories. What can you tell us about your progress withinthe different regions?

PJ: We are driving the same transformation across manydifferent countries, cultures and with some shared history butall with local customers, regulators, competitors, strongindividual needs and identities. To cope with trying to drivestandardisation and transform a group and optimise ourapproach by learning lessons quickly we have used a verysimple model to guide us: why, when, what, and how.

“Why” and “when” a country needs or wants to transform is alocal assessment, and the “what” and “how” we transform iswhere we take a standardised approach. This ensures thecountry CEO can always control benefit realisation, priorities,timing and pace, while globally we can make sure that themodels, blueprints, frameworks, processes and systems havethe standardisation we need for the global digital market weare facing.

We are now live with the new capabilities in seven markets inBrazil and HispAm, and have migrated more than 60 millioncustomers. In 2017, we will have 10 markets live includingEurope and many more tens of millions of customers migrated.

Q: An important part of a telco’s digital transformationis to improve the customer experience. Are youstarting to see improvements in this area? What more needsto be done?

PJ: Every customer you migrate to new customer journeyssupported with new technology that is designed to be digitalis an improvement in experience. Migrated customers canmanage their relationship with us in real-time, have the ability

to engage us through any channel and stop and start wherethey want. They can increasingly do everything they need tofrom an app on their smartphone, and much more. In terms ofwhat more we need to do: we need to migrate all ourcustomers and then exploit the capabilities that we haveenabled alongside a new approach to insight and data that wefeel will reset expectations of customer experience from atelco – exciting times.

Q: How long do you expect this process to take - at leastin terms of the fundamental changes in technical andthe cultural shifts that are required?

PJ: The programme of changing processes and technology isadvanced but continues. The migration of all our customerswill continue for a few years as we always need to balance thepace of transformation alongside delivering the high quality,robust and secure services our customers expect and also thereturns our shareholders expect from Telefonica.

The culture change is happening now but may never stop inthe same way that our customer demands and expectationsnever stop growing. After digital, it’s data, then it will bedecisioning … the pace of change is only going to get faster.

Q: What kind of company would you like Telefonica to beby the time we reach the next decade?

PJ: I would like Telefonica to be a leaner, simpler, faster, digitaland data services business with outstanding connectivity stillat the core of its value proposition.It will be renowned for:• an insight-driven digital customer experience;• protecting customer privacy whilst helping them live a richand full digital life;

• Being a trusted ICT partner for business and organisationsthat are transforming and growing their business in thedigital world.

Phil Jordan, CIO,Telefonica Group

Q&A:

Q: You have previously described digital transformationas the “hardest thing a telco will ever do”. Can youexplain some of the broader challenges that you expect to faceduring this process?

Phil Jordan (PJ): To transform into a digital telco effectively, itmust be a holistic and end-to-end process across the business.Digital at the ‘front’ of the business in all customer interactionsand digital in the ’back’ in all business operations. Being digitalmeans lots of things to lots of people, but at the very least itmeans all experiences and interaction of operations becomingreal time and automated. It is a complete transformation ofbusiness model, processes, policy, product design, systemsand ultimately culture, skills and mindset. This is a scaletransformation that will define the future of telcos and thewhole industry.

Q: Which is the greater challenge for a telco and why: thetechnical transformation, or the cultural changes that

are required?

PJ: Rethinking how our business operates, the changes in waysof working, processes, skills, data focus and digital mindset aremuch more demanding than the technology transformation.However, the individual challenges aside, it is imperative wedon’t address transforming technology and transformingculture or ways of working in a business in separate terms. Thefuture will only accommodate businesses that are digital end-to-end, operating in real-time, in an automated way, using datato enrich customer experiences where increasingly cognitivedecision-making is supported with machine learning. Anybusiness that isn’t addressing the transformation of businessand technology in parallel will fail.

Q: Can you describe some of the steps that Telefonica hastaken to date and when the process of digitaltransformation began?

PJ: The digital transformation process at Telefonica is anumber of years old now. We started with a focusedsimplification of our business. We identified very quickly thatthe complexity of our business model and operations were notready for transformation. So we embarked on a group-widesimplification of product portfolios, offers, processes, systemsand our technology infrastructure. This has been followed by

“The future will onlyaccommodate businesses that are digital end-to-end,operating in real-time, in an automated way.”

“One of the advantagesof being a group is thatwe get the opportunity tolearn quickly andoptimise our approachconstantly, and this is keyto success”

Digital end-to-end

INTERVIEW: SUNRISE | 1716 | INTERVIEW: SUNRISE

Q: What is the timeline of this managed servicesagreement and what do you hope to have achieved

once it has been concluded?

MF: The IT managed service agreement is signed for five years.Our intention is to front load the development, i.e. achieve amajor part of the ICT convergence and realize the operationalbenefits already during the first two years of the partnership.

Q: How will this impact the types of services that Sunrisewill be able to offer to its customers and whatimprovements should customers expect to see in future?

MF: Using standard services internally at Sunrise will enable usto show the benefits also to Sunrise’s end customers andoffers further opportunities to also resell such IT services. Inparallel, there could also be new ICT services offered forbusiness customers that combine IT and CT topics.

Q: What role will this outsourcing agreement play inhelping Sunrise to achieve its overall goal of becoming

a digital service provider?

MF: The agreement does play a major role, as you also have tobecome digital internally to be a digital service provider. Theuser workspace is a key element here, and Huawei can and willsupport that area with their services to drive digitalisation. Oneof the first topics will be the integration of mobile devices intoour IT infrastructure to increase mobility and productivity forour internal users.

Q: Can you reveal what progress has been made to datein the operator’s transformation process, and providesome details on some of the key challenges that still lie ahead?

MF: We only took this live two to three months ago, but wehave already been able to ramp up a new ICT virtualisationplatform, based on Huawei technology (Huawei Hardware andFusionsphere) to start the process of network virtualization.We initiated first client improvements and rolled out a newservice management toolset for ICT.

There are also different transformation projects running inparallel. In mid-December, all employees had the opportunityto participate in a survey about their workplace IT equipment.The score achieved was an encouraging average of 7.34 pointsout of 10. This confirms the high quality of our office ITequipment since one of the main challenges of digitalisationrelates to the use of technology by our employees.Digitalisation requires changes in processes, and people needto be supported throughout this change process.

Marc Frankenhauser, Senior Manager, Commercial Management,Sunrise

Q&A:

Q: Sunrise recently signed a managed servicesagreement with Huawei that will see the operator

outsource its ICT operations. What were the primary driversbehind this move?

Marc Frankenhauser (MF): The reasons were to improvequality and flexibility whilst improving the operational costbase at the same time. Therefore the intention was to usemarket standards for commodity services, like client andserver operations. Standard services should also allow themuch faster rollout of new technology internally, as nodedicated development would be needed. In parallel, using thesame infrastructure for IT and communications technologies(CT) should gain further operational benefits and synergies.

Q: What elements will Huawei be responsible for and which elements have been retained by Sunrise

and why?

MF: By signing the IT managed service agreement, Huaweitook over the full operation of IT infrastructure, office IT andservice desk. That includes full IT operation for LAN/WAN,storage, servers, desktops and notebooks and the usersupport. Sunrise itself retained all non-commodity IT servicesand business application topics, including applicationoperation, development and project management.

Q: Sunrise expressed that it wants to improve its flexibilityby outsourcing its IT operations. What benefits do youexpect this to provide?

MF: Using already developed solutions and economy of scaleof the provider should drive much faster rollout of these ITservices.

Q: Can you provide details of the capex and opex benefitsthat improvements in operational efficiency will bringand how this will impact the company’s overall networkoperation?

MF: It was possible to optimise the opex structure by usingsynergies and through simplification in different areas. Oneexample is the onsite service for IT and CT: before the newmanaged service agreement, Sunrise had two differentproviders. Now, Huawei’s field service is also supporting the100 Sunrise shops within Switzerland. Another example isusing the Huawei 24/7 network back office also for IT services.

On the capex side, optimisations are seen mainly in two areas.The first is the already mentioned use of pre-developedservices from the partner instead of self-development. Thesecond topic is increasing the usage of shared platforms withinSunrise, e.g. a new virtualization environment for IT and CTtogether to optimize capex investments.

“You also have to becomedigital internally to be adigital service provider.The user workspace is akey element here.”

OutsourcingICT

INTERVIEW: TDC | 1918 | INTERVIEW: TDC

Q: Can you provide some insights into how you arebuilding the “best and fastest mobile network”?

KSK: We built the best mobile network in Denmark in a strongand close partnership with Huawei and together we have beenable to keep up with the increasing demand for higher speed,coverage and quality in order to stay ahead of our capablecompetitors in Denmark. The customer community inDenmark has acknowledged this premium position both onthe residential and business market.

Q: What are the primary challenges you face in themobile market today that force the pace of this

transformation progress? What challenges have youovercome, and what are the challenges that still lie ahead?

KSK: The mobile market in Denmark is highly competitive withchallenging expectations on increasing speed, full coverageand low pricing. The use of smartphones is exploding and inthe horizon we see an increasing demand for IoT connectivity.To this end we are planning the rollout of NB-IoT in line withthe evolution of IoT solutions in Denmark. Furthermore, wehave launched VoLTE and have demonstrated speeds of 1Gbps in the mobile network preparing for a future.

Q: Can you outline the expected benefits this process willbring to the TDC group, and why?

KSK: TDC’s strategic goal is to remain number one in theDanish mobile market. The benefits of this position is alreadyshowing its value in terms of:

A significant increase in the overall customer experience i.e.the perception of TDC as having the best mobile network isnow the dominating factor in customer’s evaluation of TDC;

Increasing sales and reducing churn levels within both theresidential and business market

Agile and cost effective network development, operation andmaintenance.

Q: What will be the benefits to your customers? How willyou ensure that you will be able to provide an

improved customer experience?

KSK: The customers will benefit from an always-on experiencewhether at home or away when using their mobile devices.With the increase in speed they will use the devices for allcommunication from voice through TV to gaming and alwayswith a high quality level. This requires a superior mobilenetwork, which is what TDC provides and will provide longterm in Denmark.

Q: What do you expect your mobile network to look likein 2018, and what impact will maximize the value of

your network have on the services that you will be able toprovide in future?

KSK: In 2018 we have started the strategic virtualizationtransformation journey on all our networks including themobile network in order to improve agility, customerspecific configuration, remote control and cost levels.Forecasts for the Danish IoT market suggests a gradualbuild-up in 2018, which will be supported by TDC’s growingNB-IoT coverage.

Q: What kind of market player do you expect and hopeTDC will become in future?

KSK: From a network perspective, TDC will be the number oneprovider of connectivity in Denmark across mobile, coax, fibreand copper technologies and we will offer a coherent and easycustomer experience across services used in the daily life.

Commercially, we will deliver the communication andentertainment services that individuals, households andcorporations demand with the ever-increasing speed, qualityand customer experience that is necessary to comply with inorder to compete.

Kim Søgård Kristensen, Executive Vice President & CTO,TDC

Q&A:

Q: Can you provide an overview of your strategic plan for2016–2018 that is centered around two metrics:customer satisfaction and cash flow generation?

Kim Søgård Kristensen (KSK): TDC Group launched thecorporate strategy “Simpler and Better” in January 2016 andone year down the road we set out the following the strategyplan. The strategy is based on three customer promises:

Better connectivity – by continuing to deliver best speed,quality and coverage through uniting our unique assets;

Better offerings and entertainment – by delivering relevantproducts both today and tomorrow;

Better customer experience – driven by best customer insightsand digitization.

Q: What progress has been made with this strategy todate? Can you reveal any key milestones that have

already been achieved?

KSK: Some of the key milestones that have been achieved sofar in the strategy implementation are:

Keeping and strengthening TDC’s position as provider of thebest mobile network in Denmark to the customers;

Launching a highly ambitious GigaSpeed programtransforming TDC’s coax network into a state-of-the-artDOCSIS 3.1 based network that offers Giga speed to more thanone million households within the strategy period;

Developing and launching a brand new TV platform and set-top box solution targeted towards TDC’s Cable-TV customers.

“TDC’s strategic goal is toremain number one in theDanish mobile market.”

Simpler and better

INTERVIEW: HKT LIMITED | 2120 | INTERVIEW: HKT LIMITED

Q: What progress have you made to date with thistransformation strategy? Can you reveal any key

milestones that have been achieved, as well as the investmentsthat will be required?

PL: HKT has partnered with Huawei to pioneer a digitaloperation transformation project since 2016. We analysed thecurrent ‘pain-points’ and discovered the demands of enterprisecustomers. Through a series of workshops, we defined thescope and project objective. We have gone through a‘planning and design’ phase, which involves an assessmentbased on a digital maturity model for digital operationbenchmarking purpose. We formulate an overall architecturedesign and roadmap of deliverables. We also have gonethrough a series of design thinking workshops to understandcustomer’s demands from an outside-in perspective andconducted some pilot tests.

Investment areas involve consultancy services, redesigning theprocess to be customer-centric, developing people digitalcompetence, enhancement of back-end capabilities, inventorysystem, operation support systems development and networkinfrastructure build.

Q: Can you provide details of some of the technologiesyou plan to deploy to achieve your eventual targets?How has this changed the relationship you have with thevendor community?

PL: Key new technologies we plan to deploy include:Cloud computing;Big data analytics solution;SDN;NFV;

Employing a DevOps model to re-engineer enablingtechnology platforms.

Adopting open standards, open source, and an API-basedinterface is the technology trend, especially in the upcomingdigital era. Operators tend to follow open standards inpurchasing vendor solutions.

Q: What challenges have you faced so far as youtransform from being a CSP to a DSP, and what are the

challenges that still lie ahead?

PL: One big challenge is about the engagement of differentbusiness units within the company. As digital transformationinvolves the entire customer journey, support from differentbusiness units is critical.

For the technical side, the detailed design of data structureand the digital operations platform is no doubt a challengingtask.

Data is an important element in today’s digital world; it playsan important role in the customer journey management. Thisincludes logging down details of personal interest or customerexperience at different customer touch points. Today, we havea big data engine to manipulate a high volume of data; but thelegacy data structure does not fit today’s needs. We need toadopt a greenfield approach towards data structure andsystem design to “unify” the data, and there is no standard orbest practice for us to use as a reference point.

Similar challenges apply to API management: we want to buildthe new digital operations platform with standard APIs tointerface with the outside world.

Q: Can you provide an overview of the benefits that adigital transformation will have both for HKT and forits customers?

PL: The key benefit to customer is all about a good customerservice experience. We would deliver in real-time, online andon-demand; allow self-management via the web portal; andprovide DIY-enabled services to our customers.

For HKT, everything should be based on best practice andopen standards. Service provisioning automation is realizedthrough digital transformation. Service provisioningautomation would also mean lower operating costs with higherproductivity. We also expect a better network resourceutilization by employing cloud and SDN technology, which inturn will lower capex investment for new service developmentin the long run. The development cycle for new services shouldalso be significantly reduced.

Q: Can you provide an example of the kinds of servicesyou hope to provide in future following the completionof this process? What are the added benefits that HKT will beable to provide?

PL: After completing the pilot phase of the transformationprocess, HKT would like to firstly launch three businesssolutions for the enterprise market, namely:

One Communication, which is a comprehensive unifiedcommunication service based on IP Centrex technology andbroadband access;

Commercial mobile, which includes features like privatenetwork access, usage differentiation among personal /company use for BYOD, IoT related features;

Cloud-based services including IaaS and SaaS; this can includebig data analytic solutions.

Q: What kind of market player does HKT hope and expectto be in future?

PL: HKT is currently striving to strengthen itself in every aspectas an omnichannel player, and we would like to move forwardto build an open and collaborative digital ecosystem andbecome a true digital service provider.

On top of our quadruple-play services (telephone, mobile, TV,broadband), we are also a cloud service provider. HKT has avery rich service portfolio. We also expanded our transactionservice to cover mobile payment (Tap n Go Service) andcharging facility for electric vehicles (Smart Charge)

The application of IoT, big data, virtual reality (VR), augmentedreality (AR), artificial intelligence (AI), and connected vehicleswill become popular in the near future. We believe our digitaloperation transformation will enable us to better capture thesenew business opportunities as a true ecosystem player.

Peter Lam, Managing Director Engineering,HKT Limited

Q&A:

Q: HKT said it is embarking on a digital transformation ofits operations in order to become a “customer centric”rather than a “network centric” operator. Can you provide anoverview of this strategy as well as a timeline for targets? Howlong will this process take, according to the current plan?

Peter Lam (PL): Telecommunication service providersnowadays are facing increasing challenges and competitionfrom OTT players in terms of service innovation, time-to-market and customer service experience. In order to sustaincontinuous business growth and stay competitive in themarket, telecommunication service providers have to embarkon and commence their digital transformation processes todifferent extents. Digital transformation is about creating afuture-proof, customer-centric organization that provides anengaging culture and an encouraging environment forinnovation. It involves company-wide transformation, frombusiness strategy and operations, front-end and back-endsupporting system, to the underlying network andinfrastructure, together with people development.

Our objective is to deliver customer-centric service throughdigital operations. This includes superior customer serviceexperience and more agile and compelling digital services.

As a starting point, HKT first embarks on its digitaltransformation in business solutions for the enterprise market.We analyse the current ‘pain-points’, discovering servicerequirements of enterprise customers by walking through thecustomer journey from an outside-in perspective through a“design thinking” process. We then implement the requiredoperation transformation in different areas to build businessoperation and the ICT infrastructure with agility to keepmeeting and exceeding customer expectation. With thelessons learnt in enterprise market digital transformation, weplan to gradually extend our digital transformation to otherareas such as the consumer market.

The company-wide digital transformation project will takethree years to realize. The planning and design phase focusingon the enterprise market segment started in 2016.Implementation is expected throughout 2017 to streamlineoperations through enhancement of business support systems,ICT infrastructure cloudification and virtualization. Thisprovides HKT with the business agility to offer customer-centric solutions and services for our enterprise customers. Asimilar digital transformation process for the consumer marketwill be kick-started in the second half of 2017.

Q: Can you explain what being a “customer-centric”operator means for the future of HKT and why it is soimportant that the operator has embarked on this process?

PL: Being ‘customer-centric’ means delivering the service witha focus on what the customer wants, as opposed to focusingon system capability or the enabling technology. This includesdelivering a superior customer service experience in everyaspect during the customer journey: from awareness,customer engagement, buying, service provisioning, customercare, billing, operation assurance, renewal, etc and involves allcustomer touch points.

It is important for HKT to be a “customer-centric” operator asour customers already receive a digital customer experiencefrom services provided by other digital services providers (e.g.OTT players). They now expect the same service experiencefrom a telecommunication service provider like HKT.Customers are looking for a service experience that is ‘real-time’, ‘online’, ‘on demand’, ‘self-serve’, and wants to stayconnected to their social circles to share views andexperiences. Telecommunication service providers have tomeet all these customer expectations, and digitaltransformation is the way to achieve this.

“Being ‘customer-centric’means delivering theservice with a focus onwhat the customer wants,as opposed to focusingon system capability orthe enabling technology”

Customer-centric

INTERVIEW: ORANGE | 2322 | INTERVIEW: ORANGE

such as OpenNFV, where Orange is one of the maincontributors (with suppliers), OpenDaylight and OpenStack.

Unfortunately, we have not yet seen third-party orchestratorsable to orchestrate major VNFs from other suppliers. Theorchestration domain has seen many Opensource initiatives(Around ECOMP, Open-O, Open-OSM…). Orange would likethis ecosystem to stabilise and to narrow down to feweroptions, so that the industry can handle interoperability andsustainability.

That is why Orange has decided to support the OpensourceECOMP initiative and is currently trialling ECOMP in Poland.ECOMP is today the most advanced in the orchestrationdomain because it is operational in AT&T and because it is theonly one that comes with all the components necessary tohandle all life cycle aspects: design, onboarding, monitoringand policy for automation. We would like to reunite allOpensource initiatives of the domain. This is really anopportunity to drive the industry and stabilise technicaloptions. One key deliverable is to standardise VNF guidelines(how to describe them and how to on-board them, forexample.) so that VNF providers may focus on one way todeliver them. Another hot issue is the integration with cloudfor instance by focusing on Openstack and the relevantInfrastructure (IAAS, IAAS+…).

Q: In terms of provision of services, what changes are weseeing and what should we see from Orange as ittransforms from a CSP into a DSP?

RK: Obviously the changes are major in the domain ofoperation (Run), working closer with developers and havingto operate continuous integration and development (CICD).Also innovation and engineering (Think and Build) have towork with the virtualisation framework, using VNFs. This has amajor impact on the relationship with suppliers (procurement,how to integrate faster and test, continuous releases…).Drastically increasing the speed of delivery is the consequenceof Orange transforming into a DSP. Our customers will be ableto provision their services on demand.

But this change is well beyond Think, Build and Run. It assumesa major change of culture throughout the company. This is whyOrange will soon launch its “Software Academy”. In a nutshell,this training programme aims at sharing a common culture ofagility and software, at integrating better software logics &tools for people working in network, IT, marketing, design orHR, with the objective of increasing the number of softwareengineers within the group.

Q: What are some of the most important lessons youhave learned as you move further towards digitisation,

virtualisation, and the melding together of telecoms and IT?

RK: The industry is still at the start. So only some first lessonscan be shared. Working internally in DevOps mode is not easyand must be supported with adequate tools (automation oftests, configurations) and operation dimensioning (impact onoperation back office). We need to strengthen the linksbetween DevOps teams, with their culture of autonomy, andengineering teams with their culture of technical rules (forexample, introduce a new monitoring mechanism versusrelying on an existing OSS tool that is not easy to modify). Weneed to introduce flexibility in our OSS (APIs for legacy, micro-services for new OSS).

We must also learn to work in ‘DevOps’ mode with suppliers.This is certainly more difficult. That is why we have sponsoredJAD – Joint Agile Delivery – catalysts at the TM Forum. As awhole the industry needs to improve life cycle management.

Another key learning is how to handle Open Stack releases.The Open Stack Newton version will certainly help.

More importantly, virtualisation has an impact on ourorganisations that may be difficult to change, for instancewhen IT and network are handled by different units withdifferent processes and tools. If IT and network teams do notuse the same trouble ticket systems, it makes it difficult forthem to work together. We decided to use the network systemand process. This has a major impact when pre-existingprocesses and SLAs are not the same.

Another interesting example was to decide who is responsiblefor an orchestrator. On the one hand, developments are doneby the IT entity. On the other hand, only operations really knowwhat to do. We had to create a mixed responsibility on thisorchestrator.

Overall, we still have to learn in all domains: IT infrastructure,operations, DevOps improvement and tools and processes.

Q: Telcos are not only undergoing a massive change at atechnological level, but also at a cultural level. As aformer state-owned company that has already witnessedsignificant upheavals in the past, do you think that Orange isnow ready to embrace a digital future and all that entails?

RK: Orange is both a former incumbent (France, Poland,Jordan, Ivory Coast etc...) and a new entrant (Spain, Belgium,Romania, Slovakia, Egypt, Tunisia, Morocco, Mali…). We havelearnt from both aspects and learnt to transform ourselves tostay competitive. For instance, in the operation field, we havecreated shared NOCs (network operating centres) in Europeand MEA. All our countries have implemented servicemanagement centres focusing on customer experience andservice operation.

Orange is doing everything to transform into a digital, efficientand responsible company. Both from a technical point of viewand through its employees, for example through the afore-mentioned ‘software academy’ programme, Orange iscertainly getting prepared for the digital future.

Obviously, all operators are undergoing similar transformation.We favour non-competitive exchanges with other operators.For instance, in the Open Roads Initiative, Orange leads astream on culture and skill with the aim of defining hownetwork job lines are going to be changed, and defining amaturity model to help the transformation.

Q: With such foreseen transformation for networkoperation and culture, what kind of company will

Orange be after 2020?

RK:Orange wants to fulfil its Essentials2020 strategic ambitionto be always in touch to connect what’s essential in ourcustomer life, being a digital, efficient and responsiblecompany and meeting its ambition to provide an unmatchedcustomer experience.

Roberto Kung, Senior Vice President Qualityand Operations from Orange

Q&A:

Q: You presented Orange’s vision on operationtransformation as part of Orange’s Essentials2020

ambition, to ensure that it is able to meet the changingdemands of customers through new digital services. Can youprovide examples of the group’s progress to date?

Roberto Kung (RK): Essentials2020 is Orange’s overallstrategic plan, focusing on being ‘always in touch to connectwhat’s essential’ and with the ambition to deliver anunmatched customer experience. Operation transformation isone cornerstone of Essentials2020, providing enrichedconnectivity and based on the convergence of IT and networkto provide new digital services.

Some technological examples of the group’s progress are theintroduction of Orange’s own internal standard on big data,extensive use of analytics, the introduction of TMF-based APIsin OSS/BSS, and a definition of Orange infrastructurereference design for virtualisation.

Some operational examples of the group’s progress are the useof DevOps by our service platform operation entity for the wholegroup (created in Romania in 2009), the introduction ofautomation in mobile (C-SON), the introduction of multipleequipment implemented with a virtualisation approach (however,still with vendor- specific approaches), and last but not least theworldwide deployment of Orange ‘Easy Go’ last year in 70countries, providing SDN connectivity for multinationalcompanies and based on virtualisation and orchestration.

Q: What are the primary driving forces behind suchoperation transformation?

RK: In one word: ‘agility’. We can no longer accept slow life-cyclemanagement, waiting for the next release in six months or evenone year. A telecoms operator must be able to be as agile as OTTplayers. Whenever possible, we must also automate repetitiveoperation actions. It is important to be able to react rapidly andset up agile operation, with much shorter life-cycle management.This is made possible with cloud-native applications and astandard infrastructure design, allowing us to instantiate andoperate new versions of applications as necessary, for instanceon customer demands, for capacity reasons or for fine-tuning/correcting features. It also necessitates more automationwith the ability to develop operation policies. Such an approachwill also bring better quality and efficiency.

The push to ‘software-isation’ with the technical convergencebetween IT and network is ongoing. Our ambition is to listen toour customers’ needs and to be able to respond in an agile way.

Q: Orange cites OTT players as the biggest challengersto operators today. Do you think that telcos will everbe able to compete on a similar playing field to more nimbleOTT players, and if so, how?

RK: Telecom operators have to work both on physicalinfrastructure network (FTTH and 5G infrastructure with loweragility potential, but so important with the ‘last mile’ control)and network functions (higher agility potential). Telecomoperators must first be able to set up agile operation (use easyto modify cloud-native applications and set up nimble lifecycle management for example).

This is not sufficient as the whole organisation must beadapted and transformed to take advantage of agile operation(from business development approach, to marketing, todevelopment, to operations to customers: DevOps is one step).Processes need to be changed, and supporting BSS/OSS alsoneed to be changed. So it is not easy to be as agile as an OTT.For instance, DevOps is extensively used for our owndevelopments. But we also need to work with suppliers with asimilar DevOps approach to shorten lifecycle to less than onemonth. We also need to open our networks with APIs andwork in partnership with nimble third parties.

We are taking the opportunity of virtualisation to introduceagility everywhere and be able to compete with OTT’s on anequal footing and to take advantage of our last mile advantage.

Q: Can you explain some of the measures that Orange istaking to ensure that its network is able to meet thechanging demands of users in future?

RK: The main measure has been the launch of the ODN (OnDemand Network), programme about 18 months ago followingthe all-IP programme created in 2014. The ODN programmefederates all Orange initiatives with virtualisation (businessopportunities – B2C, B2B, wholesale, network managements;architecture and technical solutions; industrialisation anddeployments; HR and process transformation…). It coversbenefits such as digital online access, on-demand deploymentof services, high network customisation, try-and-buyexperience with pay per use, and resilient services. It startswith opportunist and pragmatic services. But it intends to beholistic. For instance, Orange aims at being ready for theintroduction of 5G, natively with a virtualised approach.

However, today the industrial ecosystem is not yet stabilised.ETSI MANO standards have many options and have not yetdelivered stage three. There are many Opensource initiatives,

Agile operation

FEATURE : IT TAKES AN ECOSYSTEM - OPEN ROADS | 2524 | FEATURE: IT TAKES AN ECOSYSTEM - OPEN ROADS

Mobile service businesses have enabled a powerful shift in theaccessibility and utility of the Internet, but they are strugglingto monetise that power. Years of intense competition hascommoditised their connectivity offerings. At the same time,the internet industry (OTT players, social network platformsand the like) continue to invest heavily in new businesses andplatforms which speed up innovation but add competitive andprice pressure to traditional mobile service businesses.Ironically, the more ubiquitous mobile internet service offeringsbecome, and the more essential they are for consumers andbusinesses, the quicker service revenue starts to erode.

As a result, digital communications service providers arecollectively struggling to find new ways to sustain compellingvalue propositions for their customers. Yet, service providersalso have an opportunity to evolve and become key influencersin digital ecosystems, instead of simple participants.Communications service providers can build new digitalecosystems which will generate new industry value andrevenue opportunities for all participants. Firms in otherindustries that collaborate with communications serviceproviders in this ecosystem will reap similar benefits.

The Open ROADS Community’s goal is to help service providersbecome value connectors in digital business ecosystems, and tohelp all other businesses enhance their digital business throughcollaboration with these value connectors. We believecommunications service providers will be the focal point wherecustomer experience data and insight is curated and delivered tomultiple brand owners and service providers, all with a universalview of each customer. The ability of communications serviceproviders to manage and curate these ultimate ecosystems ofbrands and relationships, which uniquely surround eachcustomer, is the key to the future success of all participants.

The Open ROADS Community creates and shares precise,actionable insights and tools for the benefit of all communitymembers. One of the first such tools we have developed isthe Open Digital Maturity Model (ODMM): a rigorousassessment tool that benchmarks the digital transformationprogress of the business and identifies the steps required toachieve the digital business aspirations. The ODMM includes 6dimensions which are Strategic Dynamism, Digital Culture &Skills, Optimal Customer Experience, Data Centricity, ServiceInnovation& Operational Excellence and Digital TechnologyLeadership. Enterprises need to approach their digitaltransformation initiatives by understanding where they canimprove their capabilities and processes—and what they needto do in order to make those changes successfully. The ODDMprovides carriers and other enterprises with a precise gauge

of where there digital businesses are, and how to close the gapbetween their present state and their aspirational one.

The Open ROADS Community is not an industry forum. It isnot a standards body. It does, however, rely heavily on theinsights, architectures and methodologies from these bodies;most of our Community members are also active, award-winning participants in several of them. Our collaborationswith industry groups become inputs into a holistic framework,which underpins the strategic thinking of the Community’sdigital transformation process.

We call this framework the Digital Master Mind: acomprehensive view of the ways our community addresses itsbusiness transformation challenges. See below: our approachemphasises the need for businesses to commit totransformation as a continuous process, constantly re-assessingtheir capabilities and goals against an ever-evolving industrylandscape. Service providers must define their businessaspirations clearly, using assessment tools and design thinking,and determine the gaps between these aspirations and theoperating capabilities they have now, and expect to build.

This framework, combined with the tools and sharedexperiences of the Community, will help digitalcommunications service providers to compete moreeffectively with new entrants to the ecosystem, such as OTTplayers and cloud service providers. We are creatingcollaborative platforms to build new digital services andbusiness models with all digital service industry participants,and all other companies that depend on digital channels togrow their businesses.

One such platform for doing so is the Omni-channelManagement Industry Alliance, a newly formed businessdomain within the Open ROADS Community. This team ofcross-industry peers are working to build a mature ecosystemfor omni-channel management, improving standards andarchitecture, practices and implementation references.

Participation in the Open ROADS Community will be a keycompetitive advantage for all digital communications serviceproviders, allowing them both to succeed in their traditionalservice markets, and to expand quickly and profitably intoadjacent digital business segments. Community membersfrom other industries will be able to enhance their digitalbusiness portfolios through this collaboration.

I invite you to join us, and help build the digital business futurein which we will all thrive.

INTRODUCING THE OPEN ROADS COMMUNITY

The communications services industry is in the midst of anunprecedented time of change. This is normal in our industry:regulatory framework shifts, new or different competitiveentrants, and of course new generations of technology regularlyforce market players to rethink their network operations andinvestment models. But the speed with which all these trendsare converging on the industry today is impacting growth formobile service providers in ways that can only be described, touse the industry’s most abused phrase, as disruptive.

In this rapidly evolving digital business world, ICT industryparticipants need to redefine themselves, and it is with thisbelief that the Open ROADS Community, initiated by HuaweiTechnologies, was launched in February 2016 at last year’sMobile World Congress. We have brought together dozens ofglobal telecom industry stakeholders to achieve our mission:to be the incubator for digital transformation. OurCommunity’s acronym stands for five tenets which define thedeep levels of personalization and quick service deliveryexpected by digital consumers today: Real-time, On-demand,All-online, Do-it-yourself, and Social.

THE OPEN ROADS AHEAD

Gartner estimates that 1.5 billion smartphones were sold globallyin 2016, and close to 2 billion will be sold in 2020. As theybecome more saturated and as growth slows, the world’s mobilenetworks will still have to accommodate 250 million newconnections annually for the next five years—and that is not evencounting the billions of sensors, telemetry signals, meters andother devices that will be wirelessly connected to the Internet of

Things. Yet even with this proliferation of users and smart and‘dumb’ connected devices, Gartner reckons that the world’smobile markets will barely manage 2.7% in annual revenuegrowth, from $882bn in 2016 to $981bn in 2020 (see chart).

IT TAKES ANECOSYSTEMCollaboration and community development are needed for successful digital transformation

Trevor Cheung,

COO and Secretary of the Advisory Board,

Open ROADS Community

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FEATURE : HUAWEI CLOUD OPEN LABS | 2726 | FEATURE: HUAWEI CLOUD OPEN LABS

In the SDN field, Huawei works with industry partners suchas Check Point, Fortinet, Marantis, Infoblox, Citrix, and F5,to provide value-added services via the enterpriseCloudVPN solution.

In the NFV field, Huawei works with industry partners such asVMware, the OpenStack community, Red Hat, Wind River, andUbuntu, to address challenges brought on by networkdecoupling. This facilitates large-scale NFV deployments andshortens the time-to-market for new services.

In the Cloud Data Center field, Huawei cooperates withindustry partners such as VMware, BMC, Accenture, Ovell,and Microsoft, to provide an end-to-end (E2E) cloudhosting solution.

It is also worth noting that the Open Platform for NFV(OPNFV) described Huawei's NFV Open Lab as one of theworld's standardized open-source labs. In addition, Huawei'sData Center Open Lab provides a lab environment for theOPEN-O community to collaborate on the development andtesting of open-source projects.

Huawei technical certificate criteria includes Compatible(product compatibility certification), Validated (compatibilitycertification with Huawei products and solutions), and Enabled(certification based on Huawei's technical platform). By mid-January 2017, Huawei issued certificates for more than 30partners covering fields such as security, load-balancing, WANacceleration, cloud platform, IoT etc.

HUAWEI VERIFIES ENTIRE OPERATOR NETWORKSTO PUT TESTED SOLUTIONS TO COMMERCIAL USE

Most operators are building regional and nationwide networks.To ensure that these networks can deliver the ROADSexperience, operators require a lab environment with adistributed structure, multiple vendors, multiple layers and across-domain network to simulate operations for pre-verification purposes.

Huawei has worked with over 40 partners in the Cloud OpenLabs, through which over 250 hardware products and 400versions of software have been introduced. This coversservices at the infrastructure, platform, and application layersand a number of leading-edge ICT technologies such as SDN,NFV, cloud data centers and Infrastructure Enabling Systems(IES), which proves that the Cloud Open Labs provides a labenvironment with multiple vendors, distributed structure, andcross-domain network.

Based on decades of involvement in the telecommunicationsfield, Huawei has developed an agile integration workflow andautomated verification system as well as pre-integration andpre-verification in readiness for the 2020 operator networktransformation. The Cloud Open Labs have providedintegration and verification services to more than 200 globaloperators in over 500 projects. Its pre-integration and pre-verification capabilities will effectively ensure the smoothevolution from traditional to All Cloud networks.

Huawei is currently cooperating with an operator from theMiddle East to transform its closed telecom network to a next-generation convergent ICT infrastructure. By simulating theoperator's nationwide networks and testing new technologies

and network structures at the Huawei Cloud Open Labs, it hashelped the operator change its traditional labor-intensive,error-prone and time-consuming service delivery methods andlaunched new services for consumers and enterprises, withquick response times at low costs.

INNOVATION HELPING OPERATORS DESIGN NEWSERVICES TO CREATE NEW PROFIT POINTS

During the period of ICT convergence, customer requirementschange rapidly and new business opportunities emerge.Operators need to be committed to creating innovativetechnology, operating models, and services that will meetcustomer requirements.

Huawei Cloud Open Labs provide alpha and betaenvironments to meet the innovative needs of operators andpartners. The Cloud Open Labs environment helps operatorsrapidly innovate new services through agile iterativedevelopment and verification. To be specific, during alphatesting, Huawei provides micro services on its Platform-as-a-Service (PaaS) platform, builds service-based APIs,establishes development and test environments, and designsprototype solutions, allowing for fast service rollout. Afterthe pre-integration tests, these prototype solutions arerapidly deployed to the beta test environments, ensuring 1to N replication.

Huawei proactively works with operators, industryorganizations, partners, OTT businesses, and developers onjoint innovation initiatives and has designed a series ofsolutions such as CloudVPN, Cloud VoLTE, Smart Home,smart meters, enterprise mobile data management, andgovernment & enterprise cloud computing. Huawei will alwaysstrive to bring profits to operators and users and steerindustry development.

Operator H in Hong Kong is hindered by slow serviceprovisioning and limited service control. Huawei partneredwith operator H, utilizing Cloud Open Labs, to improve theircompetitive edge by accelerating service provisioning by 90%and developing innovative and intelligent services such asautomatic data quota control, shared policies, black and whitewebsite list management, and automatic bill classification.

In this volatile ICT era, how can operators seize new serviceopportunities that will continue expanding their businesses?An effective way to do so is to deliver the ROADS experience,which means re-designing operations and infrastructurethrough digital technologies.

However, these digital technologies have brought about aseries of challenges. One, for example, is that different vendorsuse different interfaces under hierarchical decoupling. Anotheris that operators have to deal with the uncertainty of theeffects brought by the transformation. And a third example isthat operators are unable to verify the best solution for a quicklaunch while ensuring the service quality after transformation.

HUAWEI CLOUD OPEN LABS FACILITATE DIGITALTRANSFORMATION

Since establishing the Cloud Open Labs, Huawei has gatheredstrength from various fields, continuously developing multi-vendor solution integration and verification, accelerating theoperations transformation and infrastructure reconstruction tosupport operators during their digital transformation.

Huawei Cloud Open Labs are composed of four labs in fourdifferent locations: the GNEEC Global Network Evolution andExperience Centers in Beijing and Shenzhen; the NFV OpenLab in Xi'an; the SDN Open Lab also in Beijing; and the DCOpen Lab in Langfang. Through the use of these extensivefacilities, Huawei Cloud Open Labs can simulate an operator'sentire network and experience first-hand what it would taketo transform their future networks.

Huawei Cloud Open Labs' main functions are:

HUAWEI JOINS MULTIPLE VENDORS TO ESTABLISHAN OPEN ECOSYSTEM

The open cloud network architecture has brought about aseries of changes in standards, interfaces, vendors, businessmodels, and purchasing practices. Vendors need to unite tobuild an open ecosystem on an open and standard platform.In the face of all these challenges, Huawei proposed thepartner plan and Huawei technical certification standards. TheCloud Open Labs cooperate with upstream and downstreampartners, issue certificates for its partners, and attract morepartnerships to build joint solutions and industry ecosystems,helping to accelerate the move towards industry maturity.

TURNING YOURBUSINESS VISIONINTO DELIVERABLESHUAWEI CLOUD OPEN LABS

“Huawei Cloud OpenLabs provide alpha andbeta environments tomeet the innovativeneeds of operators and

partners.”

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TRANSFORMINGTOWARDS

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