Building the NBN for National ICTJuly 19th 2016. Pretoria

Nigel Bruin

e: nigel.bruin@huawei.com

linkedin.com/in/nigelbruin

2

1st

3rd

2nd

Mechanization

Electrification

Automation

Internet of

Things

Industry applications based on Big Data

4thIntelligentization

+

Data Algorithm

Broadband = socio-economic development

1. Global Trend a

3

Fast-changing world

Electric EconomyConnected Cars Smart Vehicles

Autonomous vehicles

worth £51 billion / year

in social & economic

value by 2030

Jan – Mar 2016, 30%

of new cellular

connections were

cars

April 2016, Japan has

more electric

charging stations

than petrol stations

1. Global Trend b

Business Models

During Jan – Jun

2016, Uber completed

1billion rides

4

Connect 2020: Drive households BB fast-growing Households: 779M connected, 992M unconnected

10.7%

36.3%

40.3%

60.1%

60.0%

82.1%

6.7%

34.1%

46.4%

81.3%

Africa

APAC

Arab States

CIS

The Americas

Europe

LDCs

Developing

World

Developed

Percentage of households with Internet access

60%households

90%

rural

population

30%

ITU:

Connect 2020

Decrease

CO2

More than 300M households will be connected by 2020

148Countries with National Broadband Plans

About 1B Households are Unconnected

2. Connectivity Status

5

Africa

Internet in Africa: Demand vs. Supply

82.1

60

60.1

40.3

39

10.7

81.3

46.4

34.1

6.7

Europe

Americas

CIS

Arab States

Asia Pac.

Africa

Developed

World

Developing

LDCs

77.6

66

59.9

37

36.9

20.7

82.2

43.4

35.3

9.5

3. Connectivity in Africa

29.6

18

13.6

3.7

8.9

0.5

29

10.8

7.1

0.5

People using the Internet (%) Fixed BB Subscriptions (per 100 ppl)Households with Internet Access (%)

6

Africa’s generation opportunity

Voice Web Video

Connected Cars

Massive IoT

AR/VR

150Mbps

1Gbps

10Gbps

50ms

10ms

High Speed

Railway

Tele-operation

1ms

100B

30B

School

Hospital

Home

1 Gbps FTTH 10 Gbps FTTH TWDM PONADSLDial Up

2G 3G

4G

4.5G5G

4. Africa can skip technology

0 1

Deploy latest

gigabit access

7

5. Broadband as utility

Broadband embedded into National Strategies…

Verticals

+ Internet

Entertainment

Industry &

Manufacturing

Transportation

Banking

& Finance

e-Commerce

& Retail

Agriculture Smart Grid

Health

Education

Restaurant

&Travel

Internetization

42

85*

47

72

USA：Advanced Manufacturing

Brazil: “Branden Info Tech”Plan

China: National Broadband

Korea: K-ICT

MalaysiaSmart Country

44

71

Germany/EU: DAE2020

Nigeria: National Broadband Strategy

31

* Figures from GCI 2015 ( Global Connection Index)

ITU 2020 Target100%

50%

60%

40%

-- Infonetics Research

1Gbps

50Mbps (Common Cities)

(Developed Cities)1Gbps(50%)100Mbps

(VDF/etc.)

Giga Access Plan

Digital Europe 2020 China NBN 2020

National broadband plan or strategy

Households in developing world

Internet penetration in developing world

of the respondents plan to offer Gbps broadband access by

2017

8

Job Creation

10% increase in digitization

unemployment rate decrease 0.8%

Environmental

BB reduces greenhouse gas

emissions 5%

Reduce energy consumption and

business travel costs

GDP growth

For every 10% increase in digitization

GDP per capita increase by 0.6%

Better Lifestyle

Every 10% increase in digitization

Better Life Index increased 1.29%

National Competitiveness

For every 10% increase in digitization,

innovation index increases 6.4%

Smart

ICT

Source: Huawei Consulting Analysis

Pressure to build the Digital Economy

6. NBN benefits to economy, life

9

e-Public Services

Government

Convenient

e-Government

NBN Network e-Tourism

Government Hotline

e-Registration

Department Collaboration

Public Security

e-Educatione-Payment

e-Customs

e-Park

Emergency Command

Smart Traffic

Document Exchange Management

Civilian Service

Government e-Portal

e-Healthe-Taxation

e-Licensing

6. NBN benefits to economy, life

10

7. Government to lead NBN. High cost

Friendly Policy &

Regulations

Infrastructure

Synergy

Innovative

Tools & Solutions

£1.2B subsidy for rural BB

"Fiber from the home"20% Cost Saved

"From Burial to Aerial"

14% ODN CAPEX Saved

Road

Railway

Crude oil

Natural gas

Electricity

Motorway

8000 km Fiber Network

Product InnovationMini OLT, Dual mode ONT…

Engineering InnovationMicro-trench, Fibre Blown…

Management InnovationStandard Operating Procedure,

Subcontractor Training…

"Telco first“ as ICT new Target, break LLU in 76 cities

Investment

Stimulation

Cost

Reduction

Egypt

Grant new fixed licenseActivate stagnant market

Poland

Government Leadership

UK

China

Spain

11

Foundation

A

R

P

U

Values

Revenue Growth Engines & Key Concerns

8. Revenue growth engines & key concerns

2. Cloud 3.IoT

MBB

FBB Voice + Data>>>

Smart HomeSmart City

Experience

Cost

Concerns

Partnerships

12

CO ONT

Homes Connected

High Cost of Civil Works

FDT / Closure

Low Efficiency = Labor Cost

DP

Source: XXX FTTH project in Africa, 456USD / HP

Operator “T”

Only 6% HC Success Rate

Hard to enter the home

Lack of technician & useful tools

Non-standard Engineering Procedures

Homes Passed

9. Cost is key for deeper penetration (option a)

Managing costs is key to greater take-up

62.6%

26.0%

11.4%

Civil Works Project Management Materials

13

3~4km 2~3km

Low Density

Last Mile Rental

Land Privately Owned

Engineering Installation

Challenges to finish the last fibre mile

10. Challenge to finish the last mile

Rural / Semi-rural Scenarios

30

90

180

xDSL FTTx/VD FTTH

(days)

Time to DeployCommercial Viability of Coverage by Technology

Ne

t P

rese

nt V

alu

e (

NP

V)

(Eu

ros*0

00)

LTE FirstFTTx First

0% 20% 40% 60% 80% 100%

Population Coverage

Cost to Deploy

FTTH FTTC

LTE

Government

Stimulus Point

14

Rural

Sub-urban

Dense Urban

Data Source: ITU

（Household

Density）

38.3% 36% 35% 26% 23.5% 14.4% 11.5% 11% 10% 4.5% 4% 2.6% 1.4% 1.3% 1.2% 1.1% 0.4% 0.2%Norway Germany Canada Australia Italy China UAE Brazil Saudi Oman Algeria Sri Lanka Kuwait Philippines Indonesia India Cote d’lvoire Nigeria

Speed Up Subs Increase

Fast TTMShorten ROI

WTTx & FBB = Broadband Development

11. WTTx + FTTx = Broadband development

Philippine Globe: WTTx+ MBB CMCC Jilin: WTTx + MBB Canada Xplornet:WTTx in Rural Etisalat : FTTx + WTTx

Brazil SkyTv: WTTx for MSO Nigeria Swift: WTTx for ISP Greece Intracom: WTTx NBN Saudi STC: 4.5G in WTTx

Many Reference Cases

15

Policies: 6 proven ways to develop NBN

FAVOURED PPP MODEL

Attract Private Sector

Participation

STATE FUNDED SUBSIDY

Financial Subsidy on CAPEX

Investment.

Digital divide.

DEMAND STIMULUS

MEASURES

Promote Broadband Utilization

ENCOURAGE COST

REDUCTION

Network Sharing,

CLEAR BROADBAND

POLICIES

Guiding broadband Objectives

and NBN Rollout Plan

MANDATE OPEN ACCESS

State intervention to Promote

Competition

12. Policies. 6 proven ways to develop

Copyright©2016 Huawei Technologies Co., Ltd. All Rights Reserved.

The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results,

future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those

expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an

acceptance. Huawei may change the information at any time without notice.

Nigel Bruin

e: nigel.bruin@huawei.com

linkedin.com/in/nigelbruin