WCA May 2016

Telecom news

As Huawei understands the IoT opportunity, serving “smart cities” entails connectivity, infrastructure, content and applications. As part of its strategy to extend its influence more widely across Europe, the company intends to furnish this end-to-end support from centres in at least three new “connected cities” – probably London, Madrid and Berlin. (“Huawei Sets Out Third Stage of European Strategy,” 22 nd February). A challenge for Europe’s technology sector, in Mr Peng’s view, is a relatively narrow scope. When Huawei launched its Honor smartphone range, an online-only brand, it found that the only means open to it for promoting and selling the devices was through such USA media as Amazon, Facebook, Instagram and Twitter. Ø “Europe has a lot of good companies but the environment is not good for them to scale up,” Mr Peng told the Financial Times . “We need to work together to have a strong player not just in Europe but the world.” In Barcelona in February, signs were strong that Huawei’s president for Europe had in mind the very player for the position. Elsewhere in telecom . . . Ø The technology research firm Gartner has forecast that, by the end of this year, 82 per cent of mobile phones shipped worldwide will be smartphones, up 12 per cent from 2015. The market research firm expects mobile phone ship- ments overall to increase 2.6 per cent this year. Gartner (Stamford, Connecticut, USA) looks for worldwide combined shipments of devices (mobile phones, PCs, tablets and ultramobiles) to reach 2.4 billion units in 2016, an increase of only 1.9 per cent from 2015; while end-user spending is expected to decline for the first time, by 0.5 per cent. Ø RCR Wireless News reported (8 th February) that the Republic of Korea has decided against awarding a fourth mobile carrier licence, rejecting the three candidates Sejong Telecom, K Mobile and Quantum Mobile. The government had been considering adding a new player since 2010, on grounds that the

The McKinsey Global Institute, the Washington-based research arm of consultants McKinsey & Co, ranked 139 countries by how linked-in they are to the rest of the world. At the top is Singapore, which has successfully made itself into a regional centre in Asia; followed by the Netherlands, one of Europe’s main digital hubs; the United States; and Germany. China comes seventh. The 144-page McKinsey report “Digital Globalization: the New Era of Global Flows” finds a strong correlation between connectedness and gross domestic product. It asserts, “Remarkably, digital flows – which were practically non-existent just 15 years ago – now exert a larger impact on GDP growth than the centuries-old trade in goods.” Noting that virtually every type of cross-border transaction now has a digital component, McKinsey said that the amount of cross-border bandwidth has grown 45 times larger since 2005; and in the next five years it is projected to increase an additional nine times over. The company estimates that the world economy as a whole benefitted from cross-border data flows to the tune of about $7.8 trillion in 2014. Transmitting information and facilitating finance, these data flows also enabled the movement of goods, services and people. McKinsey sees people as a major factor in connectedness and national economic health. Japan, the world’s third-largest economy with a host of global brands, ranks surprisingly low, at No. 24, in connectedness. According to McKinsey this is mainly due to the limits it places on immigration. Ø Reviewing the McKinsey report for BloombergBusiness (25 th February), Rich Miller noted its rejection of the idea that globalisation is dead, as construed from the collapse of capital flows around the world after a peak close to $12 trillion in 2007, before the financial crisis. Rather, he sees the explosion of data transmission as filling that void, observing that half of Facebook users had at least one international friend in 2015, up from just 16 per cent in 2012. “And it’s more than just sharing cute cat videos,” wrote Mr Miller. Facebook estimates that 50 million small- and medium-sized enterprises are on its platform, roughly double the total for 2013. McKinsey said in its report that, on average, 30 per cent of those entities’ “friends” are from other countries. With ‘digital globalisation’, flows of data and information now generate more economic value than the global goods trade

Europe has lost none of its lustre for the Chinese telecom equipment and services provider Huawei “European countries are the most open to new things and challenges. It’s open, honest, transparent to Huawei, which we like a lot.” From this and other remarks to Daniel Thomas of the Financial Times (London) on the eve of this year’s Mobile World Congress, Vincent Peng, Huawei’s European president, made plain that Europe still exerts a strong pull on his company. And after a decade of meteoric growth, it is well positioned for its next steps on the continent. As noted by Mr Thomas, Huawei is now on a par with the world’s largest telecom equipment supplier, Sweden’s Ericsson, and has become the third-largest smartphone vendor in the world, with seven R&D centres

employing 1,200 people in Europe alone. At the mobile technology event, held in Barcelona, Spain, 22 nd to 25 th February, Huawei occupied half of an enormous hangar to showcase its latest network services and products. Yet Mr Peng said more can be done in Europe. In consumer mobile, for example, he acknowledged that Huawei was still “second tier,” with quite a big gap compared to tier one. He told Mr Thomas: “That is what we are working on.” But not solely. Huawei’s plans for its network building division, which accounts for some 70 per cent of the company’s sales, are especially detailed. Mr Peng wants to work with European technology groups to develop suites of services and applications that will enable connected homes and cities – the Internet of Things that has become a focus for every ambitious company in the telecom sector.

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Wire & Cable ASIA – May/June 2016