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Wire & Cable ASIA – May/June 2016
Telecomnews
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
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 (25th 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
employing 1,200 people in Europe
alone. At the mobile technology event,
held in Barcelona, Spain, 22nd to 25th
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.
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,” 22nd 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
(8th 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 BigStockPhoto.com • Photographer: Krishnacreations