Author: Yao Xiangxiang, Marketing Dept Director, Carrier Network BG, Huawei Eurasia
The pandemic has posed challenges to global social governance, but it has also accelerated the digitization of various industries. With the introduction of new technologies such as 5G, AI, cloud, and edge computing, digital transformation is penetrating into various industries while becoming more intelligent. Both policy makers and telecom operators are launching constructive mid- and long-term digital plans.
The major economies around the world are rapidly releasing their digital transformation strategies. Back in 2020, China launched the New Infrastructure strategy, which centers around 5G, data center, AI, and industrial Internet. On March 9, 2021, the EU released the 2030 Digital Compass as a guideline for digital transformation in the next decade. It includes 11 specific targets, including network connectivity, edge computing, digital technology penetration, and ICT experts. In January 2021, the 10 member states of the Association of Southeast Asian Nations (ASEAN) proposed the ASEAN Digital Master Plan 2025, which covers various aspects such as anti-pandemic technologies, national broadband development, and trusted digital services. Meanwhile, leading operators are starting to consider business strategy transformation up to the year 2025, both to respond to the pandemic and to satisfy their own digital needs. For example, Orange released the Engage 2025 strategy to reshape the operator model through leading networks. Vodafone released its Tech 2025 strategy in 2020, positioning itself as a leader in communications technologies and enabler of the digital society. China Mobile’s 2025-oriented network planning serves new business strategies, such as 5GtoB and cloud. As cloud and network converge with each other at a faster rate, Verizon proposes the concept of “network as a service”, Deutsche Telekom proposes the “network of networks”, and China Mobile emphasizes intelligent networks and cloud-network integration.
As a witness and promoter of digital transformation, Huawei has gained deep insights into digital trends in the global telecommunications industry and conducted strategic discussions with global leading network operators. Based on business factors and technological advancement, Huawei launched the NetX2025-GUIDE model at the beginning of this year to provide a reference architecture of 2025 target networks for global operators. The GUIDE model also resonated widely with operators at the MWC Barcelona 2021.
GUIDE is the initials of the features of future target network: Gigabit Anywhere, Ultra-automation, Intelligent Multi-Cloud Connection, Differentiated Experience, and Environment Harmony.
G for Gigabit Anywhere: User is the basis of everything. Consumers are becoming more and more critical about gaming and video experience, and leading countries have started to offer AR/VR services on a large scale. The pandemic has made home the center of work and entertainment. AR/VR and machine vision are being integrated into industrial manufacturing processes. The ability of gigabit connectivity is becoming a basic requirement.
U for Ultra-Automation: Enables intelligent O&M as well as precise and fast marketing. Efficiency will become one of the core competitive strengths in future-oriented business. Internally, operators need to introduce big data and AI to simplify O&M of increasingly complex networks. Externally, to maximize network value, fast product GTM is required to shorten the time to market (TTM) and lock users precisely.
I for Intelligent Multi-Cloud Connection: It is a core advantage for operators to develop cloud services. Enterprise cloudification is accelerating. According to the Right Scale survey, 84% of large enterprises and 61% of small and medium-sized enterprises adopt the multi-cloud strategy. Multi-cloud adoption has become a basic requirement for enterprises. Enterprises expect high-quality cloud access networks to meet the requirements for rapid multi-cloud migration of IT systems. In addition, they expect one link can reach multiple cloud vendors to optimize costs. Purchasing cloud-based networks are expected to achieve e-commerce experience like purchasing cloud services. In Russia, where there are many cloud players, cloud-network synergy will enable operators to stand out from competition.
D for Differentiated Experience: It is the key to the business success of the target network. It is not just consumers who need reliable video, gaming, online office, and education experiences. Practice has proved that differentiated experience can bring business premiums in 2B services. For example, in the government and enterprise market, stock exchanges are willing to pay 10 times the rent to reduce the latency by 1 ms. For operators, differentiated experience is about providing “best-effort experience and deterministic experience”. Value-based operations will bring new dividends to operators.
E for Environment Harmony: Helps operators reduce O&M expenses and achieve ESG targets. By applying new products and technologies to devices, energy, network deployment, data centers, operations, and applications, promote energy conservation and emission reduction and contribute to green development.
In terms of global GDP rankings in 2020, Russia ranked 11th, and the top 10 economies have all deployed 5G for commercial use. Although Russia’s 5G network cannot be deployed on a large scale in the short term, a GSMA research report in 2020 shows that the willingness among Russian citizens to upgrade to 5G is higher than in most of the top economies, second only to China and South Korea. At the same time, Russia’s fixed broadband market is developing rapidly. FTTH has become the main driving force of market growth, 100 Mbit/s broadband has become the mainstream, and gigabit services have emerged in top cities. How to seize these opportunities is key to improving core competitiveness. We believe that Russian operators can do much more in providing differentiated user experience. The digitalization of various industries in Russia is also accelerating under the national digital economy strategy. The market space of enterprise cloudification is growing at a rate of more than 20%. Traditional industries such as mining, oil and gas, and steel manufacturing are accelerating their exploration of 5G-based industry applications. Enterprise cloudification, as well as digitalization driven by 5G and AI, will also become operators’ biggest engines of 2B business growth. Through the NetX2025 GUIDE model, we hope to work with operators to discuss the optimal architecture and path of the future target network and pursue business success together.