Transcript 2006 Huawei Presentation

To Enrich Life
Through Communication
Corporate Presentation
HUAWEI TECHNOLOGIES
To Enrich Life Through Communication
Huawei Cooperation Review
Industry Transformation
Huawei’s Preparation
Huawei’s Value Proposition – with Telcos
2
www.huawei.com
2
Huawei Technologies
To Enrich Life Through Communication
An innovative and customer-oriented ICT company
established in 1988 and fully owned by its staff.

Over 35,000 staff members (over 48% engaged in R&D);
more than 10% annual revenue invested in R&D.

Full product portfolio including wireless products,
network products, application and software products and
terminals.

A leading global supplier with products deployed in over
100 countries, including the US, the UK, France, Portugal,
Russia, Brazil, Singapore and Thailand, and serving 28 of
the world’s top 50 operators.

Contract sales amounted to US$8.2 billion in 2005. over
58% of which (US$4.8 billion) was from international
markets.
www.huawei.com
3
Continuous Growth
To Enrich Life Through Communication

Serving 28 of the world’s top 50 operators

Strategic partner with BT, Vodafone, Telefonica, etc.
Contract Sales 9
（USD1 billion）
8.2
8
7
5.58
6
5
3.83
4
3
2.67
2
4
1
0
2002
www.huawei.com
2003
2004
2005
Financial Performance
To Enrich Life Through Communication
USD in millions
Year ended December 31
2004
2003
2002
2001
2000
Revenue
3,827
2,694
2,128
2,290
1,933
Net Income
624
384
108
258
345
Cash Flow From Operations
396
385
311
204
255
R&D Expenditure
487
389
355
342
180
Return on Net Assets
31%
23%
7%
20%
47%
Revenue amounted to US$6,400 million in 2005
5
Notes: All financial data listed prior to 2005 are audited by KPMG.
www.huawei.com
Human Resources
To Enrich Life Through Communication
R&D:48%
48%
38%
Marketing, Sales and
Customer Service : 38%
6% 8%
Administration: 6%
Supply Chain: 8%
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
Total staff: Over 35,000 employees
www.huawei.com
Global Presence
To Enrich Life Through Communication
Huawei Technologies
(Headquarters)
Sweden
Russia
Netherlands
Poland
Germany
France
Ukraine
Romania
Kazakhstan
Bulgaria
Portugal
Kyrgyzstan
Spain Italy
Turkey
Uzbekistan
Greece
Tunisia
Turkmenistan
South Korea
Morocco
Bangladesh
Algeria Egypt
Pakistan
Shenzhen
Nepal
UAE
Vietnam
Saudi
India
Thailand
Philippines
Arabia
Nigeria
Cambodia
Malaysia
Sri Lanka
Kenya
Singapore
UK
Canada
USA
Mexico
Venezuela
Colombia
Ecuador
Indonesia
Peru
Brazil
Zimbabwe
Australia
South Africa
Chile
Argentina
 8 regional headquarters, 85 branch offices outside China
 3-level customer service system (HQ, regional, local)
www.huawei.com
7
Management Transformation
To Enrich Life Through Communication
Huawei works with top management consultancies to bring world-class expertise to the company,
provides customer end-to-end delivery with high quality .
consulting
Integrated Product Development and
Integrated Supply Chain
Human Resources & ESOP
Financial Management
consulting
Quality Control
Organization Transformation
www.huawei.com
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Full Audit by Key Operators
To Enrich Life Through Communication
Strategic Partnership Selection
•
•
www.huawei.com
Auditing Concern Areas
–
Management Systems
–
Environmental
–
Sourcing with Human Dignity
–
Project Management
–
Product Realisation
–
Policy Strategy and Planning
–
People
–
Relationship Management
–
Facilities
–
Capacity
–
Risk Management
Qualification ( Auditing) Philosophy
–
Strategy and Policy
–
Process supporting
–
Process Implementation
–
Quality Control
–
Continuous Improvement
–
Thought Leadership
Completed Auditing Overview

Motorola(2000-2003)

BT (2003-2005)

FT(2004)

Vodafone(2005)

O2 (2004)

Cable and Wireless(2005)

DT(2005)
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Global R&D
To Enrich Life Through Communication
Adopts asynchronous development, unifies product commercialization and
speeds up response to market.
 Global R&D
Stockholm, Sweden
algorithms
Dallas, USA
Bangalore, India
Moscow, Russia
Shenzhen, China
Shanghai, China
Beijing, China
Nanjing, China
－Base Station architecture and system
design, Radio technology and RAN
－ASIC technology and CDMA algorithms
－Software technology/platform
－Algorithms and RF
－CN, service platforms
－RAN, terminals, ASIC chipsets
－Packet CN, GW, Terminals
－BOSS, 3G services
 CMM5 and IPD (Integrated Product Development) have been widely
implemented into product development.
 Four R&D divisions (Central software division and institutes in
Bangalore, Shanghai and Nanjing) have been awarded CMM level 5
certification.
www.huawei.com
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R&D Based on a Shared Platform
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Constructing a “speed, quality and cost” advantage, through modular
structure, standardization and sharing technology (CBB methodology).
Uniform operation and maintenance platform
IP+Optical
platform
Fixed
access
platform
Wireless
access
platform
Service
control
platform
Intelligent
network
platform
Terminal
service
platform
Common software and hardware platform
Uniform engineering and material development platform
www.huawei.com
11
Standards and Patents
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Persistent investment in standards and patents to be at the forefront
of future technology.

Standards


Participated in 70 international standardization organizations including ITU, 3GPP.
Patents
Domestic Patents
9600 pcs
PCT International
and Overseas Patents
1574 pcs
Authorized Patents
1844 pcs
 5% of international UMTS essential patents (69 patents), No.5 of global telecom
companies
（Till 31 Dec. 2005）
www.huawei.com
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Huawei E2E Delivery Process Overview
To Enrich Life Through Communication
Research,
standard, patent
Technology
roadmaps
Within C2C framework, e2e delivery focuses on
customer commitment to committed delivery
Narrow e2e delivery
Brand mgt
MM
Dev
Understa Perform Portfolio
Bus
nd MarketSegmentationAnalysis
Plans
Align &
Optimize
Broad e2e delivery
Manage &
Assess Perf
IPD
C
u
s
T
O
m
e
r
Conc
ept
Plan
Deve Qual
lop ify
Launc
h
Life
Cycle
OR
issues
Req mgt
CS
Sales mgt
CRM
Relationship
mgt
- Relationship mgt
- Buz partner mgt
Ad/trade show mgt
- Info mgt
req
NPI
- win
- leadership team
- drive sales exection
Sales execution
Solution
Opportunity
design
point mgt
- Resource
allocation
-Customer sat mgt
-Market req
- Market forecast
- Offering info
Engineering
implement
TS
Supply chain plan
Contract
signature
pro
mfg
Partner and supplier mgmt
FIN / HR / IT
www.huawei.com
ISC
logistics
Spare
parts mgt
training
C
u
s
T
O
m
e
r
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Global Supply Chain and Logistics System
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Beto -Huawei, Russia
Amsterdam, Holland
HeBei, China
Cairo Factory, Egypt
Dubai
Shenzhen Headquarter, China
Brazil-Huawei, Brazil







Shenzhen manufacturing and logistic center—supplies globally.
Hangzhou factory manufacture data-com—low level products .
Brazil factory—supplies to Latin America.
Beto-Huawei—supplies to Russia and Eastern Europe.
Hub in Holland—supplies to Europe.
Hebei manufacturing center—supplies to northern China and Russia.
Dubai logistics center—supplies to middle Asia and Africa.
www.huawei.com
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Supply Chain Processes Overview
To Enrich Life Through Communication
PLAN
Suppliers
ORDER
Market Product
SOURCE
Source Product
MAKE
Make Product
DELIVER
Enable Source
Enable Make
Enable Deliver
RETURN
Huawei
Deliver Product
Customers
Enable Plan
Plan Supply Chain
RETURN
 Customer-oriented, process-based, building partnerships and sharing information
 Integrated high-efficiency and open supply chain with advanced IT tools
www.huawei.com
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Global IT System
To Enrich Life Through Communication
Info
Securit
y
Infrastr
ucture
OA Support Video/Call
Facility & Conference
Service
Service
Certification
Center
Directory
Service
Message Call
Service Cent
er
Proxy
Web Sever, Common Web Sever+Apps Sever, Common Apps Sever
DB Sever
Common DB Sever
Data Center
Partners’ Network
Internet
www.huawei.com
Exabyte/Veritus
Backup System
Disaster Recovery Center
International Network
DMZ
SAN Storage
System
Backbone
Network
Local Network
WAN
Campus LAN,
LAN
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Industry Position
To Enrich Life Through Communication

3G
World-leading wireless network supplier, 18 commercial UMTS networks

NGN
No.1 in global VoIP market (Dittberner)

Intelligent Network
No. 1 in global market (21.6% of users)（Ovum）

Optical Network
No.1 in global LH+MR DWDM market (Ovum-RHK)

Access Network
No.1 in global IP DSLAM market (Infonetics)
No.1 in global MSAN market in 1H05 (Infonetics)

Data Communication
No.3 in worldwide service provider routers (Gartner)
www.huawei.com
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Vision and Mission
To Enrich Life Through Communication
VISION
To enrich life through communication
MISSION
To focus on our customers’ challenges and needs by
providing excellent communications network
solutions and services in order to consistently create
maximum value for customers.
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w ww. h u a wei . com
www.huawei.com
Development Strategy
To Enrich Life Through Communication
 Serving our customers is the only reason Huawei exists; Customer
demand is the fundamental driving force of our development.
 High quality, excellent service, low operating costs, and giving top
priority to meeting customer requirements to enhance their
competitiveness and profitability.
 Continuously performing management transformation to realize
efficient process-based organization operation for ensuring high
quality end-to-end delivery.
 Developing with our peers in the industry as both competitors and
partners to jointly create a favorable environment and share the
benefits of the value chain.
www.huawei.com
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Social Responsibility
To Enrich Life Through Communication
Fulfilling our social responsibility as a responsible corporate citizen

A dedicated member of the United Nations Global Compact

December 2004 Tsunami: Donated 2.42 million USD worth
of telecom equipment and an additional 2.42 million USD in
cash from the company and its employees

August 1998 Flood (China): Donated US$3.7 million worth
of equipment, and US$1.85 million in cash schools.
 Education Fund: Donated US$3.09 million to set up a fund to
help needy students complete an undergraduate education.
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www.huawei.com
To Enrich Life Through Communication
Huawei Cooperation Review
Industry Transformation
Huawei’s Preparation
Huawei’s Value Proposition – with Telcos
21
www.huawei.com
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Business Operation Models Face Transformation
To Enrich Life Through Communication
How should operators and equipment suppliers adapt to a more customerfocused business operation model?
Service-focused
Network-focused

Network layout

Technology updates

Homogeneous services

Service quality
Customer-focused
Service provisioning

Converged network
capability

Converged services

Service marketing

Industry chain re-

Customer increase

ARPU

structuring

Integrated
information services
80s－mid and late 90s
www.huawei.com
Mid and late 90s－
early 21st century
21st century
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Cross-industry Penetration and Intensifying Competition
To Enrich Life Through Communication
Carriers compete on a broader scale

Expanding into the IT service field to create value for business users

Expanding into content & entertainment and other fields to create value for end users
Applications
IT
Infrastructure
Mobile
Fixed Voice/Data
Content,
Entertainment
Broadband
Internet
www.huawei.com
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Change of Revenue Structure
To Enrich Life Through Communication
Diverse contents & services and their short lifecycle makes time-to-market
critical.
$
Content services
for consumers
Voice（Including mobile）
1980
www.huawei.com
Voice operation
2002
Transformation
IT services for
business users
2010 Non-voice operation
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Value Chain Transformation
To Enrich Life Through Communication
Value distribution is shifting toward terminal and business service. The
“carrier + equipment supplier”- focused value chain is meeting serious
challenges.
Value
Terminal
Service provider
Carrier
Equipment supplier
Terminal
Service provider
Carrier
Equipment supplier
Future telecom
value chain
distributing
Forepassed
telecom value
chain distributing
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www.huawei.com
To Enrich Life Through Communication
Huawei Cooperation Review
Industry Transformation
Huawei’s Preparation
Huawei’s Value Proposition – with Telcos
26
www.huawei.com
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Customer need quickly addressed through product roadmap.
To Enrich Life Through Communication
Marketing organization has shifted to the frontier, which:
allows customer needs to be quickly transferred into a product roadmap through CCM (customer
commitment management).
ensures rapid roll-out of new products and services.
Analyze and
validate
Collect
Customer
Marketing
Follow-up and
carry out
www.huawei.com
Taken into product
roadmap
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Customer requirement oriented: Understand customer’s
real requirements
To Enrich Life Through Communication
At the time of products, sales dominate; while at the time of solutions, especially
non-voice service, consulting, solution + business model are the main marketing
methods. The conformance of the strategy and the vision to the customers’
expectation decides their loyalty to the products. Customer requirements are the
strategy and vision, which reflect the future market.
Global
Global
Vendor
Carrier
Score
1031
Solution Marketing Capability
90
High Vision
Marketing
Capability
Customer Expectation
70
60
Middle Vision Corporate
capability and
Corporate potentiality
Low Visioncapability and
potentiality
Corporate
capability and
Sales capability
potentiality
Vendor Vendor Vendor
1
2
3
Competency among vendors
www.huawei.com
Vendor
n
Global
Market
China
branc
h
following
Huawei
Local
carrier
The customer in the previously called
customer requirement oriented is always
local customer according to our lesson
learnt in NGN. We are actually five levels
behind global requirements.
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Consultancy-style Marketing
To Enrich Life Through Communication
Improving wide-ranging service capabilities and supporting operators to
expand to the two ends of the value chain






Service consultancy
Network layout & design
Network optimization &
capability management


Network
aggregation
Joint marketing
Professional
service
Technology and business plans &
cooperative business expansion
Network layout & solution design
Cooperation process integration
Pre-sales
cooperation
solution
design

Outsourcing
maintenance

Maintenance of special fields and
3-level maintenance
Design management and capability
management
Customer



Content
trusteeship &
solution
application
Application
Database or content
Mobile equipment management
Management
operation

construction, operation
and maintenance
Management
capability
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

www.huawei.com
Specialized management operation contract
General design, construction, operation
and maintenance
Experience-oriented Marketing
To Enrich Life Through Communication
Creating experience-based environment for end-users and establishing
open lab for ISPs/ICPs to attain value from end-users.
Terminal Producer
SP/CP
Operator
Huawei inTouch Lab
Operation
R&D
Terminal Producer
SP/CP
Operator
Engineering Brand
Cooperation
Application/content
Long-distance
Service
Verification
VCOL
Terminal IOT
Integration
support
Verification
Verification
AP(1-N)
Application
layout
AP Deployment
Long-distance
Terminal
application
AP Experience experience
Application
/content
experience
Deployment
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Open Lab
www.huawei.com
Experiencing Environment
Product-line Aggregation
To Enrich Life Through Communication

Providing total network and end-to-end solutions; enabling the advantage
of future network aggregation

Aggregating product lines; actively handling future network aggregation
and service transformation
Application and Service
Core Network
End-to-end
Solutions
IP+Optical Bearer Network
Wireless/ Wireline Access Network
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Wireless/ Wireline Terminals
www.huawei.com
Future Network Architecture - Simplified
To Enrich Life Through Communication
Key Features：Convergence, Mobile, Broadband, Content & Service
32
www.huawei.com
Future Technologies Research
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Establishing laboratories to research FMC, IMS, WiMAX, IPTV, and other
innovative technologies, riding the future trend of network convergence
and service transformation.
Business Operation Support System
GSM/UMTS/
CDMA/WiMAX
Mobile
Access
Single billing, multi services and tariff package
Bearer Layer


Fixed BB
Access
xDSL /FTTx/
Cable/WLAN


Metro
IP over WDM
MPLS
IPV4/IPV6
Service POP
BRAS
GSN
WSN
MG

Service Control

Operator’s Organization Support
Network oriented to customer oriented
FMC solution
www.huawei.com
Personal App
Platform
IMS core
(CSCF/HSS/…)
ICT
Platform
Media App
Platform
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Increasing Investment in Service Application and Terminal
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Providing abundant service applications and terminals to help operators
expand to the two ends of the value chain.
IMPS
Web/WAP Surfing
Streaming
Service &
Applications
Specially Designed
Mobile E-mail
Get involved
LBS
Interactive
MMS
M-RBT
Impression
Game
34
Terminals
www.huawei.com
To Enrich Life Through Communication
Huawei Cooperation Review
Industry Transformation
Huawei’s Preparation
Huawei’s Value Proposition – with Telcos
35
www.huawei.com
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Value Proposition-- Views on Telecom Industry
To Enrich Life Through Communication
•
“Size does matter”!
– Leveraging global economies of scale
– Global market expansion into high growth markets
– Global sourcing
• Open interfaces and standardized products
•
Market trends
– Unpredictable customer demands - no more killer application!
– IT, telecom and entertainment convergence
– UMTS ubiquity!
– Always more competition!
•
Speed to market has never been this important!
– Need to address multiple market segments
– Need to address markets with different cultural background
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A quick-response vendor can reduce the business developing cost !
www.huawei.com
Value Proposition
-- Telcos: Need Support From Strategic Partners
To Enrich Life Through Communication
-> Looking for committed partners, not box sellers
“We have no clue of what our customers want. Our customers have no
clue of what they want. Customers know good when they see it.”
-> Minimize risk from transformation in the telecom industry
• Asia is leading the new round in the telecom industry.
• Speed to market is the key.
• Economies of scale is the key.
-> We are selecting Companies, not Products
• History track
• Development trend
• Potential for the Growth
www.huawei.com
37
Value Proposition– Collaboration with Carriers’ R&D
•
Joint Annual Planning
– Sharing marketing intelligence
– Regular workshop for dedicated issues
– Monitor and survey on-going projects
To Enrich Life Through Communication
• Open interfaces for executive team and development team
•
Co-marketing and Co-service Innovation
– Create customized service
– Joint development
– Host a value chain and innovate new revenue
– Some alpha trial and test,
– Dedicated solution development
– Joint standardization actions
•
New Business Model and Profit Model
– Outsourcing
– Alliance and service exchange
– Overseas extension and service operation
– Introduce SP/CP and service bundling
www.huawei.com
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Customized Service Development Governance Model
• Operator: Requirement
Market
• Vendors: Technique
Product
To Enrich Life Through Communication
Joint Planning and
Operations Review
Planning
PMT
Process Manage
-ment Teams
• Operations&Capacity
Management
• Product Management
& Marketing
• Operator Service BP
JPOR
• Operator & Vendors implement
Service BP corporately
Direction
Issues/Actions
Status
TWG
Technical Work
Groups
• Release Planning
• Architecture
• Testing
NSQR
Network & Service
Quality Review
Time to market, Quality of product, Network & service
www.huawei.com
39
Joint Development (R&D)
--Platform Strategy Supports Quick Response
To Enrich Life Through Communication
•Dedicated Team in
PDT Platform
PDT Wireless IN
…
AIS
TEAM
CMCC
TEAM
PDT Fixed IN
BT
TEAM
…
TELEFONICA
TEAM
PDT Mobile data
SUNDAY
TEAM
…
TEAM
PDT OSS
•Close interaction
HUTCHSON
TEAM
…
CHINATELECOM
TEAM
PDT for each key
customer
…
between PDT & key
customers guarantee
the quick
customization
•Benefit from every
upgrade of TDT
platform
-3~5 new features/services for AIS per month
TDT platform
…
Foundation Version N
Foundation Version N+1
…
•Every upgrade is to fulfill the most trendy new major capability-set
Note:
•Upgrade steadily for high quality of both TDT & PDT platform
PDT-Product Development Team
•Reusable for all PDTs to save the comprehensive cost
TDT-Technology Development Team
www.huawei.com
40
Current Service Realization Process (SRP)
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A phased process that defines how new technology, features and services are realized.
– 6 Phases
– 4 Major Decision Points
– Concurrent operation encouraged while managing risk
Concept: Defines a high level
view of the service idea and
associated time and cost
CSD
Concept
SG-14
MSD
ROMA
Feasibility: Determines the best
network implementation
of the service or technology
Feasibility
SG-13
Service Gates (Can We Go Forward)
SG-14 Start ROMA
SG-13 Start Feasibility
SG-12 Start Feasibility Decision
SG-11 Start Definition
SG-10 Start Commitment
SG-9 Start Development
SG-8 Start Design Implementation
SG-7 Start Unit Test
SG-6 Start Integration
SG-5 Start Performance Verification
SG-4 Start Acceptance Test
SG-2 Start ORT
SG-1 Start Introduction
SG-0 End Introduction
Decision Gates:(Should We Go Forward)
D1 Proceed with Definition
D2 Proceed with Development
D3 Proceed with CI or GA
D4 Proceed with Life Cycle
www.huawei.com
D1
Feasibility Report
Definition: Defines the detailed plan and
requirements needed to implement
the service or technology
Definition
D2
SG-11 TP, FSD, OTP, SOTP, FRS, Proj Plan
Development: Creates the physical
realization that implements
the given requirements
Development
SG-9
SW/HW, Test Plans
Service Test: Tests the service
against the test plan in simulated
and live environments
Service Test D3
SG-4
Introduction: Introduce to
all geographic areas
and begin Life Cycle
SG-2 Test Results,
Certification Matrix Management/Customer Care41
Introduction D4
SG-1
Service/Technology
Launch
SG-0
Joint Go To Market
---How OR, MM, Go To Market & IPD Link Together
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From a cross-process perspective, the requirements management process will
IPD Marketing Program link to MM and IPD processes
Measure
Performance
Dvlp Biz Plan
Align Biz Plan
Go To MKT
Business
Plan
Customer
Communications
Release of Products
Market Requirements
Requirement
s
Project
Technical Support
Products Launch
IPD Process
Emerging Product
Requirements
Handoff to
IPD
Process
Other
events
triggering
PCRs
Life
Cycle
Qualify
Offering Requirements
Develop
Charter
Plan
IPD
Concept
(Process & Tools)
Requirements Management
www.huawei.com
Marketing Promotion
PMT
Project
MKTG PDT
Project
PCR
Project
Legend
Key Inter-project
(Inter-process)
Handover Points
Product Level
OR
Roadmap
Handoff to
Market
Managemen
t Process
Launch
Customer Wants &
Needs
Opportunity
Technology
Segmentation
Mkt Assess
HW Historical Data
MM Project
Product Line Level
MM
HW Biz Strategy
Conceptual Diagram
42
Joint Go To Market-Case Study
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BT－ Datacom SME Solutions Approved, Launch,
Training, Road Show, etc.
China Mobile－ PPS, etc.
China Telecom－ Baby On Line, AS8010, ICT, etc.
Neuf Telecom－ Triple play/IPTV
Deutsch Telecom－ SME Markets Launch
Some resale partners such as
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www.huawei.com
To Enrich Life Through Communication
Enriching Life Through Communication
Huawei Technologies Co., Ltd.
Add: Huawei Base, Bantian, Longgang
District, Shenzhen
Tel: +86-755-28780808
Zip Code: 518129
http://www.huawei.com
www.huawei.com
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