s4svisuals - Fotolia

Video will become ‘cash cow’ for telecoms providers, says Huawei

Video services have the potential to generate a lot of money for telcos, according to Huawei president of products and solutions Ryan Ding

At its 14th annual Global Analyst Summit in Shenzhen, China, Huawei set out its view on the market and highlighted the company’s key priorities going forward, including digitising itself.

One of the biggest markets for telecoms providers currently is video services, which Huawei’s president of products and solutions Ryan Ding expects “will beome a new cash cow for telecoms operators in the future”.

“If you look at some countries, video has already become a cash cow,” he added. The industry is taking off – in China alone, the country deployed around 40 million IP TV subscribers in 2016.

According to Ding, there are three different types of videos. The first is commercial video, such as video calling or conference calling, which is worth $15bn globally; the second is industry video, which is worth $35bn; and the third and largest is entertainment videos, which generates $65bn for telecoms operators and players in the market.

“Different operators have different strategies to monetise the video,” said Ding. Some monetise through offering TV and broadband bundles – something which is very popular in the UK.

Another method is to provide different, or better, experiences, such as offering 4K video, premium content or multiscreen services, while a third way is through monetising the ecosystem by using ads or social media, for instance.

Connectivity and AI

The 2016 Global Connectivity Index found that digitisation is gaining momentum around the globe, however, in his keynote speech at the summit, chief strategic marketing officer William Xu said there is still a large connectivity gap in emerging markets, where there are 4.7 billion people, but where 3 billion of them don’t have internet access.

“Emerging markets are still growing,” he said. “The major obstacle to marked development in emerging countries today is low return on investment.”

“We estimate that emerging markets will add 2 billion mobile internet connections and 500 million new home broadband users by 2025,” he said.

When it comes to Huawei’s own plans for development, Xu said the company plans to spend the next three to five years “turning Huawei into a digital company” to “help others” go digital themselves.

“ICT is rapidly driving the digitisation of verticals. The inevitable result will be an explosive growth in data. We estimate that the amount of data generated and stored globally every year will reach 180ZB by 2025 – 150 times more than in 2010,” he said.

“To help other industries go digital, Huawei must first digitise our key business processes. Cloud services will be the foundation for the digital transformation for telecoms operators and all other industries.”

Read more about Huawei

In 2016, Huawei and mobile operator Vodafone opened up a narrowband internet of things (IoT) laboratory at Vodafone’s Berkshire headquarters to incubate and commercialise machine-to-machine (M2M) and IoT systems using narrowband networking.

Huawei’s rotating CEO Eric Xu said while not technically new, IoT and artificial intelligence (AI) is also high on the agenda. As it becomes more common, he said, it can be used to enable and improve the value of Huawei’s existing products.

“The journey to an intelligent world has already begun,” he said. “Many years of exploration and innovation in technology are driving industry development, presenting huge business opportunities. By focusing on ICT infrastructure and smart devices, we will enable this intelligent world and drive its ongoing progress.”

He added that the company would like to provide AI in all out products to increase efficiencies and improve our services. Huawei is also planning on investing $200m in building 15 new labs to drive innovation.

Read more on Telecoms networks and broadband communications