State of Telecom Industry in Pakistan

Newsweek ran a story about how Huawei is good with engineering and keeping its prices low but has challenges with branding. See excerpts below. Is that the case with Huawei in Pakistan as well?

[Huawei] has built its success the old-fashioned Chinese way—by selling to other businesses, rather than directly to consumers around the world, and by competing on price rather than on innovation. Its founder and CEO, Ren Zhengfei, is the anti–Steve Jobs—he has never given an interview to the foreign press. Huawei Internet routers and cell-phone switches (with names like Quidway-S9300 Series Terabit Routing Switch and GSM/UMTS Home Location Register 9820) are used by many of the world’s biggest telecom carriers, including the likes of Vodafone, providing phone service to more than 1 billion people worldwide.

The article talks about how Chinese companies, many of them technical, handle branding. Huawei has to face scrutiny due to its ties with the Chinese government. Its a double edge sword as they have benefited from that relationship as well.

Chinese approach brands—as a fact or skill set to acquire, not an art to master. Wen’s speeches on the issue, and new Beijing loan programs to address it, reflect this thinking. So do the efforts of local governments in cities like Dongguan, a major export hub that still focuses mainly on assembling products for Western brands. Officials here admit that local firms have little or no brand savvy, and they are pouring in money to fill the gaps. Using part of a $20 billion stimulus package from Beijing, they are subsidizing companies that set up R&D centers, train staff in marketing, and register trademarks.

The state connections of all big Chinese companies still raise red flags among customers. Huawei dropped a joint $2.2 billion bid for American telecom equipment maker 3Com last year after U.S. lawmakers called the deal a threat to national security. It withdrew an earlier bid for Marconi, a landmark British electronics and information-technology firm, after Conservative Party leaders called for an investigation of whether China’s government could use Huawei ties to Marconi to spy on the British defense industry.

Huawei executives say accusations that China could use their equipment to steal sensitive data are ludicrous. But, as every good marketer knows, perceptions matter. If Huawei wants only to cultivate a few hundred elite industry buyers, perhaps it can explain itself to them directly. But if China hopes to build dominant names in the global consumer market, it needs a very different role model. One that has some interest in becoming a famous name.

I am happy to report on the continuing partnership between my alma mater University of Engineering & Technology, Lahore and Huawei Technologies (see this related post). Recently UET celebrated the World Telecom Day 2009 with collaboration of Huawei Technologies in Al-Khawarizmi Institute of Computer Science, UET, Lahore. This is the right way to support research and development – think global, act local.

The technology leaders and decision makers of telecom industry attended the event. The Chief Technical Officer of Huawei Technologies Mr Li Ke was the guest of honor. In addition Ch. Irfan (CTO Warid), Dr. Tanveer (CTO Zong) and Mr. Mian Zulqarnain Amir, Secretary Information Technology joined the event. Minister of Education, Mian Mujtuba Shuja-ur-Rahman was Chief Guest.

The Vice-Chancellor, University of Engineering & Technology, Lahore said that UET has been playing its major role in the academia and industry of Pakistan. To step up its contribution towards the telecom industry, UET joined hands with Huawei technologies, China. As a result, Huwaei UET Joint telecom IT Centre was established in the university premises. In 2003, Huawei provided UET its latest GSM equipment that was worth 3million USD. And now in 2008, Huawei has provided the latest high-tech GSM/GPRS equipment that makes the centre worth 8.3 million USD in full amount. He also said that Huawei Center is providing a platform to Engineers for their trainings and practice on the equipment which they cannot perform in the field. The centre also strengthens the industry-academia relation by offering different training courses to the students of engineering universities all over Pakistan. This way HUTIC proves to be a great learning opportunity for the students as well as professionals at a national level. It is a symbol of Pak-China friendship.

Mr. Ikram ullah Qureshi, Telecom Businessman congratulated the efforts of UET, Lahore and Huawei Technology China in setting up this joint venture. He said that the Huawei-UET joint Center is a win-win strategy for Huawei and UET, Lahore as it provides access to latest technology to students of UET and other universities and a world class facility for Huawei engineers and customers.
The Chief Technical Officers of main Telecom Industries of Pakistan also highlighted the importance of technology in education sector and academia-industry collaboration. They emphasized the need of greater research opportunities for the bright engineering students of Pakistan and that the Huawei-UET joint center is an important step towards achieving this objective.

As indicated in previous fun post by Babar, Huawei Technologies, a leader in providing next-generation telecommunications network solutions worldwide showcased its first Android-powered smart phone at the GSMA Mobile World Congress in Barcelona. This smart phone will be commercially available in the third quarter of 2009.

Huawei is delighted to showcase its much anticipated first Android-powered smart phone. As a terminal solutions provider with all-round capabilities, Huawei has an acute insight into the drivers of the communications industry and in-depth understanding of operators.A pioneer in mobile broadband devices, we look forward to expanding a compelling mobile communications experience for end-users whilst providing customized services to our operator partners via the Android smart phone.

Mr. James Chen,

Director of Huawei Terminal Marketing Department

With things coming from China, technology will definitly get cheap. “Sab China” :)

[ Source: Huawei ]

Huawei Technologies announced that its global contract sales of wireless access equipment, core network and auxiliary infrastructure reached US$10 billion in 2008, a growth of 50% from 2007. Huawei counts 35 of the world’s top 50 operators as customers (a few of them are in Pakistan of course), and is registering growth across the board with all wireless technologies. Huawei is progressing on the LTE front as well. Recently, it won the world’s first commercial LTE contract with TeliaSonera along with Ericsson. Head of Huawei’s Wireless Network Branding, Lu Xingang revealed that the company has already deployed LTE trials in Europe, North America and Japan and has completed field tests, including throughput, latency, MIMO, high speed multi-user access and cell hand off, as well as multi-service QoS. At the same time, it is developing both FDD and TDD versions of LTE.

Its success is led by GSM, which registered a 100% growth year on year for 2008. Huawei shipped 1.5 million transceivers inside its GSM base stations during the year, representing around 30% of the total GSM market and number 2 in the world, Lu said. Huawei also registered impressive growth in UMTS and CDMA sales last year. “UMTS also grows very fast. Huawei won 42 new UMTS/HSPA commercial contracts in 2008.

By the end of 2008 we have accumulated a total of 128 UMTS/HSPA commercial contracts, which means Huawei has constructed half of global UMTS/HSPA networks,” Lu said.” Although the CDMA market size is becoming smaller, Huawei CDMA still maintains a 35% growth with 220,000 transceivers new shipments in 2008. Huawei performed particularly well in China, winning 30%+ market share in China Telecom CDMA phase-1 project.”

“The first commercial LTE product will support FDD at 2.6GHz & 700MHz and TDD at 2.6GHz,” Lu said, adding the both FDD and TDD platforms will be launched commercially within 2009. “Huawei is closely working with all of three China operators in the roll-out plan. It is estimated that the first China LTE trial will commence in late 2009. Year 2009/2010 is the most important period for China operators to do LTE trials.”

As we were discussing the shift towards the smart phones in our recent posts ‘Battle for the Smart Phone’s soul‘ and ‘Making Technology Accesible for Everyone‘, news just flows in that the cellular market leader Nokia will now focus more on smartphones. And that means smart applications and better hardware. Nokia will focus on five core service areas: music, maps, media, messaging and games.

After an unexpected decline in sales and net profits in the last quater, Nokia has geared up for the smart-phone competition. As reported by Total Telecom, CEO Olli-Pekka Kallasvuo expressed,

The macroeconomic environment is a challenge, “and will remain so in 2009,” said Kallasvuo, as he lowered guidance for market volumes for this year.

Nokia now expects device volumes to fall by 10% industry-wide this year, having predicted a 5% decline just last month. However, Kallasvuo noted that the decline is likely to be steeper in the first half of the year than the second, raising hopes that a revival is not too far away.

The overall device market shipped 305 million units in the fourth quarter, down 9% on-year and down 2% sequentially, Kallasvuo said. The decline comes on the back of “weaker consumer confidence, unprecedented currency volatility and credit tightness,” said Kallasvuo.

“Our devices market share was 37% in Q4, down slightly on a sequential basis,” the CEO admitted. Nokia claimed 40% of the market in the year-ago quarter and 38% in Q3.

However, Kallasvuo expects Nokia’s market share to remain flat, on a sequential basis, in the current quarter and “we are targeting share gains in 2009,” he said.

And Nokia has identified the smartphone space as key to improving its market share.

The vendor reported a slight decline in its share of that market to 32% in Q4.

“Our smartphone volumes were down,” Kallasvuo noted. “[But] our smartphone portfolio is heading in the right direction,” he insisted, highlighting the 5800, which launched in some markets in November, and the recently-unveiled N97 in particular.

Kallasvuo reiterated his intention to expand Nokia’s smartphone presence a number of times during the presentation, including tackling new markets and a wider range of price points and consumer segments.

“Smartphones are not high-end only,” the CEO said. “And that is what you see from Nokia in 2009.” The executives on the conference call were keen to point out that smartphones are not all about the hardware.

“[We are] expanding the definition of smartphones,” and combining the devices with services, said Nokia chief financial officer Rick Simonson.

Nokia will focus on five core service areas: music, maps, media, messaging and games.

“[We will] increasingly combine those [five services] with a large portfolio of devices,” said Simonson. But these “product combos… [are] not the same thing as giving the services away for free, Simonson added.

Where as an analyst told ZDNet UK that,

Nokia’s reported sales had fallen short of analyst expectations. “I expected flat quarter-on-quarter sales rather than a drop, and that is a sign that things are tough,” she said.

Milanesi pointed out that Nokia had seen a particularly sharp decrease in device sales in the Greater China region (36 percent down year-on-year) and in the Middle East and Africa (23 percent down). “[Sales in] emerging markets are slowing down, and that’s where Nokia has a lot of market share,” she said.

“For China, we’re still looking at where has this all gone — so far, we haven’t seen [sales] going to other vendors,” Milanesi said. “So, either the market is getting smaller, or [manufacturers of cheap, unbranded handsets are picking it up]. When people are on tighter budgets, they will go for a phone that might look like a Nokia but costs 10 times less.”

Thats not all, in 2009 smart-phones are going to see a fierce competition as apart from the current market players rumours are in that Huawei, Motorola and Samsung are also ready to come up with an Android based smart-phone some time in the second quarter.

Lets see if this smart-phone race goes smart with cost too.

Huawei has signed an agreement with PTCL to build a complete nationwide LH DWDM Network for PTCL by replacing existing outdated 10G DWDM (dense wavelength division multiplexing). This will be the first time in Pakistan that cutting-edge 40G/wavelength (readiness) and ASON (automatic switched optical network) technology is introduced in Pakistan. This will provide Nationwide DWDM Backbone Network to help PTCL transfer with much greater bandwidth providing capability.

ASON uses restoration mechanisms that allow the dynamic rerouting and recovery of the circuit even in cases of multiple failures, as long as there is available bandwidth. According to Cisco, DWDM was first deployed on long-haul routes in a time of fiber scarcity. The equipment savings made it the solution of choice for new long-haul routes, even when ample fiber was available. While DWDM can relieve fiber exhaust in the metropolitan area, its value in this market extends beyond this single advantage. DWDM delivers additional value in the metropolitan market because of fast and flexible provisioning of protocol- and bit rate-transparent, data-centric, protected services, along with the ability to offer new and higher-speed services at less cost.

More from the press release:

Mr. Muhammad Nasrullah, Executive Vice President, PTCL, during the contract signing ceremony, said: “We are very confident with the DWDM solution that we are going to implement from Huawei. This will improve our capacity, performance and services, offer to our valuable customers.”

Mr. Li Zhiqiang, Executive Director, Huawei commented: “Huawei greatly values its strategic cooperation with PTCL. We truly hope that Huawei DWDM solution will help PTCL to maintain and improve its leadership position in the telecom market of Pakistan.”

Warid Telecom, has deployed a solar powered BTS site using Huawei’s Solar Powered Macro Base Station (BTS). It is claimed that this is the first solar powered BTS in Pakistan. See Huawei site for the full press release. This is a welcome step for Pakistan telecom industry. A while ago we had written about Telenor’s efforts for alternative and renewable energy options. It is good to see that other operators are investing in clean technology options. In a way, the energy crisis has forced many companies in Pakistan to do this. It also makes sense to use technology from the Chinese infrastructure giant Huawei as Chinese companies are at the forefront of solar technology development. It would be interesting to get more information about the financial details of what it takes to deploy and run the solar powered BTS and what is the payback on the investment.

Here’s more background about the Warid-Huawei solar powered BTS.

Huawei’s Solar Powered Macro BTS allows the operator to extend its network reach into remote areas of the country where there is limited access to the electricity grid.

With the continued growth of mobile phone subscribers in Pakistan, operators are expanding network coverage especially in small and medium sized cities, suburban areas, countryside, as well as in mountainous areas with poor transportation links. Many of these remote areas have limited access to the electricity grid, and operators have traditionally used Diesel Generator Solutions to power their network sites.

Warid Telecom chose to use Huawei’s Solar Powered BTS due to several factors. The non-hybrid site is 100% powered on solar energy, thereby reducing carbon dioxide emissions and noise pollution, both of which is harmful to the local environment. The solution also reduces pressure on Pakistan’s overall energy supply which further benefits the environment.