Huawei OTF 2018: numbers, challenges, 5G and Turkcell

huawei transformation
"The time for going digital is now" – Huawei chairman Hua Liang at OTF 2018. Image credit: Huawei

There were a lot of big numbers thrown around at the Huawei Operations Transformation Forum (OTF) keynotes in Munich this week.

Laxmi Akkaraju, strategy officer at the GSMA, started it all by noting that data consumption was increasing by 40% CAGR and will do so until 2025. She also said that the “mobile economy value added for society” would be $4.6 trillion by 2022, so it’s not an opportunity to let drop.

As Huawei chairman Hua Liang said, citing research from MIT, “When you are digitized, you can get higher efficiency, reliability, and cost savings; when you are digital, you can achieve revenue generation and growth.” The time for going digital, he said, is now.

One theme that was repeated by almost every speaker was that “5G is on”. If ‘on’ means many, varied trials (121 operators across 61 countries) then yes, 5G is definitely on. That said, a couple of speakers sided with the cynics and pegged ‘real’ 5G as still a few years away.

Turkcell dazzles

There was a consensus among the cynical ranks of the press that we could have listened to the Turkcell story for a couple of hours, and it certainly shone as a beacon of innovation that should push many operators into rethinking their approach to becoming digital. It was also strikingly refreshing because it largely ignored 5G. What Turkcell CEO Kaan Terzioglu did say was that operators should not be afraid of (and/or stop complaining about) the explosion in data consumption, because “that is where the money is.”

Although Turkcell has great advantages geographically – and it is relatively easy for it to lock in its customers both at home and abroad because of language – it is still an inspiring story. Terzioglu has certainly brought the company a long way, but there was a lot of effort involved. He spent, according to a colleague in the press, two years building the dashboards that he now depends on day to day.

Having demonstrated his daily management report live (delivered by Siri, or at least a cousin) he turned to his ambitions. Already Turkcell’s music app Fizy is bigger than Spotify, in some areas four times as big. And because the analytics are in place and being used properly, he can leverage the information to manage and predict capacity requirements, recommend music that is compatible with the music being listened to – both on Fizy and, presumably, Spotify – and he is cleaning up.

His next target is to build Turkcell’s e-commerce platform into a formidable machine, using mobile payments as the catalyst to collect four million users by 2020.

Unanswered questions

Across the range of operators speaking at OTF – and there were many – there was universal support for the role that host Huawei has played in the transformation testimonials that were presented. And it is certainly true that initiatives such as Huawei’s freshly opened Digital Transformation Practice Center in Hong Kong with HKT is to be much admired.

Yet two issues remained relatively unaddressed at the event.

The first is just exactly how operators are going to make significant money from 5G investments (indeed a German regulator said the role of policy makers should be to make the investment environment more flexible, otherwise investors would be hard to attract). Frankly, it is still not clear. The interim idea is that telecoms will be an integral part of Industry 4.0 (the digital transformation of all industries) and therefore – presumably – somehow money will flow from that. If that is the case, then let us hope that the lessons of the digital players eating operators’ lunch (and eyeing their dinner) have been learnt.

The other issue is just how digital transformations succeed. The consensus was that it is about people, not technology. As TM Forum CEO Nik Willetts said, “I am confident that this industry can deliver the technology, they always seem to do so, but it is the transformation into digital players that keeps me awake at night.”

Bouke Hoving, executive VP of Networks & IT at KPN, reflected this too, saying that “complexity is the enemy here” and outlined the operator’s multi-year project to simplify its processes. Yet he also said that if “you put a software engineer in a room with a marketer, now almost anything is possible”. This is something that was shied away from in the ‘good old days’.

Culture is key, as has been said many times before, but, as Akkaraju from the GSMA remarked, “Culture eats strategy for breakfast.” This clash remains the biggest barrier to progress within many operators.

The conclusion from this excellent forum hosted by Huawei is that 5G in all its myriad forms is creeping closer, that there are huge steps being taken within operators to simplify processes and change the culture that has been locked in ‘telco’ thinking for too long.

As Huawei says, the key to digital transformation is to ‘think big, start small, then scale fast’. What that means for the progress towards 5G itself is not clear. What is clear is that we have progress, at least.

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Alex Leslie
About Alex Leslie 198 Articles
Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher at DisruptiveViews.

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