TBY talks to Xia Xiaohu, General Manager of Huawei Ecuador, on closing the digital gap between rural and urban areas and his company’s efforts to be a world leader in the communications technology.
TBY What technology has Huawei introduced in Ecuador?
XIA XIAOHU Our first big contract was in 2002, for fiber-optic SDH rings in Guayaquil. We have always worked to introduce the latest technology in Ecuador. Since 2004, we have introduced broadband and DSL, DWDM fiber-optic transmission, and next generation networks. In 2007, we introduced 3G technology to Claro. The entire Claro 3G network is using Huawei technology. We also introduced code division multiple access (CDMA) in 2008 to CNT and ETAPA. This CDMA network provides very wide rural coverage. The government can now provide telecommunications and internet to many rural areas. This is part of the government’s effort to close the digital gap. We offer more bandwidth to the user with WiMAX, IPTV, and fiber to the home (FTTH) systems. In 2012 we will continue to promote some new technologies in the local market; for example, Long Term Evolution (LTE), 4G mobile technology, and cloud computing.
What are the challenges of entering the smartphone market?
The main challenge is that we lack experience in the consumer market. Over the past 20 years, we have focused only on the carrier business, and we haven’t directly dealt with consumers. Even though we started our handset business in 2003, we only dealt with carriers as OEM and ODM suppliers, such as Vodafone or T-Mobile. In 2011, Huawei set up its Global Design Center for handsets in London. Some design masters from Germany and Japan joined the company as well. Our product capability has rapidly reached top class. We have introduced the slimmest smartphone in the world, just 6.68 mm thick. At the Mobile World Congress in Barcelona in March 2012 we also announced a new smartphone, equipped with a self-developed quad-core 1.5GHz CPU, which is the most powerful handset in terms of hardware performance. However, we still need to learn more about public branding and marketing. Similar to the whole company, we have organized three business groups in Ecuador and have promoted them, especially in 2012.
What are the advantages of your service and product portfolio?
The advantages of Huawei are mainly in technology and solutions. We have a very broad portfolio. There are some leading technology companies in three major telecoms network areas: mobile, fixed, and IP. Among them, Huawei is the only one ranked in the top three in all three areas. For enterprise solutions we have the widest scope in ICT technology. Our customer-oriented R&D capability can rapidly respond to requirements from the market.
What are the applications of the cloud computing model for Ecuador?
Huawei’s cloud computing solution was launched in 2010. Since 2011, the Ecuadorean government, enterprises, and telecoms operators raised a lot of requirements. We are currently working on that to explore the opportunities in this field. For cloud computing, data centers are the most important infrastructure to develop. In the Chinese market, every Huawei smartphone user gets 160 GB space in the cloud for data backup and for storage.
Will Huawei be implementing 4G in Ecuador?
In 2011, we signed Latin America’s first commercial LTE contract with UNE EPM Telecommunications, a Colombian company. Huawei is a leading LTE vendor in essential patents and commercial applications. We are ready to offer LTE solutions, and it simply depends on the operators and the spectrum allocation.
Are you involved in the mobile content segment?
We do provide some mobile content in addition to the platform itself. We provide the Service Delivery Platform (SDP) to both Telefónica and América Móvil for all of Latin America. We don’t do too much developing, and generally the operator itself organizes content, though we have global agreements with music and newspaper companies. The content is based on the requirements of the operators. In some countries they want to form a joint development with Huawei to deliver content, but in others they prefer to design their content alone.
What is Huawei’s strategy in Latin America, and what does Ecuador represent in this plan?
Our strategy is very clear. We would like to gain leadership in the ICT market. Similar to the whole company, we have organized and promoted three business groups in Ecuador, especially in 2012. Huawei has already become a major ICT player in Latin America, including in Ecuador. We have seen the Ecuadorean government make efforts to promote local ICT infrastructure and offer universal services. Huawei is willing to work with operators to continuously increase the network connectivity in the country.
How much will Huawei invest in Ecuador in 2012?
For the carrier business, I don’t think there is a lot of space for growth. The operators’ investment in the network is stabilizing. But I hope our enterprise business and consumer business will be growth areas. We have seen some opportunities to introduce new technologies into this country like LTE, FTTx, and computing.
How many employees are there at Huawei in Ecuador and how do you assess the quality of human resources?
Huawei has around 350 employees here in Ecuador, and I’m very satisfied with the quality of human resources we have. Of the 350 employees, only 30 are from China. The majority of jobs are performed by our Ecuadorean employees. We have been here for around 10 years, and there has been a solid knowledge transfer, not only within our own company, but also to our outside partners and contractors. Almost 2,600 engineers have been trained by Huawei and introduced to the latest technology. We will start a new technology certificate program in Ecuador in 2012 to strengthen our skill transfer policy.
What are your expansion plans in the short term?
We’re hoping to expand the enterprise market, especially in the government, education, and healthcare sectors. In the consumer market, we will increase the smartphone share and keep our solid market position in broadband modems and data cards. Now we have a full smartphone portfolio covering high, medium, and low requirements. Smartphones are the key for traffic and revenue generation for operators.
What opportunities are present in Ecuador?
Mobile internet traffic has already exceeded the fixed connection market worldwide now. There are a lot of customers using social network services (SNS) and enjoy music on their phones, for example. The growth has been explosive. People don’t have enough time to sit at home to chat or use the internet, but with the mobile broadband service customers can enjoy the fragments of time when they are somewhere such as an airport or waiting room. We firmly believe that more and more broadband will be demanded and available in Ecuador in the near future. Mobile broadband has begun to drive the entire ICT sector. If wireless and cable broadband access grows, we have to bear in mind that infrastructure must grow too. When AT&T first introduced the iPhone, for example, the infrastructure crashed periodically because of the high volume of data traffic.
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