Corporate Presentation: To Enrich Life Through Communication

To Enrich Life Through Communication
Corporate Presentation
HUAWEI TECHNOLOGIES
Huawei Cooperation Review

Industry Transformation Huaweis Preparation Huaweis Value Proposition with Telcos
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www.huawei.com
Huawei Technologies
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 worlds 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
Continuous Growth

Serving 28 of the worlds top 50 operators Strategic partner with BT, Vodafone, Telefonica, etc.
Contract Sales 9 USD1 billion

8 7 6 5.58
8.2
5
4 3 2
4
3.83 2.67
1 0
2002 2003
2004
2005
www.huawei.com
Financial Performance
USD in millions Year ended December 31 Revenue Net Income Cash Flow From Operations R&D Expenditure Return on Net Assets
2004 3,827 624 396 487 31% 2003 2,694 384 385 389 23% 2002 2,128 108 311 355 7% 2001 2,290 258 204 342 20% 2000
1,933 345 255 180 47%
Revenue amounted to US$6,400 million in 2005

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Notes: All financial data listed prior to 2005 are audited by KPMG.
www.huawei.com
Human Resources
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
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 Indonesia
Canada USA
Mexico
Venezuela Colombia Ecuador 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
Management Transformation
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
Full Audit by Key Operators

Strategic Partnership Selection

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)
www.huawei.com
Global R&D
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

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
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www.huawei.com
Standards and Patents

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 PCT International and Overseas Patents Authorized Patents 9600 pcs 1574 pcs 1844 pcs
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5% of international UMTS essential patents (69 patents), No.5 of global telecom companies Till 31 Dec. 2005
www.huawei.com
Huawei E2E Delivery Process Overview

Research, standard, patent
Technology roadmaps Brand mgt MM
Within C2C framework, e2e delivery focuses on customer commitment to committed delivery
Narrow e2e delivery Broad e2e delivery
Dev Understa Perform Portfolio Bus nd MarketSegmentationAnalysis Plans
Align & Optimize
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
Sales mgt
CS
req NPI
CRM
Relationship mgt - Relationship mgt - Buz partner mgt
- win - leadership team - drive sales exection

Opportunity design point mgt - Resource allocation -Customer sat mgt -Market req - Market forecast - Offering info
ISC
Engineering implement
TS
Sales execution Solution
Supply chain plan

Contract signature
pro
mfg
logistics
Ad/trade show mgt - Info mgt
Spare parts mgt training
C u s T O m e r
Partner and supplier mgmt FIN / HR / IT
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www.huawei.com
Global Supply Chain and Logistics System

Beto -Huawei, Russia
Amsterdam, Holland Cairo Factory, Egypt Dubai
HeBei, China
Shenzhen Headquarter, China
Brazil-Huawei, Brazil
Shenzhen manufacturing and logistic centersupplies globally. Hangzhou factory manufacture data-comlow level products . Brazil factorysupplies to Latin America. Beto-Huaweisupplies to Russia and Eastern Europe. Hub in Hollandsupplies to Europe. Hebei manufacturing centersupplies to northern China and Russia. Dubai logistics centersupplies to middle Asia and Africa.
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www.huawei.com
Supply Chain Processes Overview

PLAN
Plan Supply Chain
Enable Plan ORDER Market Product
Suppliers
SOURCE Source Product Enable Source
MAKE Make Product Enable Make
DELIVER Deliver Product Enable Deliver
RETURN
Huawei
RETURN
Customer-oriented, process-based, building partnerships and sharing information

Integrated high-efficiency and open supply chain with advanced IT tools
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www.huawei.com
Customers
Global IT System
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
Exabyte/Veritus Backup System
SAN Storage System
Data Center
Partners Network Internet
Disaster Recovery Center Local Network WAN Campus LAN, LAN
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International Network
DMZ Backbone Network
www.huawei.com
Industry Position
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)
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www.huawei.com
Vision and Mission

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
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.
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www.huawei.com
Social Responsibility
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

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www.huawei.com
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Business Operation Models Face Transformation

How should operators and equipment suppliers adapt to a more customerfocused business operation model?
Network-focused

Service-focused
Customer-focused

Network layout Technology updates Homogeneous services Service quality
Service provisioning capability
Converged network Converged services Industry chain restructuring
Service marketing Customer increase ARPU
Integrated information services
80smid and late 90s
Mid and late 90s early 21st century
21st century
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www.huawei.com
Cross-industry Penetration and Intensifying Competition

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
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www.huawei.com
Change of Revenue Structure

Diverse contents & services and their short lifecycle makes time-to-market critical.
$
Content services for consumers IT services for business users
VoiceIncluding mobile
1980
Voice operation
2002
Transformation
2010 Non-voice operation
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www.huawei.com
Value Chain Transformation

Value distribution is shifting toward terminal and business service. The carrier + equipment supplier- focused value chain is meeting serious challenges.
Value
Terminal Carrier Service provider Equipment supplier
Future telecom value chain distributing
Terminal
Service provider Carrier Equipment supplier
Forepassed telecom value chain distributing

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www.huawei.com

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www.huawei.com
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Customer need quickly addressed through product roadmap.

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.
Collect
Analyze and validate
Customer
Marketing
Follow-up and carry out
Taken into product roadmap
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www.huawei.com
Customer requirement oriented: Understand customers real requirements

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
Score Solution Marketing Capability 90 High Vision Customer Expectation Marketing Capability
Carrier
1031
Global Market
following
China branc h
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 Vendor n
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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Competency among vendors

www.huawei.com
Consultancy-style Marketing
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
Technology and business plans & cooperative business expansion Network layout & solution design Cooperation process integration
Professional service Pre-sales cooperation solution design

Customer
Outsourcing maintenance
Maintenance of special fields and 3-level maintenance Design management and capability management
Application Database or content Mobile equipment management
Content trusteeship & solution application Management capability
Management operation
construction, operation and maintenance
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Specialized management operation contract General design, construction, operation and maintenance
www.huawei.com
Experience-oriented Marketing
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 Engineering Brand
Terminal Producer SP/CP Operator
Cooperation
Application/content Long-distance Service Verification VCOL Terminal IOT Integration support Verification Verification
Application layout AP Deployment
Long-distance Terminal application AP Experience experience
Application /content experience
AP(1-N)
Deployment
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Open Lab
Experiencing Environment
www.huawei.com
Product-line Aggregation
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

Key FeaturesConvergence, Mobile, Broadband, Content & Service
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www.huawei.com
Future Technologies Research

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 Fixed BB Access xDSL /FTTx/ Cable/WLAN Single billing, multi services and tariff package Bearer Layer

Personal App Platform
Service POP
BRAS GSN WSN MG
Metro IP over WDM MPLS IPV4/IPV6
Service Control
IMS core (CSCF/HSS/)
ICT Platform
Operators Organization Support

Network oriented to customer oriented
Media App Platform
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FMC solution
www.huawei.com
Increasing Investment in Service Application and Terminal

Providing abundant service applications and terminals to help operators expand to the two ends of the value chain.
IMPS Web/WAP Surfing
Streaming
Specially Designed
Service & Applications
Mobile E-mail
Get involved LBS Interactive M-RBT Impression MMS
Game
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Terminals
www.huawei.com

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www.huawei.com
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Value Proposition-- Views on Telecom Industry

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

-> 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
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Potential for the Growth

www.huawei.com
Value Proposition Collaboration with Carriers R&D

Joint Annual Planning Sharing marketing intelligence Regular workshop for dedicated issues Monitor and survey on-going projects
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
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www.huawei.com
Customized Service Development Governance Model

Operator: Requirement Market Vendors: Technique Product
JPOR
Joint Planning and Operations Review
Operator Service BP Operator & Vendors implement Service BP corporately
Planning
Direction
PMT
Process Manage -ment Teams Operations&Capacity Management Product Management & Marketing
Issues/Actions
TWG
Technical Work Groups
Status
Release Planning Architecture Testing
NSQR
Network & Service Quality Review
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Time to market, Quality of product, Network & service

www.huawei.com
Joint Development (R&D) --Platform Strategy Supports Quick Response

PDT Platform
Dedicated Team in
PDT Fixed IN
BT TEAM
PDT Wireless IN
PDT Mobile data

SUNDAY TEAM
PDT OSS
HUTCHSON TEAM
PDT for each key customer
AIS TEAM CMCC TEAM
Close interaction
TELEFONICA TEAM
TEAM
CHINATELECOM TEAM
between PDT & key customers guarantee the quick customization
Benefit from every
-3~5 new features/services for AIS per month

TDT platform
upgrade of TDT platform
Note:
Foundation Version N
Foundation Version N+1
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Every upgrade is to fulfill the most trendy new major capability-set Upgrade steadily for high quality of both TDT & PDT platform Reusable for all PDTs to save the comprehensive cost
PDT-Product Development Team TDT-Technology Development Team
www.huawei.com
Current Service Realization Process (SRP)

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
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 Service Test: Tests the service against the test plan in simulated and live environments
Development
SG-9 SW/HW, Test Plans
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
www.huawei.com
Joint Go To Market ---How OR, MM, Go To Market & IPD Link Together
From a cross-process perspective, the requirements management process will IPD Marketing Program link to MM and IPD processes
HW Biz Strategy
Segmentation Align Biz Plan Dvlp Biz Plan Opportunity
MM
Measure Performance Mkt Assess
Conceptual Diagram
Product Line Level
MM Project Business Plan
HW Historical Data Technology Customer Wants & Needs

Market Requirements
Go To MKT
Customer Communications Release of Products
OR
Requirements Management
(Process & Tools)
Handoff to Market Managemen t Process
Roadmap
PMT Project
Marketing Promotion Technical Support

Product Level
Requirement s Project
Products Launch
IPD
Concept Develop Launch Qualify Life Cycle Plan
IPD Process MKTG PDT Project
Charter
Offering Requirements Emerging Product Requirements
Handoff to IPD Process
PCR Project
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Other events triggering PCRs
Legend Key Inter-project (Inter-process) Handover Points
www.huawei.com
Joint Go To Market-Case Study

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
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
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www.huawei.com

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To Enrich Life Through Communication

To Enrich Life Through Communication

Huawei Cooperation Review

An innovative and customer-oriented ICT company

Contract Sales 9 USD1 billion

1,933 345 255 180 47%

Revenue amounted to US$6,400 million in 2005

Marketing, Sales and Customer Service : 38%

Total staff: Over 35,000 employees

Huawei Technologies (Headquarters)

Venezuela Colombia Ecuador Peru

Zimbabwe Australia South Africa Chile Argentina

Full Audit by Key Operators

Strategic Partnership Selection

Completed Auditing Overview

Motorola(2000-2003) BT (2003-2005) FT(2004)

CMM5 and IPD (Integrated Product Development) have been widely

implemented into product development.

R&D Based on a Shared Platform

Uniform operation and maintenance platform

Fixed access platform

Wireless access platform

Service control platform

Intelligent network platform

Terminal service platform

Standards and Patents

Persistent investment in standards and patents to be at the forefront of future technology.

Participated in 70 international standardization organizations including ITU, 3GPP.

Huawei E2E Delivery Process Overview

Research, standard, patent

Technology roadmaps Brand mgt MM

Narrow e2e delivery Broad e2e delivery

Dev Understa Perform Portfolio Bus nd MarketSegmentationAnalysis Plans

Align & Optimize

Manage & Assess Perf

Deve Qual lop ify

- win - leadership team - drive sales exection

Sales execution Solution

Supply chain plan

Ad/trade show mgt - Info mgt

Spare parts mgt training

Partner and supplier mgmt FIN / HR / IT

Global Supply Chain and Logistics System

Beto -Huawei, Russia

Amsterdam, Holland Cairo Factory, Egypt Dubai

Shenzhen Headquarter, China

Supply Chain Processes Overview

Plan Supply Chain

Enable Plan ORDER Market Product

SOURCE Source Product Enable Source

MAKE Make Product Enable Make

DELIVER Deliver Product Enable Deliver

Customer-oriented, process-based, building partnerships and sharing information

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

Exabyte/Veritus Backup System

SAN Storage System

Disaster Recovery Center Local Network WAN Campus LAN, LAN

Vision and Mission