Telcos as digital content players

The Middle Eastern operators can position themselves as digital content players by building a strong video business
Content services, Huawei, Huawei video, Video boom in middle east, Video business for telcos, Video for telcos, Video platform


Huawei’s ultra broadband summit in Dubai focused on how the Middle Eastern operators can position themselves as digital content players by building a strong video business

With increasing development of the ultra-broadband industry in the ME region, videos have become the basic service. To seize this development opportunity, Huawei has urged the region’s operators to introduce bandwidth-higher services, such as 8K and virtual reality (VR) keeping in view the major upcoming events, like 2020 World Expo (Dubai) and 2020 FIFA World Cup (Qatar).

Huawei ultra-broadband summit (UBBS) world tour made its stop in Dubai, ME region. With the theme of “Ultra-broadband Enables Telco’s Success in Video Business “, the summit attracted active participation of mid- and high-level executives from operators, consultants, and video partners. Huawei demonstrated the network slicing router that can build E2E slicing networks, achieving integration of 5G, video, and home broadband, and meeting differential requirements for network performance.

Huawei expressed its keenness to support operators in monetising video services as a lucrative revenue stream. The vendor discussed how it will help them to identify high valuable communities and users, and take infrastructure synergy measures to shorten FTTx payback period from six years to three years. Huawei executives further added that the vendor will continue to explore potential video markets in the ME region to its full extent through industry policy-making, content aggregation, and network optimisation and innovation.

Peng Wei, president of network marketing & solution sales department, Huawei discussed how video powers new growth for telcos. Looking forward, Huawei believes the video market will potentially generate additional revenue of over one trillion dollars for operators. This includes about $650 billion from entertainment video and $18 billion from communications video. Vertical industries will have video everywhere, and that market will be worth about $350 billion.

He further went on to explain how video is booming worldwide. In North America, revenue from video-on-demand is 50% greater than box office revenue. In Europe, one Spanish operator’s quad-play subscribers account for over half of their total user base. In Asia Pacific, the number of IPTV users is growing at an annual rate of 71%. This trend is especially clear in China, where the number of new IPTV users reached 40 million in 2016.

Content and video are redefining the telecom industry. With examples of successful video projects by various operations, Peng Wei highlighted how it has become essential for operators to get it right with their video business.

In 2016, on an average, data accounted for more than 50% of total operator revenue from mobile services, according to Huawei. Video and video-related traffic contributed 25%. Huawei estimates that, by the year 2020, video’s contribution to operator revenue will surpass 50%, and will drive up the revenue generated from all data to more than 70%. This implies the role of mobile operators will need to be transformed from being mobile network operators to digital content players too. Simultaneously, the video strategy needs to shift from being reactive to pro-active.

In order to enable operators to successfully monetise video, Peng Wei outlined the various ways how Huawei will work together with the telcos. Huawei will build business consulting capabilities for video to enable telcos’ video businesses to succeed. A team of experts with a deep understanding of the video industry will keep researching models for developing the business. It will also deliver strategic and business consulting services that help telcos find the path to video success, and take into account the regulatory environment in the countries in which they operate, their content partners, business environments, and the unique features of the telcos themselves.

Huawei will also develop capabilities in content aggregation to make it easier and less costly for telcos to acquire content and boost the efficiency of video operations. The existing video platforms of all telcos are not yet really cloud-based, as a result of which the development of video offerings is hindered. Huawei will build a cloud-native, convergent, open video platform. It will support both fixed and mobile access, as well as a variety of video services such as OTT, entertainment, communications, VR, AR, and industry video.

Peng Wei stressed how Huawei’s video platform will “enable telcos to rapidly respond to customer needs, boost their operating efficiency, and give consumers a ROADS experience – one that is Real-time, On-demand, All-online, DIY, and Social”.

Huawei further plans to increase investment in STB chips and open up middleware to build the ecosystem around STBs and smart TVs.

A premium end-to-end video experience requires an end-to-end network to support it. Taking this into consideration, Huawei will build end-to-end networks that position video as a basic service and deliver a premium video experience.

In addition to building networks with a superior video experience, Huawei will also build a team of experts in planning and design consulting for the video business to provide customers with end-to-end services for platform and network planning, design, integration, and optimisation.

Sun Xiaofeng, vice president of Huawei Middle East, head of marketing and solution sales, shed more light on the video practice of Huawei in the region. Huawei’s Much TV solution, is a video ecosystem that enables streaming of TV content through Huawei’s video cloud. Much TV has already been rolled out by several telecom operators across the Middle East and is expected to reach over 3 million users by year’s end, and a forecast user base of 8 million by end of 2017. The plug & play solution enables telecom operators across the region to launch TV platforms quickly and at a low risk, Sun Xiaofeng added. 

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