HUAWEI TECHNOLOGIES CO., LTD.

From Vision to Reality: Building Successful Service Innovation Ecosystem

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Situation Analysis: Analysys Mason Prediction on Messaging (severe competition) and ARPU

Telco messaging will become niche, anticipate rapid revenue decline as SMS moves to data. Analysys Mason is predicting a >25% ARPU decline by 2018 in Western Europe. Industry needs to find >$100B in new revenues within 5 years, else face decline.

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Services are the key to future profits

Horace Dediu Asymco: April 2014 http://www.asymco.com/

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Operators have THREE distinct businesses

Distribution Business

The new telco Opportunity: build an ecosystem to drive distribution of unique telco services

Services Business

Connectivity Business

Asymetric Competition: OTTs offer services for free (e.g., Viber), close to free (e.g., Whatsapp). The “bundle” biz model of “service + connectivity” of telcos makes it difficult to compete .

A symbiotic relationship between telcos and OTTs: (e.g. iPhone apps drive data revenue.)

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Platform economics – the Telecom API ecosystem

ME SMEs and Enterprises

Operator A

Global (Telecom) Developer Community

Huawei Platform and APIs Core Network, IT, Software and Services

Operator B Operator C

Platform Partners

Customers

Exposed Telecom Capabilities creates potential for new services

New applications and services creates demand for operator capabilities

Successful new communication services create new demand for operators core business (voice, messaging, data)

New business value

New communication services add value to operator’s customers and reduce churn

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Indonesia (On going) Southeast Asia

HongKong Central Nigeria

West Africa

Mexico Latin

America

Netherlands Europe China

Asia

UAE(on going)

Middle East

Egypt North Africa

Brazil South

America South Africa

South East Africa

Aggregation: Huawei Hosting Centers to support digital service transformation

l  Now Huawei has 7 hosting centers (1 central, 6 regional) all over the. l  Other three regional hosting centers in Egypt, South Africa and Brazil are in building.

THANK YOU www.huawei.com

Copyright©2014 Huawei Technologies Co., Ltd. All Rights Reserved. The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice.