Mobile communications have profoundly changed the world. Without mobile broadband networks and smartphones, people today simply could not imagine how to live and work in a smart way. The digital world is an incredible accomplishment, but it is only the beginning of what is to come.
Huawei and our partners know full well that the ICT industry is changing at a rapid pace. Today we are connecting systems, businesses, cities and societies around the globe; improving efficiencies, transforming industries and creating better experiences for everyone. Now we need to look ahead and explore how we can take our industry and partners to the next level.
On the mobile front in particular, Huawei has launched a MBB 2020 Strategy at the Mobile Broadband Forum in November 2015 in Hong Kong. In this strategy, we set out with the aim that by 2020 we will support 6.7 billion mobile broadband users as we connect the currently unconnected. We aim to support average connection speeds of 1 gigabit per second to create better user experiences worldwide. Thirdly, we aim to support 1 billion C-IoT connections around the globe in order to realize a ubiquitous C-IoT network.
How can we translate this vision to reality? Aside from technical innovations, we see the industry looking at two overarching priorities: connecting people and connecting things.
Connecting people
Moving forward, connecting people needs to remain our top priority. That requires focusing on bridging the digital divide and enhancing user experiences in both mature and developing economies.
In one recent survey on Middle East connectivity, we found that the GCC has achieved almost 183 percent mobile phone penetration and 65 percent mobile broadband penetration. In the wider SAMENA region however, there are only 34 percent of individuals and 36 percent of homes that are connected with broadband. Most of these unconnected populations are in developing countries. On the whole that means less access to educational tools, job opportunities and modern healthcare. This digital divide is widening the gap in terms of geo-economic growth around the world.
Mobile communications in particular can play a significant role in bridging this divide. It means applying greater effort to availability and affordability of mobile services across the region, and this requires ongoing technological innovation on both infrastructure and on the device side to drive adoption. In addition, we hope that regulators can grant more spectrum resources to mobile communication services. According to our estimates, we will need 1,960MHz to realize ubiquitous connectivity. Today, there are only 640MHz available for the telecom industry across SAMENA. Moreover, the cost of the spectrums is another obstacle for some operators. In China, for example, it only takes USD$300 million for one top operator to get the LTE spectrum, but in Germany, one of the top operators paid USD$3 billion which is ten times the price for what is essentially the same. Expensive spectrum fees in any market can severely restrict the business development of operators, IoT development and the closing of the digital divide.
When connecting people, the quality of connectivity is just as important as quantity. That's why we need to focus on better user experience as consumers want HD voice, HD video and zero wait-times.
These are all opportunities, but also challenges for our industry. In order to seize these opportunities, we have introduced emerging technologies like LTE. However, to truly succeed, we need to change the way we think about network planning and operations. For example, to expand our focus from networks to users, and from network performance to user experience. We also need to develop a set of indicators for user experience in addition to network KPIs. Perhaps most importantly, these indicators must be definable, measurable, manageable, and eventually, they can be monetized.
Connecting things
Beyond connecting people, we have now moved full speed ahead in connecting more ""things"". The last several years have shown that the Middle East has already begun entering the internet of things.
This is clearly a huge opportunity for the entire mobile industry. Large-scale IoT requirements are already emerging, and the number of connections between things will far surpass the number of people connections in the near future. End-to-end data management is driving many fields to go digital. We already see this trend in verticals like healthcare, education, government and more, as well as in consumer markets for wearable devices and smart home technology. This trend will become further pronounced in fields like smart city design as the Middle East's infrastructure spending continues to climb.
All of these things must be founded on ubiquitous mobile connectivity for smart devices. Of course, the telecom sector has unique advantages in terms of accessibility since carrier networks have incredibly broad coverage already established. However, other technologies like Bluetooth, WiFi, Ultra Narrow Band (SIGFOX) and LoRa are also being integrated rapidly into commercial fields. This will probably generate more competition in the IoT market.
We are, in fact, at a critical juncture, and we need to quickly develop unified IoT standards to promote cross-industry development. We are glad to see that some of the regional operators have already taken strong action in this area, and we need to speed up the process of making IoT a global standard.
IoT will have a large number of connections. If managed in the traditional way, the connection costs would be huge and unacceptable. We believe that the cost of communications modules has to be less than USD$5 to stimulate large-scale deployment. We also believe that, if we can reduce the cost to less than USD$1, it will lead to explosive growth.
The IoT market will be more fragmented than the traditional telecom market because of the large number of use cases, applications and business models. Therefore, the growth of this market will highly rely on the collaboration of different stakeholders. In the IoT era, we need to expand our focus from managing technology and networks to establishing an ecosystem. Huawei is pleased to see carriers, vendors and vertical industries have already begun researching applications such as the internet of vehicles, smart manufacturing and smart grids.
Digital transformation is creating huge opportunities for the mobile industry. This year's Mobile World Congress is a testament to how we as an industry are expanding our focus from managing technology and networks to establishing a wider digital ecosystem. We are thrilled to see carriers, vendors and vertical industries all working together to research applications in smart vehicles, manufacturing, commerce and more. From connecting people to connecting things, ICT is the primary enabler of today's digital transformation for all industries, with mobile an essential component to building a better connected world.
