On November 21 2005, Vodafone, the largest international mobile communications operator, signed a Global Framework Agreement with Huawei. This agreement marks that Huawei becomes one of the preferred UMTS suppliers for Vodafone Group.
On February 16 2006, in Barcelona, Spain, Vodafone and Huawei jointly announced that Huawei will supply 3G handsets for Vodafone across 21 countries for at least 5 years.
On March 16 2006, Huawei signed a contract with Vodafone for the construction of UMTS network in Czech Republic. According to the contract, Huawei will provide UTRAN system based on the New Generation Node B solution. This marks the beginning of substantial cooperation between these two companies.
It is commonly known that any company selected by Vodafone to be preferred supplier must firstly pass a rather long and stringent certification process. How did Huawei win out over other competitors?
Vodafone, founded in 1982, has ownership interests in 39 countries and regions across 6 continents and owns over 179 million customers. Over the 20 years, the successful global expansion strategy has been the most outstanding highlight for Vodafone leading the way of mobile communications industry. During the process, Vodafone gradually developed a series of prudent and practical expansion tactics, which includes the selecting of suppliers.
Demonstrate Strength to Win Trust
Vodafone once showed its doubts about Huawei's innovation ability in key technologies with the CEO saying that manufacturer from China needs to prove himself capable of conducting highly effective innovations like a leader in the industry. However, during the certification process, Huawei gradually builds the confidence for Vodafone.
I would like to draw your attention at this point to a case involving a high-speed coverage test. In S country in Europe, UMTS network deployed by Vodafone covers a main express railway. Under the case of high-speed mobility, the network performance decreased greatly and the voice call success rate measured less than 56%. Vodafone had no choice but to stop the Node B serving the express railway. In November 2005, Vodafone conducted a test on the high-speed mobility of Huawei UMTS products. To Vodafone's surprise, when the express traveled at the speed of 250 kilometer per hour, such services as: voice, video phone, and internet surfing, remained stably even. For instance, the voice call success rate reached 99.7%. Finally, Huawei received a "very good" comment from Vodafone representatives.
In fact, within the coverage of Huawei UMTS, the quality of services can be ensured even on Shanghai maglev train at a speed of 430 kilometer per hour. Huawei has successfully solved the problem of 3G high-speed coverage and become the only supplier who passed the high-speed mobility test in the industry.
The results of Huawei's high-speed mobility test astonished Vodafone. However, Huawei can bring more surprises to operators, For example, Huawei's New Generation Node B supports 14.4 Kbps High Speed Downlink Packet Access (HSDPA) and firstly supports 384 Kbps uplink data rate; Huawei proposes the Distributed Node B solution, which helps operators to reduce the TCO up to 30%; Huawei firstly launched the Softwitch based R4 commercial networks and deployed in U.A.E, Saudi Arabia, etc. Huawei Softswitch successfully handled the overwhelming traffic generated on Hajj by the Mekka pilgrimage; Huawei has also shown strong innovation ability in the PS, IMS, and service domain.
As everyone knows, 3G is a huge project, which includes standards, chips, hardware, software, terminals, and service platform, etc. Thus, the reliable delivery of 3G system requires the continuous and large scale R&D investment. Huawei spends more than 10% of its revenue on R&D every year. One third of this investment is spent on 3G area. Huawei has more than 8,000 excellent R&D engineers and has established R&D centers in Sweden, America, India, CIS, and China, etc. Huawei owns 2,700 patents in the 3G field. According to the statistics from ETSI, Huawei owns 5% of UMTS core patents and ranks No.5 in the industry. Huawei possesses UMTS core technologies and self-design ASIC chips.
In the coming of 3G prosperity, Huawei will pace forward together with its customers bearing the principle of customer requirement driven in heart. The overall strategy of high quality, best service, low operational cost and satisfying customer requirement with top priority, represents Huawei's resolution in improving integrated capability. The strategy is being recognized and accepted by more and more customers, and becomes a trump for Huawei.
Persistent Innovation to Make 3G Easy
Vodafone, which is a loyal supporter of UMTS, spending about 20 billion pounds to obtain 3G licenses. Vodafone launched 3G commercial services in Japan at the end of 2002 and later launched 3G services in Europe and Australia.
However, the moderate development of 3G project around the globe placed a high degree of pressure on 3G operation. Facing these problems, Vodafone expected looking for a new supplier to provide more competitive solution to ensure the smooth development of its 3G strategies. Under the circumstances, Huawei competitive and innovative solution becomes an appeal to Vodafone, especially with its Distributed Node B solution.
Why is Distributed Node B solution so attractive for Vodafone? The analysis of difficulty in 3G network construction in Europe can give us the answer. In Europe, expensive human resources keep the installation fee very high; The difficulty of site acquisition keeps the rental fee expensive and project period very long. Besides, the transportation fee of Node B also accounts for a big proportion of the total cost.
But Distributed Node B solution can decrease the difficulty of 3G network deployment. Huawei's Distributed Node B divides the conventional Node B into two separate units: Baseband Unit (BBU) and Remote Radio Unit (RRU), which can be installed stand alone and evolved separately. RRU is very light and has a small size and high output power. It can be installed near the antenna; BBU is as big as a DVD box. It can be embedded in 2G cabinet, auxiliary box, transmission frame, etc. Distributed Node B can help operators to decrease the difficulties of site acquisition, transportation and installation etc. Meanwhile, it can shorten project period also. It's established that Distributed Node B will absolutely get wider applications in the future.
Huawei also persisits innovations in core networks. Huawei firstly provides Softswitch core network, separating the control part and the bearer part, which helps reduce the number of network elements, simplify the network architecture, and speed up the service deployment. China Mobile firstly adopted Huawei's Softswitch solution to construct the world's largest transit network, bearing a peak traffic of over 400,000 Erl. The success of China Mobile's Softswitch transit network persuaded more operators to choose Huawei's Softswitch.
With the deep and detailed awareness of the customers' requirements, Huawei has been able to win over more and more operators by its innovative solutions. Thus, numerous operators have set up a long term strategic partnership with Huawei. By the end of April 2006, Huawei has gained 28 UMTS commercial contracts with operators in many countries and regions in the world, such as Czech Republic, Poland, Portugal, Bulgaria, and Malaysia, etc. Meanwhile, Huawei has won the favor of many international leading operators including Vodafone, Orange, Telefonica, and T-Mobile, etc.
Market Driven Management Reform
As a preferred supplier for Vodafone, Huawei meets the following requirements: advanced technologies, excellent product quality, mature management processes, international operation platform and abundant experiences. In fact, during the two-year long certification process, Vodafone spent most of its time on the management processes.
Huawei offered a valuable insight into the importance of management long before. At the beginning of 1999, Huawei applied its integrated product development (IPD) and capability maturity model (CMM) in order to promote end-to-end process establishment. Afterwards, Huawei obtained an in-depth understanding of all these processes through practices, implementation, and all around deployment. As a result, these processes have been integrated into all Huawei staff's daily work and become a kind of corporate culture. At the same time, Huawei has established the organization framework which is lead by strategies and marketing department.
Being one of the core processes, as well as the starting of the end-to-end process, the market management (MM) process embodies Huawei's core strategy, which is: serving for our customers is the only reason that Huawei exists and customer requirement is the driving force for Huawei development. The market management process involves the collecting and analyzing of customers' requirements, making order of the requirements and making executable business plan, which practices the principle of customer requirements driving R&D.
The cell multimedia broadcast (CMB) provides a good example of customer requirements driven R&D. An investigation of 3G services in Europe, Japan, and America revealed that mobile TV has a large scale potential market. A survey conducted in Germany also showed that 80% users look forward to mobile TV service. From the above market investigation, Huawei found that what most users want is to enjoy high quality mobile multi-media services at an affordable price, and what most operators want is to provide high quality multimedia services by utilizing less network resources as soon as possible. So, Huawei decided to develop CMB solution which provides multimedia services like mobile TV through broadcast technology. Huawei's CMB solution is not only operable, but also economical and convenient, which is already attracting the attention and support from a large number of operators.
The MM process is the upstream process of the IPD process. Once requirements are confirmed, they are delivered to IPD-CMM process. IPD process focuses on the overall product development management As a leading software quality control criterion, CMM helps to control quality during the R&D phase, leaving as few problems as possible for the next phase.
IPD-CMM ensures stable and reliable products, as proved by X operator in country A. Country A is frequently stricken by lighting storms, especially during the monsoon. When stuck by lightning, a changeable electromagnetic field is generated and strong exterior interference is formed. On April 11, 2005, equipment room of X operator was struck by a strong lightning, which subsequently caused UMTS equipments of a well-know supplier to go down. However, UMTS equipment of Huawei still remained running. This event helps to prove the reliability of Huawei products, which are further ensured by the strict IPD-CMM process. Huawei has thus kept in-step with the leading international suppliers.
After an investigation of Huawei's suppliers and customers, Vodafone was satisfied with Huawei's management process. Its strict and efficient processes, which are customer driven, have not only given Huawei a new look, but ensured its share in the international market.
The world witnessed the coming of the 3G era. European operators have launched the second round of 3G networks construction, Asia Pacific and American market also starts their 3G. Huawei, bearing in mind that our existence lies in the services we provide to our customers, will strive even harder in the future, as we pacing forward together with our customers, into the 3G era.
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