Name: Eastworld Spotlight: Huawei CTO says ‘collaboration is far better than isolation or division’
Uploaded: 2020-08-20
Duration: 17 min 23 s
Description: Paul Scanlan on why the world should work together developing 5G.

 [PENSIVE MUSIC] CLAY CHANDLER: Paul Scanlan is the chief technology officer of the Huawei Carrier Business Group. Huawei, the world's largest telecommunications manufacturer. And Paul, were delighted to have you join us to talk a little bit about 5G, this amazing new technology that you're working with so directly. I wonder if we could just start quickly, though, with a general question about where we are, where Huawei is, where the US-China relationship is. Are we creating a digital Iron Curtain between these two countries now? And how does that restrict Huawei's ability to do business? PAUL SCANLAN: For 32 years, we have demonstrated that our customers can trust us. They trust us to improve their business through technological innovation. That's what Huawei has done through and through. And it's unfortunate that this geopolitical war that's going around the world, and nationalism in many countries, fails to understand that we've got a virus at the moment. And the only way you fix those things is through collaboration, not through isolation. Personally, the way I feel and the way Huawei feels is that collaboration is far better than isolation or division. And to share information, to share experiences, to share where I'm heading to is to share use cases and experiences of what can be done with this technology called 5G in collaboration with clinical and AI based solutions. And that's not something that Huawei does alone. These things need to be done with a broader ecosystem not just within a country, but across the globe. That's how you fix problems, right, Clay? And one of the questions that you asked me, what really is 5G? Well, 5G is a platform, Clay-- a platform for transformation. The first thing it does is it helps transform a telecom operator's operating point. And that means its cash flow, it's efficiencies. That's what it does first. And the second area then, of course, is as I mentioned-- it helps reduce the carbon footprint. And that's before we start moving into areas of industrial, I'll say, transformation or industry transformation where the predominant component in that is really about collaboration. CLAY CHANDLER: Can we talk maybe a little bit about some of the plans and the targets, or how rapidly this network will be rolled out in China? PAUL SCANLAN: As of earlier this year, Huawei had shipped about 600,000 of the 5G base. If you were to compare, say, 4G back in 2014-- yes, I can recall that in Europe they spent about 18 billion euros on 4G spectrum. And in China, it was a couple of hundred million. Just laying the foundation here for a moment, Clay-- at the end of the first year, China had 720,000 4G base stations. The combined total of Europe was about 60,000. You're seeing something of the same order now in China. And I'm trying to put that in some numbers. One city here in Guangdong Province has more 5G base stations than Europe. But does that matter? You could do us say, we're rolling out this, we're rolling out that. Well, how many to measure? You can measure it where people think about the traditional standards of 2, 3, and 4G. Governments were always measuring population coverage. That was a typical measurement over, say, three years. And because the objective then was to provide a mobile service, that was the target at the time. And as I just mentioned just now, if you look at what's the real use cases for 5G, then deployment to a coverage area or to coverage of population density and things like that may not necessarily be the targets you're looking for. Telecom operators are rolling it out in what we call macro sites outdoors-- the big cell towers. And that's to get coverage of population. The frequencies we're using in 5G initially don't penetrate buildings very well, if at all. You can see that if I wanted to measure 5G industrially-- in other words, in its ability to transform industries, then those metrics are not really suitable. I would rather measure 5G really by, what's their contribution? How many telcos have achieved zero carbon emissions or being 100% green, for example. Just like Apple announced their targets, and Telefónica have announced targets from different industry sectors. Another measure might be, well, how many industries have we successfully started to transform? How many hospitals are using the benefits, or getting the benefits, demonstrate the benefits of 5G? How many manufacturing facilities have demonstrated the ability to be transformed? I think that would be great with metrics. CLAY CHANDLER: That's fascinating. And is your sense that Chinese companies are approaching this challenge very proactively, and that compared to global competitors they're ahead of the curve? Or, is this something that they still struggle with? PAUL SCANLAN: I believe, from what I've seen-- I've been working in Huawei for now 12 years, and just my experience in certain countries, and it's not just China. But I really do believe that China is-- personally, I believe China is ahead of the game. And what metric would I use? I would just use the COVID-19 experience of the last, say, five months, and just look at a couple of facilities that have been constructed. Over here in Wuhan, it's been well documented that 1,000-bed hospitals have been built within 10 days. We built 5G networks-- proper 5G networks, not just a quick and dirty. We build proper 5G networks in these hospitals within two or three days. We've built advanced cloud based AI solutions within a couple of weeks. And we didn't just do that today. Since 2018-- I think it's been mentioned that in 2018, some of the hospital collaboration that China has been doing allowed up to about 40,000 remote diagnoses of patients in Morocco and in other parts of Africa and in Asia. So that embryonic learning back in 2018, together with the pointy end of the stick that came with COVID-19 in February, led to, I think, or accelerated the thinking not just in China, but we demonstrated it here in China. That really showed the rest of the world spectrum something that's been in the pockets of regulators. It's better deployed. It's better given away cheaply or inexpensively-- freely, almost, with the caveat that we want you to fix some of these problems. Because they understood the value of broadband. But prior to that, they thought it's just a cash cow. But in China, you can see it in universities-- anywhere relating to education. You can see it in manufacturing industries. And Huawei is one of the ones that are doing this in manufacturing. They're largely led by health, understanding that if we can connect and get census devices, collect information, analyze this, we can fix problems. We can improve life. We can improve society. And I really believe that that's what China has done. CLAY CHANDLER: And can you give us a sense of the relative progress of the two largest economies on all these fronts? Is your sense that China is far ahead of the United States and moving towards this kind of world? Or are they-- I hear some estimates that they're neck and neck. Others say the US is going to come from behind later. What's your read of this? PAUL SCANLAN: Well, that's tricky. I'll just give you observations and let your listeners decide what's the right answer. But I just read that the US is releasing another 100 megahertz a spectrum, more spectrum in this thing called C-band. Well, I could probably cite dozens of other countries that have had C-band available for a year or two. The US launched millimeter wave, and it has it had challenges. Why? We won't go into why somebody is better or whatever. It launched millimeter wave based 5G solutions. But it targeted the fixed wireless access, which is largely providing fixed broadband solutions over wireless using 5G. That's not really industry transformation. That's sort of taking that competition between mobile operators and cable operators. But I gave you examples in the Middle East where the governments want to transform industries, and in China where they want to transform industries, and discussions in developing countries where they want to leapfrog so they don't get caught up in the bottlenecks or the challenges that the West has had in stepping step by step. They want to leapfrog all of those. You have many different ways to measure this. But countries like China have 100 megahertz and more for operators for some time. And if countries like the US are only starting to allocate more spectrum, then that's one of the challenges that operators will have in trying to deploy broadly. And deployment is the key to making all this work, Clay. The second area is in China. It's quite normal for us to deploy 5G. Not in big cell towers, but on lamp posts, to share lamp posts. Every second, or third, or fifth lamp post has 5G solutions built on them. And that's because the government understands that you need to share infrastructure. And if you want to have anything along the streets, the footpath or the cars, and you want autonomous or you want connected anything along there-- connected ambulances, et cetera, then you need to have the connectivity along the streets. They're deployment considerations, and some countries understand this better than other countries. I'm not really sure how the US is deploying or sharing a lot of the street furniture. But these are observations that I see here. More spectrum available, more timely. CLAY CHANDLER: As you know, there is a greater awareness of the competitive significance of 5G in the United States. In Washington, there's been quite a lot of talk lately about strengthening the government's involvement in rolling out some kind of 5G operation. But as you're aware, a lot of that recently has been focused on trying to use the government to put together an alternative in the United States to Huawei. How practical does that seem to you from a technical standpoint? PAUL SCANLAN: What I would advise-- what the US does really well is analytics. Have a look at Google and Amazon and the other guys. Work to your strengths. Personal opinion-- work to your strengths. How much are you going to make, or get, or improve by having a 5G piece of hardware? The floor price of a 5G radio is probably going to head towards a commodity based price in the near future. By the time you try to build up any alternative technology, it doesn't matter how good your software and hardware engineering capabilities are. You still have to go through proof of concepts. You still have to do interoperability testing. You still have to comply with standards. If you want to write a new standard, it's going to take years to get that agreed. You still have to have a product that is mature, and stable, and reliable, with the right go to market price. Those things don't happen in a year, or two, or three years. By then, a lot of the infrastructure globally will have been built out. A lot of the opportunities will be well underway. I've been to the US a number of times, and I've said in forums I would have thought the US had turned around and said this equipment from Huawei is terrific. Let's deploy it faster because we know how to do that in the US. Let's connect everything. Let's get all the information, the data. Let's analyze it and let's improve industry and develop our economy, grow. That's where the strengths, really, and that's where the business opportunity, I think, really lies, rather than trying to build up an alternative 5G technology supplier. CLAY CHANDLER: Last September, Alan Murray the "Fortune" CEO and I visited Mr. Ren. And he outlined for us this extraordinary offer for Huawei to license its technology to any American company who would ask for it, and to support it for quite a significant period of time to make sure that all the technical capabilities were there and it was up and running. And to just essentially turn that over to an American vendor. Have there been any takers for that offer yet? Anybody inquired? PAUL SCANLAN: Beyond my level of discussion, I'm afraid, unfortunately, Clay. But I think Mr. Ren would not have said those things lightly without-- he's a very big picture thinking gentleman from everywhere from architecture, to tuition and training, to thinking collaboratively. He's always said that we should never take too much market share. He's always said we should collaborate with Western companies, we should always make room for Western ideas, because that's where through competition comes innovation. This sort of OEM is quite a reasonable way to go, right? It gives you a head start. It could be in the software. It could be in the hardware. If you don't like the way we do our software, then please modify it, improve it. And if you think you do better in the way of the base stations, or the hardware, or the chips, or the material science, or the power management, then, of course you could take that and you'd have you'd have a product. Could be manufactured in the US, could be manufactured anywhere. That's not really the importance of the discussion. It was really to give the US the opportunity to have a head start, I believe. And if that was the real concern of the US, it could have been a very good way. And it could still be a good way for the US to get a product to maturity very quickly, which I think is what one of the administration's targets was. CLAY CHANDLER: You mentioned the possibility that the price would be driven down by competition over time. What does that imply for Huawei? What's next after 5G for where Huawei finds an ample profit margin? PAUL SCANLAN: We've understood for some time that all the other industries are using similar technology to what we're deploying in telecom networks. Telecom is just one vertical industry, one industry sector. We took a decision many years ago to start diversifying. We rolled all the R&Ds into one, and we started having different go-to markets, an energy sector, a manufacturing sector, in financial sector, et cetera-- in education, all of these. And we, I won't say dabbled, but we went ahead according to the strategy of the CEOs at the time. That has taught us a couple of things as we also see about this concept called platform. And cloud is a good example of a platform, just as a telecom network is a platform for an operator, a cloud, a marketplace, or a cloud of solutions, et cetera. We understood that. We could also see networks becoming terribly complicated. And the information within a network just to run it as we went from 2, 3, 4, now to 5G-- the amount of data just to run it and optimize it, make it better for users was enormous. We understood that some AI capability would be better. And that's why we ended up hitting-- that's one of the reasons why we head towards the AI chips that we were developing. Huawei isn't just focusing on 5G. Certainly, my business group that I work for, yes, we focus on building and optimizing the best networks in the world. But just look at beyond that. AI-- Huawei has capability AI. Huawei has capability in cloud. We are diversifying to a lot of these areas where we can understand, we can see what's happening in different industry sectors. And then we try to provide them cost effective, reliable, and innovative solutions to customers in those sectors. CLAY CHANDLER: Fascinating. Paul, you've been very generous with your time. This is a great conversation. Thank you for joining us. PAUL SCANLAN: My pleasure, Clay. 