Jim Lu: The big guys’ decision is the most
part of transformation
Transformation for telecoms operators is a necessary
strategy. Some are moving fast – mainly the small,
nimble companies that are not part of a large coordinated
group. However, some have not yet recognised the importance of
what is happening.
Jim Lu, president of global technical services at Huawei, has a
better sense than most not only why operators need to get
moving with their transformation plans but also which ones are
hearing the message most clearly.
He is now based at Huawei’s head office in
Shenzhen, the Chinese city – close to Hong Kong
– where most of the country’s
high-technology industry is based.
However, he spent five years based in Warsaw as president of
the company’s division covering the Nordic
countries plus central and eastern Europe. "That meant I
covered 28 countries, though a lot of them were small," he
However, that experience means Lu is well acquainted not only
with the industry’s giants such as Orange and
Deutsche Telekom – both of which have operations in
central and eastern Europe – plus Telia and Telenor
but also of a range of smaller companies. He names Elisa in
Finland, Play in Poland and TDC in Denmark, for example.
Elisa pioneered mobile packages where customers pay according
to the data speed they want, he notes.
"Many operators in Europe have found the right way for their
transformation," he says. "It depends on group strategy, but
smaller companies can make decisions quickly, and they can
transform quickly. For them, the process if very short.
However, there are different business situations."
TDC has been a business partner of Huawei since 2007, he says.
"Huawei has helped TDC on network design, planning, operations
and development," he says. But it does vary, operator to
"Different operators have different positions," he says. When
an operator is in only one or two countries, the
decision-making process is easier than for a large group with
businesses in many countries.
It is not just size. Lu picks out AT&T as a company "with a
strong desire to transform", he says. And, though he
didn’t say so, it’s notable that two
of Europe’s biggest groups, Deutsche Telekom and
Orange, are both customers of Huawei network equipment.
Keeping a long-term view
Technology and organisational structure may be a challenge; he
says, "but the most challenging is the big guys’
decision". He means the CEOs and CTOs of the operators. And, of
course, many of them have shareholders to persuade.
The biggest challenges in the large companies are that
shareholders tend to look ahead only a few years. So CEOs of
many of those operators feel pressured to look only to next
year, or the year after that.
Not enough, suggests Lu. "For transformation, we know that we
need a long-term strategy. This is important." CEOs have to
start educating the rest of their company and their
shareholders about the necessity for such a strategy.
Yes, transformation has uncertainties, he agrees. "I would say
that operators’ executive teams need to explain
the situation clearly to shareholders – because
everything is transforming. We should show shareholders the
future – tell them why they need to transform. That is
very important," says Lu.
Lu was speaking to Global Telecoms Business at
Huawei’s Operations Transformation Forum, held in
the Chinese resort of Wuzhen. It was attended by speakers and
delegates from operators around the world: China Mobile,
Deutsche Telekom, Telefónica and Vodafone executives
were on the conference agenda.
"We planned to invite 300 customers to the Operations
Transformation Forum, but more than 600 came," says Lu. "We
have been discussing what is the right way to transform. We
want to build a platform."
As an aside, he quotes a survey: "Now 8% of operators think
they have finished digital transformation," he says, "but 40%
think they have just started and the rest think they have just
started to think about transformation." It is definitely on the
agenda for operators.
Huawei has set up what it calls the Open ROADS Community to
promote operational transformation: ROADS stands for Real-time,
On-demand, All-online, Do-It-Yourself, and Social. The
community meets regularly, most recently in London the week
after the Wuzhen forum.
Taking to the open ROAD
Lu’s colleague Hou Yuzhou – or Joe Hou
– says that the Open ROADS Community is "for all
operators and their partners across the industry, including
labs and research institutes". The intention is not just to
educate the industry, but to plan a path.
"We have many operator customers, and different customers have
a different challenge. We try to find a clear transformation
path, using different tools," says Hou, who is vice president
of global technical services.
Different operators have different reasons for their
operational transformation, he notes. "Some operators will use
digital transformation to save opex first. Some operators will
say they want to improve customer experience. Some want to
offer new digital services. So we will try different solutions
to achieve the different goals."
ROADS, says Lu, is designed to be an open ecosystem. "We want
to help our customers with the ROADS experience." The first
operator to partner on the project was Hong Kong Telecom (HKT),
across the border from Huawei’s head office.
"Our strategy is very matched," says Lu. "In the beginning, at
the executive level, we talked about digital transformation.
The top management team agreed that this is the direction they
wanted to go."
Huawei and HKT built a joint project team, and the operator
started learning what exactly is involved in digital
transformation and what is the benefit. "After only three
months the joint team became very excited," he says. They
realised that there was new business to be generated from
digital transformation – and in a short
"It’s most important that we tell the management
of an operator what is the effort involved and what is the
outcome," says Hou. "Everybody knows that this it is not easy.
You need to break it down in different phases." However, the
scope is potentially wide, adds Lu. Poland’s
Polkomtel – which operates under the Plus brand
– "has chosen Huawei to be its business information
systems supplier", but the company’s owner,
Zygmunt Solorz-Żak, has a range of other businesses,
including Poland’s most popular TV channel. The
company "wants us to supply it, not just for telecoms", says
Improving operational capabilities
"Operators have had a lot to contend with in this industry. In
mobile they have gone from 2G to 3G to 4G" – and 5G is
coming soon and on the fixed side they have moved from TDM to
IP. "The technology has been intended to improve the network.
However, the purpose of digital transformation is to use
digital technology to improve operational capability," says
"This is one of the biggest differences. Operators need to have
the capability for innovation – to innovate new
services quickly like internet companies do. They need to
dramatically shorten their time to market and to improve their
As part of all this, operators have to develop a different
approach, notes Hou. "Operators have to train their employees
in different skills. Some 80% is still telecoms, but they need
to add skills in digital technologies, cloud computing and so
on. They need to know how to use this technology. It is
important to improve the business."
"Their knowledge of the telecoms industry is still critical
– there’s no need for them all to become
Take small steps at first, he says. "Operators provide many
services – consumer services, enterprise services,
video, voice, data, and so many services."
What he suggests is that operators will transform by selecting
one or two services with which to start, building a greenfield
infrastructure for them. "When one or two services become a
success they will come back for more services and more
platforms," says Lu.
Huawei is transforming too, he concludes. "Huawei wants to
change to become a product and solutions provider, to help
customers with their business problems. We do not want to sell
products to customers. We want to face this challenge of
uncertainties together with our customers."