3 KEYs for Ultra-Broadband Development: "C-E-O" Lim Chee Siong CMO, Huawei South Pacific Region

2 2 UBB Broadband Development Map = （ BB Total Subscriber *Average Bandwidth ） / Population C onnect C ontent C loud Population Dividend Video Dividend Digital Dividend Source: ITU, AKAMAI 3 Dividends in Ultra-Broadband Development ( C ost Reduction ) ( A RPU Increase ) ( B andwidth on-Demand )

Countries with National Broadband Plan Connect % 70% Penetration by 2020 Broadband China 71% 71% Coverage in urban by % 55% Broadband to Households Indonesia Broadband Plan

4 4 Cost is the KEY for Deeper Penetration South Africa China Cost Penetration Cost Penetration 200 $ 28.9 % 1350 $ 0.06% The average home-connected Cost and Penetration of FTTH Source: MIIT Source: Huawei iLab

5 5 How to Lower the Cost… Friendly Policy & Regulations Infrastructure Synergy Innovative Tools & Solutions Source: Huawei iLab £1.2B subsidy for rural BB "Fiber from the home" 20% Cost Saved "From Burial to Aerial" 14% 14% ODN CAPEX Saved Road Railway Crude oil Natural gas Electricity Motorway km Fiber Network Product Innovation Mini OLT, Dual mode ONT… Engineering Innovation Micro-trench, Fibre Blown… Management Innovation Standard Operating Procedure, Subcontractor Training… "Telco first“ as ICT new Target, break LLU in 76 cities Investment Encourage Cost Reduction Egypt Grant new fixed license Activate stagnant market Poland

6 6 Waves of Telcos Launching 4K Video Service 80’ 4KTV <= 2000 € % TV is 4K K Video K channel United States Korea & Japan China Europe ( OTT + Premium Content ) ( FTTH + Policy ) ( FTTH + 4K TV/STB ) ( Competition + Live sports ) Korea’s 4K : BTV, 2013 Japan’s 4K : BTV, June. 2014

7 7 : Benchmarking Video User Experience Quality Content Interaction loading View playing “0” Distortion“0” Waiting“0” Impairment Kick off G.vidmos in ITU-T ( ITU&Huawei ) = f （ sQuality, sInteraction, sView ） U -vMOS Bad 1 Excellent 5 Good 4 Poor 2 Fair 3 Source: Huawei iLab No Distortion Little Distortion No influence Distortion Little influence Distortion Influence Distortion Much influence Video Experience Quantified into 5 grades sQuality sInteraction sView

8 8 : Take a Glance at Cities Around the World Shenzhen China Moscow Russia Mumbai India Karachi Pakistan Sydney Australia Singapore Cape Town South Africa Rio de Janeiro Brazil Paris France Seoul South Korea>3.5 3~3.5 <3

9 9 4K is Game Changer with Experience the Differentiator High BW E2E ≥ 50M*n Low Delay E2E ≤ 20ms Low PLR E2E < 10-6 OTT : Cloud-Terminal Synergy Only Telco : Cloud-Pipe-Terminal Synergy 4K Content Network KPI for 4K video 142.5% CAGR China Telecom SC （ 4K ） = = OTT YK （ HD ） = =

10 Looking Forward, VR is About to Take Off… Facebook press conference by VR VR content made easyDevice widely available Gear 360 Camera 200+ games and social VR apps Connected VR demands ultra-high speed (>750Mbps), and ultra-low latency (<10ms) 20k+ 360-degree videos uploaded to Facebook

11 Telcos Expanding Cloud Service Connectivity Service Provider ICT Service Provider Leased Line Datacenter Cloud Application Global Operators 2015, 82% New APPs in Cloud

12 B2B will be Rebuilt by Cloud “ We sell boxes and services in the past, while capabilities and platforms in the future. ” “ In the future 20 years, enterprise IT service will be the biggest opportunity. ” Cloud leads Enterprise’s LAN to Telco’s WAN

13 On-demand can Fill the TTM Gap in Cloud Business PAN-EU/Terastream ( DT ) CUBE-NET ( China Unicom) Network 2020 ( AM ) CO 2020 ( TI) Domain 2.0 ( AT&T) NovoNet 2020 ( China Mobile) Network 2020 ( ET) Essential 2020 ( Orange) Tenant ordering CPE install CPE delivery E2E service getting ready Device configuration and service provisioning Service monitoring and customer signoff Fiber checking 1 day 15 days 7 days Preconditions Fibers ready CPE delivered Preconditions Fibers ready CPE delivered ~30 days 5~10 minutes On Demand 3 days Telcos launched Plans for On-Demand Network

14 Source: ITU, AKAMAI UBB Broadband Development Map = （ BB Total Subscriber *Average Bandwidth ） / Population C onnect C ontent C loud Population Dividend Video Dividend Digital Dividend C ost E xperience O n-demand Summary: Addressing C-E-O Issues, Achieving UBB Success

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