Huawei Technologies Deputy Chairman Discusses All Things 5G Technology | Fortune Global Forum 2019

Thank you, Robin. To everyone, it's great to be here.

Yeah, I mean, I think we are already in a smarter world. And from my point of view, the smarter world is featured by three key mega trends: everything will be sensing, everything will be connected, and everything will be intelligent. And driven by those three key mega trends, we've already seen a lot of exciting changes as individual consumers and in business. So, like in medicine, now globally there are around 90 million children with eye problems. It's quite hard for the doctors to detect this disease at an early age. Now we can use a smartphone and artificial intelligence to let a child look at the screen to follow the objects on the screen, and the AI functionality can help detect that problem and help the doctors to provide early diagnosis and early treatment. So this is quite meaningful. And here in France, the French people produce lots of wine every year and they're quite busy in the peak season. And now we can help them to use artificial intelligence and satellite imagery to identify which grapes should be ready for harvest. So in the peak season, that greatly helps them to save time and produce better wine, which is really good for us. So all those exciting challenges are basically enabled by a set of emerging technologies, including 5G, the 5G Internet of Things, artificial intelligence, computing, and probably the blockchain. And among those set of technologies, 5G is a key enabler to support all other technologies to maximize their potential. So we can see 5G as a farmland, and it will help all the other vertical or other digital technologies to realize their big potential for various applications.

Yeah, 5G has great potential for both consumers and business. I'm using our latest 5G smartphone in China for a couple of weeks because the service was announced at the end of October. And I found that it is super fast. Now I can download a high-definition video to the smartphone in just one minute, and with the 4G network it takes 10 minutes. So it's super fast. But 5G for the consumer, 5G is not just a faster 4G. Actually, 5G can help us to create some brand new user experiences. I visited South Korea at the beginning of this month, and in South Korea there is a brand new broadcasting service called 5G-supported broadcasting service, which is a little bit boring but the experience is amazing. Now in South Korea, I tried that. I used my 5G smartphone, I can look at the sports game from any angle I want, 360 degrees. So that's cool. Yeah, that's a brand new experience. That's a totally immersive experience. So it means a lot to the consumers: faster speed and brand new user experiences.

Yeah, so far there are 20 countries launching the 5G commercial services already. So the progress of the 5G deployment is much faster than we expected. Let me share with you some figures. With 4G, it took four years to achieve 700 million subscribers in the whole world. But with 5G, we believe that we'll be able to achieve that in just two years. So it's much faster. And let me share with you a map. From that we can tell that South Korea is the first country to launch the 5G service. And after South Korea, China, the United States, the countries in Europe and in the Middle East are all the early adopters. Yeah, you don't see China on this map because China announced the service on October 30th, so three days, and this map was finished in the middle of October. But China is obviously one of the fast movers in 5G. And for the short term, we expect that to the end of next year, in just one year, we're going to see 60 countries launch their 5G services. And for the longer term, we expect that to the end of 2025, 58 percent of the world's population will be covered by 5G services.

Yeah, 5G can help a lot on individual consumers' experience and on the enterprise operation. And far away, we identified that there are three key gaps we need to deal with in terms of digital inclusion. Because while we are trying to introduce the emerging digital technology to make our lives easier, we still have lots of people left behind, and we think that's not right. We have to deal with some gaps. The connectivity gap: now there are around half of the world's population has no access to the Internet. This is a big challenge, and we believe that 5G can help us on that in a certain way. And the second gap is the application gap. You know, I visited a friend of mine a couple of weeks ago and I talked with his parents, showed them my latest smartphone, and they said, 'I can't... this is fantastic, but I don't like it at all.' Why? Because we don't know how to use it. It's too complicated for us. And we couldn't even get around the city because now taxis are always booked by mobile applications. So we all have parents and grandparents that remind me that while we're trying to move so fast into the digital world, some people are left behind. So we need to make some change to fill the gap of connectivity, to help the other half of the people to access the Internet, and to develop more applications not just for us but also for special groups of people like our parents and our grandparents. And particularly to enhance the digital skills. The figure we observed is that in the European Union, 90% of the jobs by the year 2025 will require digital skills. However, the fact is today there are around 47% of the residents have very limited digital skills, like searching on the website. So we need to do a lot to fill the gap and to improve that digital inclusion. Yeah, Huawei works a lot on that: connectivity, enhance the skills, to give us more technology, stronger technology to promote the skills and to develop the applications.

Yeah, so, same, convertible. Yeah, yeah, I'm not going to make an advertisement, but I do want to show you something really exciting. This is a normal phone, everybody has that. But you know, we launched this foldable screen smartphone last Friday in China. Now you can open it like a mini tablet, but it's not a tablet, it's a phone because when you fold it, it's so portable. And from my perspective, it's not just a normal phone because with a bigger screen and with the 5G network, now I just mentioned that in just one minute you can download a high-definition video into the phone, and then you can enjoy high-definition video on the go with a bigger screen. And beyond that, for many different industries like education, like manufacturing, I believe that the developers will develop some very interesting applications on this bigger screen.

Personally, you know, on the consumer side, it's quite diverse. I would say that eventually we will have a pretty diverse portfolio for the smartphone. But I do believe that, after using it for a couple of miles, I do believe that the foldable smartphone with a larger screen itself is a killer application. Because when we launch new mobile services, we always talk about what's going to be the killer application. But I think that form itself is a killer application because it's multitasking. You can use it to develop lots of brand new applications for different vertical industries, not just for gaming for the consumers, but for different vertical industries.

Yeah, as you just imagined, business in the United States is quite limited, and we never gained any significant sales revenue from the US. So from the sales perspective, the US is just a very, very small market for us. And globally, our business is running well. In the past three quarters in this year, we achieved more than 20% revenue growth year-over-year. And our shipment of smartphones and 5G equipment is also in pretty good shape. However, the ongoing conflict, I mean, the trade conflict between China and the US, does have an impact on our business, particularly on the supply chain. Because we have to shift our supply chain from the US to the rest of the world. And as a company, we've been working with our US suppliers for so many years. And we purchased 11 billion US dollars of goods and services from US suppliers, and now we have to shift the supply chain. So in the past couple of months, we spent a great effort on that, and we spent extra cost on that. Let me share with you some of the figures. We anticipate that in the next three years, the supply from our European suppliers will increase by 60%. And I assume that the gain of the Europeans is the loss of the US. So yes, as I just mentioned, 11 billion in a year from the US, so that's a real impact on our US suppliers as well. So it seems that most of them will lose business from Huawei. And unfortunately, what I learned is that most of the suppliers are small and medium-sized companies. So I think the shift will not just cause extra cost for Huawei, but also put at risk so many jobs in the US. And it's quite unfortunate and unfair to the employees of all those US companies and their family members. So this is really unfortunate.

Yeah, I don't see, at this moment, I don't see having seen any automatic... because we've been doing a lot of things in the past couple of years, so many years, and we try what we can. However, it seems that the problem didn't happen just now, and I believe that it won't finish with this administration.

Yeah, before I talk about what the government and the business community can do, I'd like to share with you some figures in our industry. Now we are talking about 5G. In our industry, we evolved from 1G, 2G, 3G, 4G, and then into 5G. 5G is for the first time in human history that we achieve a single global standard. The innovation and the technology is so expensive nowadays, so we don't want to get back to the past generations. Now we are talking about 6G. We want to maintain a single global standard that will greatly help us to reduce the cost of innovation and speed up the adoption of new technologies to the world. So we hope that the politicians, the government, can understand the fact of technological innovation. Because here we talk a lot about how to leverage the innovation to grow the economy, to develop our society. So we should fundamentally understand the fact of innovation and figure out how to support the global innovation.

Yeah, to be honest, it's quite hard for us to deal with this situation with the US because we've been trying a lot and it doesn't work. So now our strategy is just to focus on the rest of the world. And we take seriously the security as a key consideration in our business, and to work with different governments like the European countries for an exact solution to seriously address these concerns. But for our business plans, we do have an idea. We have a broader view on the future, on the next decades, and we believe that we will catch up with the digital transformation as a huge opportunity, and that's our long-term plan.

To be honest, we are not able to develop a long-term plan. But I do have a question to ask: without strong innovation, without open competition, what's the long-term plan for the US?