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New Digital Business Models Driving the Softwarization of the Network

Marc Halbfinger

January 2018

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“Here To Serve”

Headquartered in Hong Kong

PCCW consolidated 2016 Revenue: US$4.9 billion

HKT 2016 Revenue: US$4.339 billion

Employees: 25,000

HKT is listed Trust on the Hong Kong Stock Exchange as code 6823

PCCW is listed corporation on the Hong Kong Stock Exchange as code 0008

China Unicom is a significant shareholder of PCCW

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5+ billion minutes of voice traffic annually

630,000 Kilometres of diverse cable capacity globally

16 Tb/s of global fibre capacity

Tier 1 Transit free network

Largest IP Gateway to China

200+ Gbpsprivate connectivity to major China carriers

TOP 5 Ranking for Global Peering

55 locations worldwide

Network presence in over

3,000 cities and

150 countries

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Our solutions provide customers with new capabilities & improved levels of efficiency and flexibility

Value Added Services

Core Services

Global Development Services

Leverage the extensive

knowledge and experience of HKT

and the PCCW Group to support global customers

A single integrated platform delivered from the cloud for

global UCaaS

Global UCaaSSolutions

Superfast delivery of content around

the world

MediaSolutions

Flexible cloud-based IT and

communications applications

Cloud Infrastructure & Applications

Connectivity and solutions for MNOs across

technologies and global markets

Global Mobility Solutions

Solutions to monitor, optimise networks and free

up IT resources

Managed Network

Network Security

Expertise, intelligence and infrastructure to

secure assets from cyber attacks

Data ServiceData Service

Global Fibre and Satellite NetworkGlobal Fibre and Satellite Network

Voice ServiceVoice Service

Cloud based Applications – Enabling Digital Business

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Today Every Business is a Digital Business

Speed and agility

In the digital world success requires a combination of three factors:

Integration

Consuming everything as a service

Evolving customer requirements:

•Workloads moving to multiple clouds

•Distributed applications

•Improved network performance, security & reliability

•Greater visibility & self-service

•Automation

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Carrier softwarisation has three elements

Model of

Softwarisation

Primary

Objective

Primary

ApplicationPrimary Relevance Example Impact Big Data Implications

Automation Cost-Savings

• Infrastructure

• Operations

Digitisation Productivity

• Operations

• Product and

Services

Innovation Revenue Growth

• Product and

Services

• Repetitive tasks• Standardised processes• Non-core functions

• Repetitive tasks

• Repetitive tasks

• Savings in labour costs of 16% by 2025 amongst top 25 exporting nations

• Operational automation potential to deliver 25% cost-savings

• Increased operations and organisational data gathering and monitoring

• Non-standardised• Process components with

automatable features• Capability gaps

• Healthcare

• Manufacturing

• Integration of patient data via Streams app saves UK health workers up to 2 hrs a day

• Integration Digitisation of metal processing supply chain increased productivity 50%

• Extended data gathering and oversight of complex functions

• Product management and execution insights

• Emerging market demands

• New traffic types• Emergence of non-carrier

• Retail

• Pharmaceuticals

• Stich Fix using AI platforms to provide automated style & fashion recommendations service

• BERG using machine learning and AI to support drug development and clinical trials

• Superior product / service management and control

• Increased innovation potential

1

2

3

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Automation and Digitisation

Automatic generation and collection of data over extended period

Value for Carriers

Softwarisation requires ‘big data’ capabilities

1 Novel InsightsProvide insight into previously inaccessible parts of carrier operations

2 Enhanced industry

understandingBuild a continuous understanding of carrier operations, partners and markets

3 Performance

and decision-makingLeverage data and insights from a fully informed overview of the business to support performance measurement and strategic decision-making

4 Economic valuationMore efficiently measure costs and economic value to leverage in commercial agreements and propositions

5 Customer and industry

analysisBuild a granular understanding of customer needs and industry trends

6 Network and product strategyLeverage data and insights to inform network evolution strategies and network-driven product and service development

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Four priorities for enabling carrier industry softwarisation

Priority

Alignment of

industry-wide

technology roadmaps

Long-term risks

• Facilitate commercial opportunities

• Increase evolution certainly

• Improve investment ROI

Priority

Industry

coordination towards

common standards

Long-term risks

• Increase technological feasibility• Increase network interoperability• Increase technology applicability with

third party partners or customers• Increased standardization of protocols• Reduce risk of failure

Priority

Industry

collaboration to

support a dynamic

testing, feedback

and learning process

Long-term risks

• Confidence in standard development

• Confidence in software-based product development

• Insight into industry-wide priorities

• Value-adding growth opportunities

Priority

A roadmap for

retiring legacy

networks

Long-term risks

• Aligned progression across the industry

• Support interoperability and coordinated transition

• Benefit knowledge sharing and learning processes

• Support a reduction in network failure

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Rapid Transformation of Network, Products and Services

Virtualisation & Automation of Networks

Cloud-based Applications

Integrated & Bundled Products

Unified Management Console

SDN, SD-WAN, NFV

Virtual Network Functions, Security as a Service, UCaaS, XaaS

API Integration

Network and Applications. Configure, price, quote, order, provision, manage

Software is now at the core of

Product Strategy

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The Move to Automation and Customer Self Service

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The Softwarization of the Network

Driving the demand for a different approach

and skillset for the carrier industry

Increasing focus on software infrastructure

development is itself driving an increased

demand for more bandwidth to facilitate real-

time collaboration, ubiquity, compute, etc.

Increasing focus on complex apps to manage

capacity, collaboration, orchestration,

ubiquity, computing power, etc. etc.So

ftw

are

-base

d Infr

ast

ruct

ure

Physical Network Infrastructure

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Embracing the Platform-Based Business Model

Transforming network services to digital platform services• Value creation

• Economies of scale

• Improved customer experience

An ‘enabling partner’ in the digital ecosystem:• Extensive partnerships for product & distribution

• Open API integration

• Highly automated, on-demand

• Customer self-service

• Secure transaction environment

• Dynamic global digital distribution

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As business-criticalapplications and content

move to the Cloud, Enterprises need

increased performance, predictability and security.

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Software + Network + Community

[fuelled by new organizational behavior]

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Software-Defined Interconnection®

With Console Connect you can easily and quickly

spin up virtual private Layer 2 and Layer 3

connections, regardless of location or technical

knowledge.

Bypass the public internet and directly connect to

the cloud applications, partners and locations that

are important to your business.

• Improved performance

• Access and global reach

• Enhanced visibility and

monitoring

• Reduced complexity

• Reduced costs

• Time-savings

• Reduced security threats

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Interconnection Made Easy

• 150 countries, 3,000 enabled locations

• Access a global ecosystem of SaaS and cloud providers

• Get started with just one port and one cross connect

• Interconnect in just seconds

• Simple user interface on desktop and Android and iOS apps

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Performance and Availability

• Bypass the public internet for resilient

and consistent performance

• Easily monitor connection performance

• View bandwidth allocation and utilization

• Dial bandwidth up and down as needed

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Global Community Platform

• Connectivity begins with people

• Access a community for network engineers by network

engineers for knowledge-sharing, troubleshooting and

growing your business

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Your Clouds, Your Way

• Quickly and easily connect to

major cloud service providers

• In a world-first, directly connect

between your clouds with CloudNexus®

• Achieve true multi/hybrid-cloud environments

across multiple locations and providers

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PCCW Global Platform Approach

Strengthening our Digital Partner Ecosystem and Marketplace

Application Providers Telco & Cloud Players

Security SD-WAN Networks

ERP AppsBig Data IoT

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THANK YOU

Regional Contacts

AfricaJohannesburg, South AfricaTel: +27 11797 3300Email: africa@pccwglobal.com

AmericasVirginia, United StatesTel: +1 703 621 1600Email: americas@pccwglobal.com

Asia & CISHong KongTel: +852 2888 6688Email: asia-cis@pccwglobal.com

EuropeLondon, UKTel: +44 (0)207 173 1700Email: europe@pccwglobal.com

Paris, FranceTel: +33 (0)1 42 66 08 35Email: europe@pccwglobal.com

MENADubai, United Arab EmiratesTel: +971 (0) 4 446 7480Email: mena@pccwglobal.com

SSAOSingaporeTel: +65 6429 3988Email: ssao@pccwglobal.com

Contact

marketing@pccwglobal.com