Huawei Technologies is aiming to deepen its role as a global supplier of AI and 5G infrastructure for network operators.

This comes as the telecom industry faces market saturation after years of rapid expansion and basic consumer needs have largely been met.

Speaking at the Mobile World Congress (MWC) in Shanghai, Huawei deputy chairman Eric Xu Zhijun said the industry must look for new growth areas.

He highlighted four opportunities: serving new user groups like live-streamers and delivery workers, increasing access to high-definition video, enabling intelligent connected vehicles via 5G, and expanding fiber-to-the-room networks to support small business digitalization.

Xu expressed Huawei’s willingness to collaborate with global network operators to drive sustainable growth.

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🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Global telecom saturation forcing industry-wide strategic pivots

Huawei’s assessment of telecom industry stagnation is supported by multiple industry analyses showing minimal growth prospects.

The global telecom market is projected to grow at just 2.9% CAGR through 2028 according to PwC research, with revenues expected to reach only US$1.3 trillion despite continuous infrastructure investment requirements 1.

This slow growth environment is pushing all major telecom players, not just Huawei, to seek new revenue streams beyond traditional connectivity, with operators worldwide looking to transform into “full-stack technology suppliers” to remain relevant 2.

The industry faces a fundamental challenge where core services like voice and basic connectivity have become commoditized, making it difficult to increase prices while still requiring massive capital expenditures for network upgrades and maintenance.

Market saturation is particularly evident in developed markets where, as Huawei’s Xu noted, “basic consumer needs are met,” forcing companies to target specific customer segments like live-streamers and delivery workers.

2️⃣ AI and advanced connectivity emerging as telecom’s survival strategy

Huawei’s emphasis on AI-driven solutions represents an industry-wide strategic shift that multiple research firms identify as essential for telecom’s future viability.

Deloitte reports that telecoms are increasingly focused on leveraging generative AI to enhance operational efficiency and develop new services, with industry-wide AI infrastructure investment estimates ranging from hundreds of billions to over a trillion dollars 3.

This pivot toward AI isn’t merely optional. McKinsey’s research indicates that AI implementation could improve workforce productivity by 15% to 25% across core business functions, helping address the projected $28 billion gap in free cash flow facing US telecom companies by 2028 4.

The focus on intelligent connected vehicles via 5G that Xu mentioned aligns with industry projections showing IoT and specialized connectivity solutions as key growth segments that can offset declining revenues from traditional services.

For companies like Huawei facing geopolitical challenges, the AI strategy has proven particularly effective. Despite US sanctions, Huawei reported revenues of approximately $118 billion for 2024, representing a 22% year-on-year increase driven partly by its diversification into AI technologies and chips 5.

3️⃣ B2B market emerges as telcos’ most promising growth frontier

Huawei’s strategic focus on helping carriers “achieve sustainable growth” through specialized solutions reflects a broader industry recognition that business customers offer more promising opportunities than the saturated consumer market.

McKinsey research shows that while consumer markets stagnate, ICT revenues in the B2B sector grew at an impressive CAGR of 15% from 2017 to 2022, making it a critical focus area for telecom operators seeking growth 6.

Xu’s specific mention of “expanding fibre-to-the-room to support the digitalisation of small businesses” directly addresses the SME market, which McKinsey projects will generate $56.2 billion annually from fixed internet access by 2027, up from $47.2 billion in 2023 6.

This B2B strategy requires telecom companies to develop more specialized, industry-specific solutions rather than one-size-fits-all connectivity offerings, explaining why Huawei emphasized differentiated approaches for different carrier environments.

The focus on high-definition video supply that Xu mentioned connects to enterprise needs, as businesses increasingly require advanced video capabilities for remote work, telemedicine, industrial monitoring, and other specialized applications driving bandwidth demand.

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