With more than 20 years of telecom history-making in Romania, the companies in the field, under the skies of keen local competition with significant projects to be launched, are also keeping an eye on the broader European digital market
by Magda Purice
In this landscape, The Diplomat - Bucharest talked with the major telecommunication operators in Romania, in order to find out about this year's strategies in terms of business development, reaching clients, competition and pricing policies.
Within a highly competitive market, there are fundamental issues to be addressed by competitors, which in the client's language translates into:
Faster, Cheaper, More
It is increasingly clear to everyone that the new mobile world demands highly-equipped mobile tools. In February of this year, The National Authority for Management and Regulation in Communications (ANCOM) published in Veritel, its online application for comparing telecom offers, the compared values configuring the profile of an occasional, average and intensive mobile telephony and mobile internet user in Romania, based on the most recent statistical data processed by the Authority, for the first half of 2015.
According to the ANCOM data, an average user of mobile telephony and mobile internet configured on Veritel.ro uses 167 MB mobile internet traffic every month, sends 74 national SMS (64 on-net and ten off-net) and speaks on average 251 minutes on their mobile handset, both on-net (193 minutes) and off-net (58 minutes).
An occasional user of mobile telephony and mobile internet uses 56 MB internet traffic per month, sends 24 national SMS (21 on-net and three off-net) and talks on average 83 minutes on their mobile handset, both on-net (64 minutes) and off-net (19 minutes).
An intensive user of mobile telephony and mobile internet consumes 501 MB internet traffic per month, sends 222 national SMS messages (192 on-net and 30 off-net) and talks on average 753 minutes both on-net (579 minutes) and off-net (174 minutes).
Compared to the user consumption profile configured for the previous period, one can notice off-net traffic growth on all consumption segments, due to ANCOM's regulation of the maximum value of the mobile call termination tariffs charged by the operators, in conjunction with the mobile operators' focus on offers containing included unlimited or national minutes.
The Romanian consumer cares about money
Romanian telecom consumers are more focused on saving money than their European peers, according to an A.T. Kearney's "The Telecom Consumer of the Future" study issued in February this year. The A.T. Kearney consumer study shows that the use of digital offers across Romania does not lag behind the US and Europe at all - Romania is even above the EU average within the countries investigated. Compared to many countries in Europe, Romanians put a high emphasis on quality although their ability to pay is still low for the moment.
According to A.T. Kearney's study, overall, digital usage in Romania is comparable to the leading European economies, higher than in the USA on average, and just behind California, known for the big names for whom it is home, such as Apple, Google and Co. Nevertheless, Romanians' use of their phones is quite different to the United States. They seem to be more focused on saving money by using apps for calls (66 per cent in RO vs. 46 per cent in EU were using apps in the last three months) and buying physical goods like electronics, books and clothes, online (42 per cent in RO vs. 35 per cent in EU were buying online in the last three months). On the other side, Americans are spending more time on the Internet (36 per cent in US vs. 27 per cent in RO of total usage of the smartphone) and use more digital purchasing options (53 per cent in US vs. 47 per cent in RO were downloading digital content such as music, games, videos, etc., in the last three months).
Looking at consumer spending, the study states that the Romanian consumers spend less than the European average (by about 40 per cent) and their peers in the USA (by about 60 per cent). However, the picture would be different if one would consider the actual income of Romanian citizens - after considering the purchasing power parity, Romanian consumers would jump to the top of the list. In addition, Romanian consumers appreciate quality much more than their peers in Europe. They focus on handset functionality rather than premium devices, acquired in operator shops instead of indirect retailers, while also looking for high-quality customer services. Surprisingly, 38 per cent of Romanian consumers prefer buying handset-SIM card bundles on-line while more than half are planning to buy apps in the future. This is key since we see consumers who are seeing operators as "their navigators in the digital world" and are willing to pay about 70 per cent more for their broadband access and 23 per cent more for digital services.
Telekom Romania: upcoming years will be about more sensor connected objects
Combined efforts: Partnerships and synergies
In terms of infrastructure, the company focuses on continuing the development of fibre for fixed and 3/4G for mobile. However, in parallel, the national agreement with Orange for access to its 4G and 4G+ networks will enable Telekom to also win new customers, who will thus benefit from extended 4G coverage and higher quality of the corresponding services. The agreement with Orange represents an immediate support for Telekom plans, but on the medium and long term it is expected to continue developing its own infrastructure.
In February this year, Telekom Romania announced a major step in its mobile broadband strategy following a national roaming agreement with Orange Romania. Based on this agreement Telekom Romania customers will be able to roam on the Orange 4G/4G+ network, benefiting from extended 4G coverage and higher quality of 4G and 4G+ services. The national roaming agreement concluded between Telekom Romania Mobile Communications S.A. and Orange Romania S.A. covers 4G and 4G+ data as well as 4G voice over LTE services, providing Telekom customers an improved experience of mobile broadband services. Thus, Telekom Romania customers will be able to enjoy the 4G and 4G+ mobile communication technologies even when they are out of the Telekom Romania Mobile 4G network coverage, through the Orange 4G/4G+ network, which covers 72 per cent of the country population and 96 per cent of the urban one. The transition between networks will be seamless and will not require any additional costs for the customers.
The benefits of this project will allow Telekom Romania to continue investing in areas which are not currently covered and promoting competitive offers and services to the benefit of its customers. Independently of the national roaming agreement, Telekom Romania and Orange Romania have signed a wholesale contract as well, covering access to Telekom′s urban fibre optics network. This enables Orange to enter the market for fixed communication services and to offer customers fixed broadband as well as enhanced TV services.
The One-Stop-Shop philosophy
"We are working on the services segment, therefore all our efforts are targeting customers' satisfaction. But on a fierce market, like the local one, this is not enough. Therefore, we are focusing on customers' excellence and all our initiatives have this mindset at its core. It is essential to think this way and act in this direction, especially because we are not planning to enter into a price war and, therefore, we need to make a strong statement in terms of service quality and customer delivery," Miroslav Majoros, CEO Telekom Romania, told The Diplomat - Bucharest.
Along with MagentaOne, the company's CEO said that they have introduced new standards for the integrated customer offers, such as ten seconds, in average, waiting time in call centres. "We have highly skilled professionals working in stores and in contact centres, who guide customers in choosing integrated services tailored to their specific communication needs. We also have in place quality check contacts after service installations to ensure the best quality service level. This year we will continue on this path and we will introduce several other initiatives with focus on customer excellence," Majoros said.
The company reported over 208,000 MagentaOne customers at the end of 2015 and they expect this figure to grow constantly in the following period. The plans are to improve its fixed-mobile convergent portfolio, through its Magenta One platform, by offering customers simplicity, convenience and value for money for both families and businesses. For the residential segment, television plays an important role and becomes a key factor when choosing the provider. On this segment, the company says that it delivers full experience both in terms of TV content and functionalities. As for the business segment, there are MagentaOne offers with cloud component that complete the fixed and mobile solutions, the applications and the turn-key IT integrated solutions, innovative cloud and M2M solutions, meant to generate competitiveness for business.
Internet of Things
"We live in a hyper-connected digital economy and our role is to become enablers of solutions which help companies perform in this context and people to enjoy a more comfortable life with the help of technology. We are highly involved in delivering Internet of Things services, either as part of smart cities projects, or focusing on machine-to-machine solutions, which ensure the interconnectivity of devices and sensors with command centres and without which IoT would not work," Telekom Romania's CEO added. The company is also innovating and very active in piloting smart cities solutions. With the expertise of Deutsche Telekom Group, Telekom can deliver smart lighting, smart parking, smart transportation solutions, even telemedicine. "In addition, we launched several innovative solutions, such as the smart tree, a wireless solution with analytics component, just to mention a couple. On the M2M segment, besides the existing solutions like GPS Tracking, in 2015, we extended our portfolio with new ones, such as vending machine monitoring and a smart office solution, as well as a new SIM management platform offering advanced SIM management functionalities to M2M customers," Majoros added.
Reaching the consumer: Shifting paradigm
"If we want to put customers in the centre of our activity, we really need to know their profile in depth - who they are and what they need. Without this kind of information, we would shoot blind bullets. We are making efforts to approach the customers in a granular manner, meaning to find out what their consumption needs are and to propose the best suited bundles. For example, we adopt this approach with the MagentaOne customers. We have offers addressing families, which can be modulated depending on the number of family members. Maybe the kids want more data and the mother more minutes for voice services or the other way around," Majoros added.
For the youngsters, the company has built a new communication platform which has a charismatic character, Pandalie, at its core. Pandalie endorses their prepaid offers and has become very popular among teenagers. Even if, as pattern and expectations, the "elderly people use more fixed voice" as a cliché and true statement, Telekom addresses each customer according to needs and behaviour : "We carefully look at every customer in particular, because without doubt there are people in the same category who are becoming very comfortable using the Internet and this is something which can work in our favour. I am not surprised anymore when I see the elderly using a smartphone or surfing the internet to stay in contact with their children and grandchildren."
Orange Romania: Investing in innovation
In the context of the highly competitive market, the Orange strategy, called Essentials 2020, is centred around the clients and connecting them to what they consider essential. "We will continue to improve our networks, build new services and launch innovative products that are in line with the ever-changing needs of the Romanian consumer," Jean-Francois Fallacher, CEO of Orange Romania, told The Diplomat - Bucharest. In brief, through the Essentials 2020 strategy adopted in 2015, Orange aims to bring technology to the service of the clients, to connect people to what is essential in their lives.
The need for convergent services
According to the French telecom operator's CEO, one major trend noticed by the company is the need for convergent services. Last year, the number of customers who declared to be interested in buying fixed internet, mobile and TV from the same provider doubled, according to the company data: their interest is mainly driven by not having to pay their invoices to different providers and by optimizing their budget. "In the very near future, we'll complete the palette of services Orange provides with fixed services. Regarding the mobile network, according to ANCOM, in Q2 and Q3 2015, Orange turned out to be the fastest network in Romania for both downloading and uploading on ANCOM's data speed measurement platform, Netograf," Fallacher said. Moreover, last summer, Orange tested 4G users' satisfaction through a dedicated app, 4G Fun Kit, where 97 per cent of customers declared to be satisfied with the Orange network.
Considering that the usage of mobile data is on an ascending trend, Orange will continue to invest in its network in order to provide 2G, 3G and 4G quality services, as Fallacher stated. "This adoption of smart devices is triggering a mobile data usage explosion and a strong demand for very high broadband. This allows for new technologies to be developed, such as the native 4G Call, so called VoLTE, which Orange launched last year. In 2015, our 4G traffic was six times higher than the previous year. 4G smartphones and tablets sales were respectively twice and four times bigger. We believe this trend will accelerate in 2016," the manager detailed.
25 billion connected objects in the digital world by 2020
Considering this trend, Orange′s strategy is to continue to invest in the Internet of Things (IoT), in connected objects that respond to people's need for movement. By 2020 it is predicted that the world will have 25 billion connected objects that will made people's lives easier, from doctors monitoring patients' heath and being able to take measures immediately, to facilitating aspects pertaining to logistics and business relates issues, where M2M will ensure the growth of smart homes and cities. One such product that Orange Romania has already launched in February 2016 is the Orange smart home solution through which the consumers can control and monitor their home from a distance, by just using your smartphone.
"The Romanian market is still young in this aspect, but Orange is leading the way by investing in educational programmes in technical and business universities, supporting start-up accelerator programmes and partnering with tech start-ups. Innovation Labs is one such programme in which we believe and have been investing for the past three years - both through our specialists who become mentors and through our technologies and solutions. The main reason we support such programmes is so that we can identify innovative products and services that have the potential of being integrated into the Orange portfolio," Fallacher stated.
As people start using their smartphones in order to save time, the manager said he trusted that mobile banking services will become a must in the coming years. "Thus, in 2016, we will launch the Orange Money service, through which clients can send money to friends, buy products and services and pay their utility bills. The connected objects require more network capabilities and less energy, so this strategy goes hand in hand with the network consolidation and expansion programme that is ongoing. Basically, all new products, services and innovations we propose to our clients, are centred around the network," Fallacher stated.
Building the smart city
A big part of the Orange group strategy is the development of the smart city concept, which involves utilizing mobile technology, sensors and cloud computing. One solution which has been implemented in Cluj involves the Wi-Fi hotspots installed on public transport buses. These hotspots have a real time monitoring platform and can be used to develop solutions for real time monitoring of environmental data such as noise or dangerous substances, traffic congestions or even ticketing. The Orange smart home solution has already been launched at the beginning of the year. Additionally, an increased mobilization was noticed in this area not only on the municipalities' side, but also from universities, start-ups and even citizens. When talking about smart, connected objects, security is a big issue. For this, the company develops solutions or partners with other companies to provide cyber-security to their clients.
According to some other company's expectations, in 2016 the TV content services including on-demand will gain greater importance, in line with clients' need to access wherever you are and no matter what you are searching for or device you are using. The rich content offers on the market, like Orange TV Go and Movie Go Unlimited, and devices like Orange TV stick are becoming more and more popular this year, allowing easy access to favourite movies, series or TV shows on mobile devices for individual consumption, and on TV screen.
Vodafone Romania: We rely more and more on providing content
"Our main aim in our day-to-day business is to confidently connect all Romanians. We always want to provide the best customer experience and we invest heavily in providing top services to all our users. Our efforts have been recognized internationally, and the latest Best in Test certification for voice and data services earned by Vodafone Romania from the independent auditor P3 Communications vouches for our strategy," Ravinder Takkar, president CEO Vodafone Romania, told The Diplomat - Bucharest.
Industry 4.0 is now picking up speed in Romania
Vodafone Romania launched its new portfolio of business solutions under the Industry 4.0 umbrella and offers its users tailored services ranging from Connected Cabinets, Digital Media Signage, and Video Surveillance as a Service, to Managed Asset Tracking. Industry 4.0 is a collective term which describes the fourth industrial revolution. It comprises automated manufacturing and data exchange technologies which come as a natural next step after the digital revolution, according to company's data.
The Connected Cabinets solution enables businesses to constantly manage their stock and have visibility on their most capital-intensive assets through an online and mobile-ready platform, with real-time indicators, such as exact location, functionality, temperature and weight.
"With the new Media Signage service, businesses can communicate and manage digital media on their own displays in an efficient manner, remotely, online and real time. The solution also allows improved customer interest and engagement tracking for their own or third-party advertising displayed," the CEO of Vodafone Romania explained.
Video Surveillance as a Service is a system that works via the Vodafone cloud, through a secured platform, integrating mobile and third-party video features. It allows for an integrated and virtualized video control anytime, on any device, with real-time and easy web-based administration, as well as remote access. The latest Managed Asset Tracking service enables the business client to visualize the real-time positioning of its fleet, optimize sales and distribution routes as well as improve fuel and time consumption. Aside from the real-time locator component, the service also displays the estimated time of arrival of the vehicle.
Aside from the Industry 4.0 launch and being the first mobile operator in Romania to cut the cable needed to access the Over-The-Top content available in the HBO Go application, Vodafone Romania also pioneered the market by providing all users in Romania special Supernet Week-ends of free, unlimited data. "More than that, Vodafone Romania's certified network became guaranteed," Takkar said.
In terms of access to content, the customer's view of the TV market and video content behaviour is changing and Over-The-Top services are playing an ever more important role. People watch more and more video content on their mobile devices, whenever and wherever they want. "The Vodafone's HBO Go proposition is just one of the steps made in this direction, followed this year by the wealth of content available to all Vodafone users travelling by Metro, through the Supernet City, one of Europe's largest free internet areas, with content ranging from TV, music and news to online shopping," Takkar added.
Fast developing competitors and several surprise newcomers
Recently, the international media announced that Enel aims to spend 2.5 billion Euro on a fibre broadband network in Italy. The movement, through which the energy provider plans to equip the country′s homes with fibre optic cables, could put pressure on Telecom Italia to get going with its own plans for building a nationwide fibre broadband network. According to a release of the Italian company, Enel aims to cover 224 cities in phases with the broadband service, selling wholesale capacity on the network to telecommunications carriers, according to a statement from the company issued in March this year. Enel said its board has discussed a partnership with Vodafone Group Plc and VimpelCom Ltd. unit Wind Telecomunicazioni SpA and is open to working with any retail carrier. Access to Enel's networks could make it easier for Telecom Italia's rivals to provide faster Web access. Demand for faster Internet access is soaring as consumers increasingly use online services to watch movies, TV shows and live sporting events.
On the local market, RCS & RDS is also growing and speeding. The latest release of the young yet strong developing telecom company RCS & RDS, announced that the company offers its Digi Mobil clients 30 Gbytes, at higher speed, within the 4G network. The company also announced the extension of its national roaming agreement until 31 March 2017 for mobile voice and data services. Digi Mobile users thus have the opportunity to communicate in areas outside the Digi Mobil network, Following that, once the expansion and the development of Digi Mobil is achieved, the national roaming agreement will be cancelled. According to company data, the outside coverage of Digi Mobil′s 3G network rose by ten per cent during 2015-2016, reaching 94 per cent of the population in the country. RCS & RDS owns the only news-based television in Romania broadcasting in full HD - Digi24 HD, with eight regional stations. RCS & RDS also competes with UPC Romania.