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Telecom industry: Keeping pace with next-gen tech

The telecom industry is transforming before our very eyes. And in many instances, there are no hard-set rules for the new digital platforms, tools and lifecycles in which they live.

2017-12-05 11:12:04 - From the Print Edition

In this industry therefore, more than any other, embracing a strategic, forward-looking business model is critical to survival and success. The transformation that has gripped the landscape presents you with challenges, risks and opportunities as never before.

With continued pressure from new players entering the market, operators must continually find ways to stay ahead of the game. Strategies include investment in next-generation technologies and alternative network sourcing arrangements.

Despite - or in some cases, because - of the continuing uncertainty and volatility in the global economy, there are major opportunities for telecom operators. Each company's ability to identify and seize these opportunities depends critically on its ability to understand and manage risk. Unless your growth strategy has a solid underpinning of risk management, it will never be truly sustainable. There are new opportunities emerging, provided companies are willing to take those risks and make the bold strategic choices that are required.

Miroslav Majoros, Telekom Romania: We aim to provide services fitted to the new IT&C culture

The economic growth registered by Romania this year is amazing as a phenomenon and unexpected in speed and growth rate, Miroslav Majoros, CEO Telekom Romania, told The Diplomat-Bucharest.
"Nevertheless, this is the time of fast sales, of dynamic providers," said Majoros. "We adjusted to the moment, by launching 4G unlimited mobile internet at an unbelievable cost and by revolutionizing a part of the fundamentals of the contract's institution: the minimum contract period and the cancelation tax, which we erased from the contracts with the SME sector. This is how confident we are about our network and quality of services.

"As I am sure you have heard, Telekom Romania announced an absolute premiership: 4G unlimited internet from five Euro per month, for Telekom residential and business customers. I will give you some details further on. With the new offers for the residential customers, we take the #Netliberare promise to the next level, offering them a truly unique communication experience. In premiership in Romania, the customers benefit from truly unlimited mobile internet, on any Telekom mobile services subscription. This is the result of the promise launched this spring, of releasing the internet for all the users, but also of our prolonged efforts of having a performing data network."

According to its CEO, proceeding from the needs and challenges of the customers in the business segment, Telekom Romania changes the traditional conventions and introduces a new model of partnership with its entrepreneur customers, based on simplicity, transparency and predictability.
"Along with the launch of the new offer dedicated to entrepreneurs, Telekom Romania brings - through its Freedom portfolio - unlimited mobile communication with unlimited 4G internet, unlimited minutes and SMS, from five Euro per month, in subscriptions without minimum contract period and without cancellation fee," said Majoros. "Furthermore, following performance testing of all mobile networks in Romania conducted by independent audit company P3 communications in August this year, Telekom Romania achieved the highest score in mobile data services. The P3 Score represents a widely accepted and internationally applicable scoring method to assess network quality and performance."
The network expansion - on both fixed and mobile segments - has been a key priority for Telekom Romania over the last two years.

"We more than doubled our LTE coverage in less than one year, continued our initiatives to modernize and optimize our mobile networks and accelerated the roll-out plans so as to offer Telekom customers a better experience using our services, every day," added Majoros. "We can now clearly see the results of our efforts, which combined intelligent design, careful planning and successful execution. This certification confirms that we have made the right steps in delivering on our strategy to provide our customers best-in-class services and an enhanced experience."

From Majoros' point of view, the challenges are represented by competitors, regulatory matters, as well as unexpected incertitude regarding the fiscal legislation, updating and upgrading the technologies in the networks.

"But with the right attitude and decisions we will prevail. For example, we put a strong foot into the sector of banking services in our partnership with Alior Bank.
"Telekom Banking, the newest digital financial project in Romania, developed within the partnership between Telekom Romania and Alior Bank, one of the largest banks in Poland, aims to meet the needs of consumers for fast, easy-to-use products and services, available wherever and whenever.
"Telekom Banking is the result of Telekom Romania′s promise to support the creative freedom of its customers and partners in everything they do. We speak about a banking services offer willing to meet the fundamental expectations of its clients; banking services designed to cherish and value the creative potential of its clients. What we aim is to provide services fitted to the new IT&C culture that we live in today. Setting you up with all the possibilities that new technologies offer means to exploit the possibility of accessing today′s innovation. The banking experience of Alior Bank and the technological and innovative vision of Telekom Romania made possible the birth of a banking services offer dedicated to the residential segment, capable of shaping the future of the Romanian financial and banking segment."

Furthermore, Majoros said his company had a "vivid year", they "did a good impression and made some relevant steps."

Telekom Romania has three strategic directions: the development of the mobile networks, the extension of the FTTH infrastructure, and the quality exclusive TV content for customers.
"Telekom Romania is one of the top three players on the local market of IT solutions integrators based on revenues," said Majoros. "This is a totally special direction, the IT system integration, besides the Smart City concept and projects, which represent a fairly good business opportunity.
The telecom industry will develop for sure, because we have a technology which is bringing something we all consider as elementary need: communication."

According to financial results released in 2016, the consolidated revenues of Telekom Romania were of 984.7 million Euro, one million Euro more than in 2015: "In 2016, we continued to focus on our key-objectives: growth on convergent segment and TV services, as well as offering attractive mobile services. The wholesale segment positively contributed to the results. In 2017, we've continued focusing on generating more value to our stakeholders, our customers and shareholders, as well as consolidating our position on all segments of the local market. For the Q2 of 2017 we reported consolidated revenues of 235.5 million Euro and a higher adjusted EBITDA compared to Q1 and the second quarter of 2016, the fixed segment contributing more in this regard. The FMC services continue to grow both in terms of customers and revenues; the wholesale segment demonstrates the same positive trend. In the mobile segment, our business customer base continues to grow."

Dragos-Mircea Rebegea, Ericsson: We have great expectations for Romania and are very optimistic about its future development.

Romania has a great opportunity to benefit from the digitalization of industries, boosting its growth rates even more, according to Dragos-Mircea Rebegea, Country Manager, Ericsson Romania.
"This is in line with Ericsson's latest industry forecasts which foresee for Romania an 8.9 billion USD growth potential for the next ten years due to IoT and digitalization boosting the ICT sector," Rebegea told The Diplomat-Bucharest. "Part of this will be enabled by the 5G technology adoption which will create an ecosystem of services estimated at 3.3 billion USD by 2026. So, we have great expectations for Romania and are very optimistic about its future development."

When looking at the ICT market, Rebegea sees that the fundamentals of their business remain strong, people are increasingly using mobile broadband and demanding higher speeds and data: "We also see that more and more industries are embarking in the digitalization of their processes to become more efficient. Furthermore, key future developments, like autonomous cars, smart cities, rely on connectivity as a foundation. In this sense we are confident that ICT continues to be the force that will transform our lives. However, right now we are in a challenging market where operators continue to be cautious with investments in equipment as their revenues overall have come under pressure."
According to Rebegea, ICT industry is constantly transforming and, as a leading player in this field, Ericsson is also continuously evolving.

"Only in March we defined our new focused strategy and announced a new business structure to better enable service providers to expand their business across industries," said Rebegea. "During this year we've seen a stronger focus on evolution to 5G. In our recent survey about 5G readiness, we see that 78 per cent of respondent operators are involved in 5G trials this year, compared to only 32 per cent last year and 28 per cent of the respondents expect to deploy 5G next year. In line with the company strategic focus on technology leadership in Romania, we are proud to have conducted in June, together with our partner, Deutsch Telecom, the First 5G Live Demo in South Eastern Europe, achieving a record speed of 24Gbps. This is a first step on the local market towards a global trend and we at Ericsson are committed to position Romania for an early adoption of the technology of the future."

Ericsson Romania's country manager sees a very strong focus on 5G, IoT and industry digitalization. "According to our latest Mobility Report, on average more than one million new mobile broadband subscribers will be added every day up to the end of 2022," said Rebegea. "4G will be the dominant technology for mobile broadband in 2018, becoming the single mobile technology with the fastest growth (adoption rate) in history. We also see a great potential on the Internet of Things (IoT), as the number of connected IoT devices is growing, driven by an increasing range of use cases and business models and supported by falling device costs. We expect that, by 2022, there will be around 29 billion connected devices, of which some 18 billion will be related to IoT (cars, machines, meters, sensors, point-of-sales terminals, etc.)."

Ericsson has taken a broad approach with the ambition to lead and drive the digitalization and transformation of the telecom industry as well as of other industries.

"This year we have defined our new focused strategy and announced a new business structure to better enable service providers to expand their business across industries," added Rebegea. "Our task is to make our customers successful, which in turn will make us successful. Under our new strategy we will drive the development of market-leading solutions, fully leveraging the potential of 5G, IoT and cloud. Right now, operators are evolving their existing LTE networks to LTE-Advanced or Gigabit LTE to achieve fibre-like mobile broadband speeds and, moving beyond 2018, we certainly see 5G as a key growth vector, as operators start with commercial trials and launch of selected services. We estimate that in 2022, around 15 per cent of the world's population will be covered by 5G. In Romania, the strategic directions are perfectly aligned with the corporate direction and follow the same path of bringing the leading-edge technology to our business partners who can share it to the wide population. As Romania is traditionally a competitive telecom market, we expect to see this too in the coming years with the introduction of the IoT and 5G on a large scale. There is cost for operators to upgrade their networks, but the payoff will justify the investments. According to a recent study done by Arthur D. Little and Ericsson, for Romania in 2026, the 5G market potential is 3.3 billion USD out of which the traditional telecom operators can secure 1.6 billion USD."

Despite the continued cautions in investments, during 2017 there has been an increased operator focus on 5G and IoT, digital transformation, and core network transformation, according to Ericsson's representative.

In 2022, Ericsson estimates that there will be around ten billion mobile subscriptions (including cellular M2M) and over 6.8 billion connected smartphones.
As mobile data traffic and the number of devices continue to increase, operators need to invest in infrastructure that supports throughput, performance and the large volumes of devices. While quality of service is the foundation of success, some operators differentiate by investing in high performing networks, some by swiftly adapting to market conditions and others by being first in the market with uniquely designed service offerings.

Liudmila Climoc, Orange Romania: Romania is becoming the IT hub of Europe

In two decades since they have commercially launched the mobile network, Orange Romania has made tremendous steps forward.

"It has been a journey through which we have made the huge leap towards digital transformation," said Liudmila Climoc, CEO Orange Romania "For instance, in these 20 years a new generation came along - the digital natives. Content consumption habits were revolutionized and the amount of information that is now available to us is infinitely larger than two decades ago. Technology redefined our learning processes and connectivity brought us more information faster.

In this extraordinary set-up of the digital revolution, connectivity played a major role in leading the way towards innovation. Twenty years ago, we started offering voice services and right now Orange has become an integrator, leading the digital transformation process. We are now offering on top of seamless connectivity, productivity and simplified processes, together with integration. The presence of Orange Romania in these 20 years is the result of tremendous teamwork that has dedicated its efforts to ensure the best connectivity and the best customer experience, regardless of the social and economic context that has known a great deal of change in this period. We have evolved together with our customers and we have developed our products and services taking into account their ever-growing need for connectivity. Our performance in these years is directly linked to our capacity of providing a reliable network, relevant services, personalized offers, together with our capacity to innovate, in order to meet up expectations."

In these 20 years, Orange has reached numerous milestones on the Romanian market, such as the EDGE technology - which was an European premiere at that moment within the Orange Group. Another premiere for Orange was the HD Voice International and the 4G and VoLTE services.

"We also introduced premieres when it comes to connectivity," said Climoc. "Orange Romania offered the first multimedia services available for the mobile phone and recently we have launched the first smart city concept proof - Alba Iulia. We have innovated in customer experience. We have launched the first smart store that was fully digitalized, offering a complete offline-online integration. Now we have 25 smart stores and moreover, we are the first operator to have introduced the Care Centre concept in Romania. And the more technology became part of our everyday lives, the more users expressed the need for simplicity. In order to provide simplicity, we have aimed for integrated communication services. Thus, in 2016 we have become a convergent operator, widening our offer to a complete one for the consumer from mobile services to fixed services. Also, we have launched Orange Money, a payment service that transforms the smart phone into a wallet."

Orange Romania has a very important role in leading the digital transformation in Romania, starting with the productivity solutions for business to business partners and leading towards smart territories.
"We now focus on connectivity, the backbone of every digital initiative, regardless of the industry branch," added Climoc. "We aim to develop more and more end-to-end solutions that bring added value in the lives of our customers and in the business environment. The most important challenge for Orange Romania since I took over the CEO mandate was to grow what we seeded so far. 2016 was an intense year in terms of activities, with new services and offers brought to Romania. We started to offer our customers the experience of the convergence, and came with an answer to their need for simplicity - one operator for all their communication needs, one invoice, one customer service point, rich content, seamless connectivity; we launched Orange Money - we have made one more decisive step towards offering wider digital services. For the moment, our priority is to develop this service by diversifying the functionalities and by increasing the number of merchants allowing transactions with Orange Money. To reach our objectives, there are some clear pillars that we rely upon. We have the most extensive 4G coverage and we aim to consolidate our network performance and coverage."

Another challenge for Orange Romania was to digest all this complexity and come up with very segmented solutions for customers.

"We have to turn the complex services into simple and segmented solutions for their different needs," said its CEO. "In order to do that, first of all we have to listen and constantly improve the relationship we built in time with our customers, to keep up with the fast-changing needs. This is the essence of our listening and responding strategy and the reason why we started to transform the network into a customer-centric one. In order to achieve this, we have reorganized our processes. For instance, we have included the customers in the network expansion process. These challenges are all related to our ambitious objective of reducing the digital gap. The digital differences between the rural areas and the urban ones still exist, and it is our mission to contribute to decreasing them. First of all, in order to reduce this gap, our mission is to enable Romanians to be seamlessly connected, by offering the best quality of service for mobile data through the 4G network. This implies a continuous 4G coverage expansion process, increase of traffic capacity and permanent network optimization. This year we have announced the full urban 4G coverage. Our network is fully prepared to serve its customers with the highest Internet speeds and the best quality of services. Another way to decrease this gap is to democratize the access to technology. We have attractive offers that provide access to affordable smartphones, a wide portfolio of subscriptions and services, offering smartphones and tablets for zero Euro and the possibility of payment in instalments. Our offer also includes refurbished smartphones and fidelity bonuses, in order to offer our customers access to technology for affordable prices."

According to the quoted source, the way to decreasing the digital gap is to become a digital partner for customers. "That is why we have developed programs and tutorials to promote digital literacy. Orange expert advice, digital education initiatives - Parinti la scoala(Parents at school) - the program is aiming to identify the difficulties experienced by those who may still be unfamiliar with new technology practices, such as using the internet on a laptop, searching on Google, using a smartphone or social networks, etc. We organized workshops for parents, in order to offer them the opportunity to find out the answers to their questions."

Climoc also said that Romania is becoming the IT hub of Europe, a sort of Eastern Silicon Valley of Europe, so economic prospects are good, driven also by the interest in telco services consumption. "The reason for this is the fact that connectivity is the liaison to enable people to grasp the opportunities brought by digitalization. In this context, in order to have a sustainable industry growth that assures the backbone for consumers to take advantage of the digital opportunities, our objective is to consolidate our business growth. Orange is consolidating its position with a strong performance during eight consecutive quarters."

Up to now, Orange has invested in Romania almost three billion Euro. Climoc explained: "In 2015 when we have launched the Essentials 2020 strategy we have committed to investing up until 2018 half a billion euro. These investments are directed to further strengthening our network and to consolidating the customer experience. Hence, we shall focus in the upcoming period on processes that bring simplified interactions, on introducing new useful innovations for our customers. The recent launch of Voice over Wi-Fi is a great example. After one year of tests, we have commercially launched the service that provides crystal clear voice and instant call connection also over Wi-Fi, even in those areas where the signal indoors could be less strong.

"At the core of our strategy for 2020, offering the best customer experience has been our focus and in order to do that, we have to make sure that Orange is an enabler, connecting the clients with the opportunities brought by the digital world. In order to do so, seamless connectivity becomes compulsory. Therefore, we have been focused on expanding the 4G coverage. This year we have announced the full urban 4G coverage. All our efforts are subsumed to listening to our customers′ needs and developing tailor made, simple to use products and services to match their expectations."
According to Orange Romania's CEO, the authorities have an important role to play within the telecom sector, providing transparency and predictability for the operators. "In order to encourage the investments, the new Infrastructure Law has to have clear directives. We need to clarify the tariffs for using various types of infrastructure.

The evolution of the industry is directly linked to the innovation pace and the level of investments within this area. In these 20 years of activity on the Romanian market, we at Orange have brought many innovations to the market, sometimes even pioneering. Also, our partnership with Innovation Labs has a long tradition, expressing our support for start-ups. We have just announced a new a program supporting innovation - Orange Fab, an accelerator for the start-ups. Another important factor is the rhythm of adoption by the customer of all the new technologies and innovations brought by all the players of the market."

Seamless connectivity will continue to be prominent in Orange's priorities and a powerful and reliable network can open new horizons, such as the smart cities area or the smart territories.
"Our objective is to sustain our efforts so far and to further invest in consolidating our leadership in this field," concluded Climoc. "The future of telco market brings fantastic opportunities. Internet and connectivity are now the new electricity that shaped the world into what we know today, since the industrial revolution. Digitalization is shaping not only business; the world is talking about sharing economy and the core of this shift is connectivity. Networks are the backbone of this shift in which organizations and consumers find themselves. The increase of IoT creates opportunities for smart concepts, smart homes, smart cities, smart buildings."

Vodafone Romania to implement a new business strategy

The new CEO of Vodafone Romania, Murielle Lorilloux, said the company will increase its headcount, which currently stands at around 2,500, as part of the plans to implement a new business strategy that relies on three pillars.

"I'm really impressed and happy about what I've seen so far in Romania," said the executive, adding that her three children are staying with her in the country, Business Review reads.
Lorilloux said that her mandate's priorities will be the usage of big data, the expansion into homes and further development of the digital operations. She said that the company aims to further leverage its current assets.

On big data, she explained that the telecom operator has close to ten million customers and the company will try to get deeper insights and use analytics in order to provide more personalized services. She says there will be a "more sophisticated approach for each customer" and the that the offers are starting to become more segmented.

On the expansion into homes, Lorilloux said that the operator will focus more on providing services, including content on demand, for families. She says that there will be a greater emphasis on video content, although she did not say clearly if Vodafone plans to sign new deals with streaming platforms or to launch its own operations in the TV industry. The company already has distribution deals with HBO GO and Netflix. "We will continue to do this," said the CEO on the plans in the content segment.
On digital, the CEO said that the ultimate goal is to provide better productivity tools for companies and individuals, citing the advent of the fourth industrial revolution that will bring a further integration of tech in the economy.

Lorilloux said that Vodafone Romania is a "very strong company", with a "very good quality network" and a "very good leadership team".

Asked during a press meeting with journalists what her leadership style is, she said she is listening a lot and focuses on fast decision making while ensuring quality of execution. Talking about the investment plans for 2018, she said the company will make "double-digit investments" to the tune of millions of Euro to expand the network, develop the three pillars, and hire more people.
"I would not expect new operators to come," speaking about the local telecom market, adding that the average number of operators across Europe stands at three or four. Asked about 5G investments, she explained that this is a long-term arrangement for the local market. For instance, companies are waiting for telecom regulator ANCOM to tender the spectrum for 5G and this should in theory happen next year.

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