Focused technology choices - Analyst & Journalist Briefing 2014
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This document discusses technology choices and strategies for a telecommunications company. It advocates selectively pushing new technologies like voice over LTE and 5G while focusing on continuously improving quality for customers and reducing costs. Key areas of focus include retiring legacy systems fast, improving network quality, and transitioning to an all IP infrastructure to reduce complexity and costs over time.
Focused technology choices - Analyst & Journalist Briefing 2014
- 1. FOCUSED TECHNOLOGY CHOICES Joachim Horn, Group CTIO
- 2. How we win Focused Technology Choices Value Champion Step-change Productivity Winning People & Culture Selectively push new technologies & innovation Quality up – where it matters for our customers Drive down costs continuously in all areas Key focus areas 2
- 3. Total drop rate all countries Projects on time 50% 100% 2012 2013 2014 Fix the basics: network and IT quality Priority 1 incidents all countries 0.3 0.5 0.7 Drop Rate (%) 2011 2014 0 20 40 2011 2014 New technologies Quality up Cost down 3
- 4. Cell availability whole network (Kazakhstan) Quality perception (Kazakhstan) 0% 30% 60% Tele2 Activ Beeline Kcell • Continue to fix the basics in design and operations • Continuously increase quality where it matters for the customer • Voice over LTE (VoLTE) and HD Voice • Data experience in LTE • Focus on customer perception • Outside-in KPI’s • Tight collaboration with customer service Quality up -where it matters for the customers CTIO customer complaints for technical reasons Jan 2014 Aug 2014 Target Aug 2013 Aug 2014 90% 100% Aug 2013 Aug 2014 % New technologies Quality up Cost down 4
- 5. Customers want more data when moving to LTE Total Data Usage 3G LTE Jan 2012 Oct 2014 New technologies Quality up Cost down Today LTE stands for ~70% of all data usage in Tele2 Sweden 5
- 6. Dilemma: more data, higher quality, same cost How to deal with + exponential traffic growth + good quality for our customers + cost efficient transition to new technologies New technologies Quality up Cost down 6
- 7. Total resource cost LTE more cost efficient than 2G and 3G 3G 4G CTIO resources Drive down costscontinuously in all areas 80% 90% 100% • Push for scale •Invest in spectrum and backhaul •Consolidation of data centers •Focus on LTE •Near/Offshoring •Sharing sites and transmission •Get rid of legacy fast 0 600 Kista Riga 2012 2017 2012 2017 Cost/Mb 2013 2017 Cells Busy hour traffic volume per cell MByte New technologies Quality up Cost down 7
- 8. -115 -107 -99 -91 -83 -75 -67 -59 -51 -43 -35 13% 11% 20% 18% 38% Customer care Service & device portfolio Network coverage Service quality Cost & billing Good coverage becoming even more important for the end user 17% 10% 13% 21% 39% 2012 2013 75% indoor coverage without U900 Source: Nokia 95% indoor coverage with U900 100 % New technologies Quality up Cost down 8
- 9. 5 Low frequencies and fiberbackhaulensure scalability and cost efficiency * Depending on radio plan, it is much easier to fully utilize capacity of 800/900 MHz compared to 2600 Mhz **Weighted coverage and capacity Building a 800/900 MHz network is typically 5x more cost efficient** compared to 2.6 GHz 70 % more data capacity* Owned, co-built, dark fiberor λ-lease will ensure scalability for future Microwave is acceptable alternative in rural areas 1 10 100 1,000 2G 3G 4G 5G Mbit/s 5 000 40% fiber 80% fiber Fiberrequired for speed and capacity at the lowest cost to scale New technologies Quality up Cost down 2.6 GHz 1.8 GHz 800/900 MHz 9
- 10. 800Mhz 900 Mhz 1800 Mhz 2100 Mhz 2600 Mhz Comment Sweden 10 20 35 20 40 Joint Ventures with Telia2100 MHzand Telenor 800/900/1800/2600 MHz Estonia 10 11 24.3 30 Estonia alsohave 4.4 MHz in 450 MHz and 1*30 MHz in 2300 MHz (TDD) Latvia 10 11 24.8 20 20 Lithuania 10 11.6 24.6 20 20 Croatia 5 12 15 Norway 5 20 Kazakhstan 11 5 20 Netherlands 10 20 4G only Tele2’s frequency portfolio 2G 3G LTE New technologies Quality up Cost down 10
- 11. Current IT legacy structure New technologies every 10thyear Selectively push new technologies and innovation 2G Launched 1990 3G Launched 2001 4G Launched 2010 5G Planned 2020 New technologies Quality up Cost down 11
- 12. Current IT legacy structure New technologies every 10thyear 4G is adopted faster than 3G Selectively push new technologies and innovation 2G Launched 1990 3G Launched 2001 4G Launched 2010 5G Planned 2020 1 2 3 4 5 6 7 8 9 10 11 3G 4G Years from launch Data usage Threat of Legacy • Complexity •Maintenance efforts •Higher OPEX •Reduced flexibility •Low speed / time to market New technologies Quality up Cost down 12
- 13. Current IT legacy structure How to cope • Retire legacy fast • IT Blueprint • Focus on LTE • All IP, virtualization, cloud technologies • Drive 5G definition New technologies every 10thyear 4G is adopted faster than 3G Selectively push new technologies and innovation 2G Launched 1990 3G Launched 2001 4G Launched 2010 5G Planned 2020 1 2 3 4 5 6 7 8 9 10 11 3G 4G Years from launch Data usage API:s Siebel Singl.eview ANALYTICSEDW Customer Touch points SALES CRM REAL TIME CHARGING BILLING Threat of Legacy •Complexity •Maintenance efforts •Higher OPEX •Reduced flexibility •Low speed / time to market New technologies Quality up Cost down Tele2 IT Blue print 13
- 14. Latency lower in LTE than in 3G 0 60 120 % Superior user experience in LTE Data completion success rate higher in LTE Jan 2013 Oct2014 LTE 2G 3G Speed higher in LTE than in 3G % Average MOS •4.1 VoLTE(23.85) •3.9 3G (12.65) MOS VoLTEquality higher in LTE 141203 141207 LTE 3G ms 0 30 60 141104 141204 Throughput (Mbit/s) LTE 3G 100% New technologies Quality up Cost down 14
- 15. Customers at Tele2 spend more time on LTE 2014 New technologies Quality up Cost down 15
- 16. LTE is just at its beginningMany new features will easily bridge the time till 5G will be required VoLTE and Video over LTE LTE roaming Carrier aggregation Coordinated multipoint Further enhanced inter-cell interference coordination Mobility load balancing Now 2020 5G New technologies Quality up Cost down 16
- 17. 5G is not just a new radio access layer Holistic user/service centric approach and focus on E2E Massive traffic growth and high density demand Wide variety and variability of services consumed New use cases Standardization Development Trials/Testing Accelerated evolution of 4G advanced and its ecosystem 5G 2015 2016 2017 2018 2019 2020 Stringent demands for real-time communications New technologies Quality up Cost down NGMN Industry White Paper defining end-to-end requirements 17
- 18. Summary Selectively push new technologies & innovation Quality up – where it matters for our customers Drive down costs continuously in all areas 18