Helena Féria, Head of Wholesale Business, PT Comunicações.

Portugal Telecom: A Global Operator

InterComms talks to Helena Féria, Head of Wholesale Business at PT Comunicações, about the company´s international carrier services and their competitiveness

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Helena Féria is the Head of the Wholesale Business at PT Comunicações, Portugal Telecom´s fixed network operator. Having joined PT in 1983 in the Planning Department, she has spent all of her professional career in Portugal Telecom Group. Since 1994, with one short interval, she has been working in PT´s national Wholesale Business, which she came to lead in 2001. With the full integration of PT´s subsidiary for the international business, Marconi, at the beginning of 2008, she is now also responsible for PT´s international carrier business.

Helena Féria holds a degree in Economics from the Universidade Católica Portuguesa.

Q: What are Portugal Telecom Group’s main activities in the international business?
A: Portugal Telecom has two important international activities: investments in and management of international operators, and the international carrier business.

Regarding the international investments, the most important ones are our operation in Brazil and our involvement with leading operators in sub-Saharan Africa. Mobile operator Vivo in Brazil, market leader with over 45 million customers, is undoubtedly our most important international operation.

Another vital part of our international strategy is our commitment towards the African continent. Portugal Telecom has been investing in operators in different countries: we highlight Angola and Namibia, where we have important stakes in mobile market leaders Unitel and MTC, and we are co-owners of the fixed and mobile telecom operators in Cape Verde and São Tomé e Príncipe.

In the international carrier business, we have a full range of products and services, including international traffic transport (hubbing to a large number of countries), capacity sales (IPLCs, network restoration), international Internet access and GRX services.

Q: How important is this business to the company and what part does it play in the company’s overall strategy?
A: Our international activities have become very important in ensuring a sustainable basis for future Group revenue and profitability growth. In 2008, 50% of our total Group revenue and an important part of results came from the international activities. By systematically exploring the synergies between all our domestic and international activities, we have also been able to enhance total Group profitability.

Q: What importance does the international footprint have for PT´s wholesale strategy?
A: The international footprint is an important lever for our international wholesale services, as it allows us to achieve scale, a crucial factor for competitiveness, especially in a thin-margin product like voice traffic.

Following the extension of our international operations, PT has been investing heavily in own capacity in submarine cables, which in turn now allows us to offer very competitive conditions, both in terms of price and quality. Currently, our network includes submarine cables linking all continents, most of them landing in our own stations, such as the SAT-3 cable to Africa and the Columbus-III cable to Miami. We are also investing in a number of new projects that are being implemented, such as the Europe-India-Gateway (EIG) – linking Asia, and the Mediterranean via Portugal to the UK – and the West Africa Cable System (WACS), the first cable running from South Africa to the UK.

Being shareholder of operators across the globe also permits us to fully understand the needs of our customers. For example, some African operators that rely on our Internet access services do so as they know that, from our own operations on that continent, we know exactly how these services should be tailored. And again, our own infrastructure allows us to be flexible in terms of both client access and traffic routing.

Another important factor is that the extension of our network enables us to sustain direct relationships with over 80 carriers, thus optimizing our traffic routing and achieving competitive conditions for international hubbing.

Q: How is PT developing relationships with international carriers for voice traffic?
A: Our strategy for voice traffic has been focused on four lines of action. First of all, we put a lot of emphasis on the relationships with major carriers which have a higher revenue potential and for which we have competitive advantages in capturing this potential. For these carriers we have a dedicated team of highly experienced senior account managers, which develop a close relationship with their counterparts, with regular bilateral meetings, participation in carrier events, etc. The volumes of these relationships allow us to have competitive conditions for the destinations involved.

Secondly, we leverage our competitive advantages for specific destinations, in particular for those related to PT’s international footprint. The scale achieved with these operators then also allows us to be competitive in other destinations, such as many other African countries.

Thirdly, we also leverage the traffic to those destinations for which we have higher volumes of organic traffic, e.g. Brazil, Ukraine, in order to obtain the best cost/quality conditions.

And finally, besides the relationship with major carriers, we also continuously develop relationships with smaller carriers, especially second and third tier carriers in major markets, and carriers of operators with multi-country retail operations, either MNOs or MVNOs, both in Europe and in Africa, especially those which are looking for premium quality for their retail operations.

Q: What about other, non-voice services?
A: Due to our extensive network, we have been providing international capacity to customers all over the world, be it as IPLCs, internet access or as network restoration on the main cable systems.

We also offer international Internet access at advantageous cost/quality conditions. With our network, we can transport traffic from and to the main points of presence in Europe and North America.

Q: What access do you provide to Tier 1 carriers and the main content providers?
A: Regarding IP services, the provisioning of IP Transits to our Customers at wholesale level is supported on our IP international platform. This platform is structured as a network of PoPs (London, Paris, Amsterdam, Frankfurt and Washington, with Miami following shortly) where we access Tier1 ISPs as well as other carriers, both directly and through public peering NAPs. Due to the strategic importance of these traffic sources, we also privilege having geographically redundant interconnections as much as possible.

Concerning content providers and in order to maximize the overall Quality of Service (and minimize latency), we have established a policy of having direct peerings with the main players (for example Google, P2P or gaming providers) and use CDN providers for proxying contents, thus allowing us to decongest the network.

Q: How competitive are your products and services?
A: We are able to offer international carrier services at very competitive conditions. Regarding voice, we can provide attractive hubbing conditions to many destinations, including for example many European and African countries.

For international capacity, we can provide solutions on most international routes across all continents, especially between Europe, Africa and the Americas. Given that they are based on our own infrastructure, we can ensure a competitive cost/quality relationship.

And finally, regarding Internet access, we can provide direct access to the main PoPs in Europe and North America with a high Quality of Service; as an example, traffic from African carriers to North America is typically routed on the shortest possible route via our own network to the NAP of the Americas in Miami: the SAT-3 and Columbus-III cables. We also offer flexible access conditions: carriers can link to us using half capacities or directly at one of our Points of Presence.

For more information visit:
http://ptwholesale.telecom.pt