Hannes Ametsreiter CEO Telekom Austria Group CEO A1 Telekom Austria

Convergence as the Real Value for the 21st Century Society

Hannes Ametsreiter, CEO Telekom Austria Group

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Q: With more integrated and convergent product use how is Telekom Austria Group developing its networks to cope with today’s and future demand?
A: We are currently seeing a veritable explosion of data volume transferred via the Internet. The amount of data run through our mobile network has doubled within one year the percentage of clients with 3G mobile devices has increased by 30%. Current network technologies are barely capable of handling these enormous data volumes. Every single day, 4,000 new internet addresses per second are created on the Net. We can only respond adequately to this trend by implementing and rolling-out the latest fixed net (such as FTTx- Fiber-to-the-Curb/Building/Home) and mobile communication technologies and the efficient combination of both. The outcome must be of course a better product for the consumer and more efficiency for us.

Our ambitious next generation network program encompasses four glass fiber pilot projects in Villach, Klagenfurt and Vienna (15th and 19th district) with data speeds of 30 to 100 Mbit/s as well as a VDSL-rollout and is expected to provide potential coverage to 2 million households by 2013 as well as to 750,000 households outside the densely populated urban centers. By the year 2013 we will therefore connect more than 4,000 mobile transmitting stations to the high performance fiber optic network. That will guarantee our clients the band width they need.

Overall Telekom Austria Group invested more than 710 million Euros in our telecommunication infrastructure last year. We will keep this track for the future. This should guarantee a solid ground for a broad variety of convergent products to meet the needs of our clients.

On the product side we are definitely successfull with our variety of convergent products. According to Deutsche Bank analysis and benchmark, Telekom Austria Group is currently one of the leaders in stopping the line loss. We attribute this success to our product “aonKombi” which is our leading measure in this respect.

Additionally, in the business segment, there is a great demand for integrated offers including Hosting, Housing or Managed Services. Customers do not only ask for combined services but also for the possibilities to outsource ICT areas.

Q: A lot of talk is now looking at cloud computing and its potential for the Telco, is this hype or are there real existing revenue streams?
A: Cloud computing definitely is a topic for us. According to research the cloud computing market will grow about 16.6 % in 2010 (Gartner 2010) and IT managers see the possibilities of cloud services. The greatest challenges we had to face are data security issues, as managers fear the loss of control over data and data security.

We decided to start our services in cloud computing in Austria in cooperation with IBM to offer our customers the best of both worlds.

We clearly understand that solving the data security and privacy issues, as well as the availability challenges, is key to the success of cloud computing services. Hence we will address these by offering an “Austrian Cloud” entirely built on servers hosted in our Austrian Data Centres. We have redundant infrastructure systems therefore we can guarantee high availability and can provide Service Level Agreements for customers with highly sensitive data.

Our product portfolio will be developed around our key strengths of communication and collaboration services such as instant messaging, voice services and E-mail. In the future we are also thinking about offering our clients virtual desktops.

As a Telco we can of course offer an additional benefit to our cloud computing customers. We can definitely guarantee a 24/7 availability of our services as our customers can access them via a fixed line or mobile broadband directly. As a Telco we can fully scale our services from typical internet access based to dedicated access, where customers will benefit from the flexibility of cloud services while maintaining the availability, performance and security of SLA based connectivity. This provides a unique benefit to our customers, only a Telco can offer – a secure and flexible service, delivered over the most reliable network right to the desktop with one SLA.

Q: The seamless movement of both data and voice traffic from fixed networks to mobile and vice versa, is a prerequisite for most business travellers and workers, is this an easy fix or is the planning stage critical?
A: Customers do not buy technologies, they buy solutions! They don’t care about the technology but about the outcome! They want to be connected everywhere at any time – be it mobile or not. It is a fact that services are no longer restricted to their respective networks – phone calls are run through the data networks, TV is no longer only broadcasted, e-mail accounts are accessed via mobile phone networks. As a service provider we have to guarantee that these systems work and that we always pick the best technology for the task at hand.

We combine efficient fiber optic technology and high-speed technologies such as HSPA+ to meet the needs of our demanding clients.

With increasing amount of data and traffic the combination of land based fiber optic technology and mobile broadband will be crucial. Land based fiber optic technology guarantees capacity while mobile broadband technologies stand in for mobility. Mobile devices will be run more and more with the help of the landline-infrastructure.

With more than 2 million notebooks in Austria it makes sense to connect via DSL at home and use the data card for mobile working.

Mobile data traffic will be run through fixed line where ever possible. That vacates capacities in the mobile network for mobile needs. However, for the customers there is no difference as they will not realize which technology is used in the background.

We found out that for mobile broadband 80% of the usage is at home. This means if we have a good working wifi solution – using DSL or fibre – then this would provide a better product for the consumer and a better and more efficient network for us.

Q: How does Telekom Austria Group see itself in the future? Where does future technology lie in your plans?
A: The convergence of fixed net and mobile communication has become a key feature of the telecommunication market. This trend is clearly visible in Telekom Austria Group’s home market and now also increasingly shapes the competitive environment in Bulgaria. Against this backdrop, Telekom Austria Group merged the fixed and mobile operations in our home territory into a single business and the acquisition of the two fixed net operators Megalan and Spectrum were a natural next step. It will allow our Bulgarian subsidiary Mobiltel to become a fully integrated operator and participate in the anticipated strong growth of fixed net broadband, IPTV and convergent products. This step will further strengthen its leading position and will ensure future growth in an existing market in line with Telekom Austria Group’s strategy Telekom Austria Group has now a new corporate structure that will run the company’s businesses across eight countries in CEE. We employ 16,000 staff and serve 19.2 million customers.

We will continue to be the innovation leader in telecommunication in Austria. However, with the new structure we will be better prepared for a convergent future. The increasing market demands for more convergent products makes an organization along the lines of technologies outdated. We now have organised our company along the lines of the customers´ needs instead of being focused on technology.

Our customers in Austria will benefit from our new and convergent structure as we can offer innovative and efficient services even better and provide the consumer with a one-stop-shop system.

The reorganization will pave the way for re-engineering the network infrastructure. The new corporate structure will enable a more intensive exchange of knowledge at the group level, and therefore strengthen our innovative power.

While a few things will change, innovation and efficiency will remain the central objectives of our new corporate structure.

For the moment we are in the consolidation phase. We are focusing on cost cutting. But at the same time we put emphasis on strengthening customer understanding and innovation. Already today we need to prepare for the next innovations in the telecommunications industry.

We are currently among the world leaders in technology: we were the first in Europe to deploy HSPA+. The network is now running at 21 megabits a second and will be boosted to 42 megabits shortly. HSPA+ is in operation across Austria and in Croatia. We are the leading company with this technology. We need spectrum efficiency so that’s why we are looking for wifi offloading and also towards the next steps:

In September A1 Telekom Austria, our Austrian subsidiary, has acquired 4 paired and 5 unpaired frequency blocks which will allow us to offer data services with a high throughput based on this 4G mobile technology – LTE. We have been intensively testing LTE for a few years and based on our extensive expertise and year-long experience we will be able to start the commercial launch of this cutting-edge technology immediately after the grant of the license. Our base stations meet all technical prerequisites for the start, thus we will be the first mobile provider to start LTE in Austria.

On the product side, opportunities will also lie in education, health care and with elderly people.

Apart from the technologies we also created a couple of new products and services such as the A1 credit card in Austria, Mobitel offers QUATRO the high quality digital TV and in Serbia and Macedonia we offer social media products, that combine sms and facebook . Moreover we are also moving forward in the field of e-mobility. Right now we are investing in transforming phone booths into charging stations for e-vehicles. ICT plays an important role and can develop e-mobility further as it provides the means for easy payment, identification and authorization. These activities strongly support our commitment towards the environment and society. You will find Telekom Austria Group in all its operating areas at the forefront of innovation.

For more information visit:
www.telekomaustria.com