CSL: Communication for Everyone

Hong Kong enjoys top-tier fast speed mobile and fixed broadband in the world. CSL was Hong Kong’s first mobile operator and is a subsidiary of Telstra Corporation Limited, Australia’s leading telecommunications and information services company. In Hong Kong, CSL is the only mobile company to employ a distinctive market segmentation strategy. CSL provides customer-centered services through 1O1O, one2free, New World Mobility, and a number of other prepaid brands. ZTE interviewed Christian Daigneault, CTO of CSL. He talked about CSL’s network transformation, customer experience, and challenges in monetizing LTE.

Q: You have worked for large operators in Europe, North America, Asia, Latin America, and Africa. What attracted you to CSL?

A: Hong Kong city itself was the big attraction for me. In many ways, Hong Kong is one of the most advanced markets in the world, especially for mobile broadband. Hong Kong has some of the most complex environment to run mobile networks and also has very demanding customers. Another aspect that attracted me was the support from CSL’s parent company, Telstra, the major shareholder of CSL. CSL was in a good position to be the strongest operator in Hong Kong. Both Hong Kong and Greater China in general were very attractive to me, and the complexity of the task at hand was a great challenge.

Q: You successfully led CSL’s network transformation. What was the key to success in this project?

A: We began our network transformation in 2007. We wanted to transform our basic voice network into a full IP network for broadband users and high-speed data, ready for future upgrade to LTE. One key factor to our successful transformation was our strong partnership with ZTE. CSL and ZTE made a big bet on the new and yet unproven technology to lead the industry. In March 2009, we were one of the first operators to provide an all IP 21 Mbps HSPA+ ready for LTE. There were many technological challenges to overcome since what we were doing was not done before by anyone. Both ZTE and CSL took the challenge, smooth out the difficulties along the road, and achieved a very good result. We transformed our network to HSPA+ 21 Mbps in about one year, which is extremely fast considering that it was a full swap of the entire network, from core to RAN, also including the backhaul. Not to be forgotten, we had millions of live customers during this time, so this upgrade had to be done seamlessly without impacting customers.

Q: How is the LTE network performing and what still needs to be done to expand LTE coverage?

A: Our LTE network is performing very well now. The network covers more than 95% of the population of Hong Kong. Most of the network has been upgraded to LTE, which means that LTE users are currently served by the LTE network most of the time, except for voice calls where they need to fallback to 3G. The LTE rollout has greatly enhanced customer experience. Recently, we expanded our LTE spectrum to a full 20 MHz at 2600 MHz and a full 15 MHz spectrum at 1800 MHz. With these two frequency bands, we have probably one of the highest-capacity LTE networks among operators in the world. We are very fortunate to have a large spectrum, and we are leveraging this advantage to the maximum extent. With 20 MHz bandwidth, our network supports Cat4, i.e. 150 Mbps speeds, and has further enhanced the customer experience in Hong Kong.

Q: How did you improve customer experience after the LTE network has been rolled out?

A: The first step was to extend the LTE rollout to all sites, which is almost completed. The second was to increase the LTE bandwidth by refarming more of our 2G spectrum at 1800 MHz to LTE. 1800 MHz provides better in-building penetration than 2600 MHz and provides more consistent coverage. Once you have deployed the full network and expanded the bandwidth, the third step has been network tuning. We had to improve handover between cell sites, and optimize load balancing between 1800 MHz LTE, 2600 MHz LTE, and 3G. We have to optimize our complex multilayer network so that we can leverage all these resources for maximum throughput and better customer experience.

Q: How will you migrate your 2G or 3G subscribers to 4G LTE?

A: First of all, this migration is happening naturally because Hong Kongers are always attracted by the newest technologies. Customers are switching to new handsets and smartphones regularly. In our stores, we are now only selling 4G LTE capable devices. Customers are moving to 4G because LTE really benefits them and provides much better customer experience especially that the 3G network has reached its capacity limit in many areas like in Hong Kong MTR.

Q: How do you profit from LTE, and how have your customers responded to your LTE offerings?

A: We don’t really differentiate 3G or 4G in terms of pricing plans or packages. If you buy a 4G device, you benefit from the 4G network. Monetizing LTE is really related to the uptake of smartphones. This is related to enhanced customer experience. More and more users are converting to smartphones, which brings us higher revenue than traditional feature phones. With LTE, users are also consuming more data and since most of our plans are volume-based. This also means more revenue.

Q: CSL has signed LTE roaming agreements with SK Telecom and Telstra. What are CSL’s future plans for LTE roaming?

A: We have many operators in the pipeline doing testing at this point. LTE is still new and other operators are not yet ready. We have a large number of 3G roaming partners with more than 500 agreements and we intend to continue to lead with LTE.

Q: What do you think about ZTE as a partner?

A: The partnership with ZTE has been very successful for CSL. We have partnered with ZTE since 2008 and since that time ZTE helped us lead with new technologies such as first to introduce HSPA+ at 21 Mbps, first to introduce LTE and later LTE CAT 4. We have been able to lead our market and been recognized by our customers as the best network in Hong Kong. This certainly contributed to CSL success. In the last 12 months, we have been ahead of other operators in Hong Kong in terms of revenue. Having the best network that offers superior experience is at the core of our strategy.

Q: How does ZTE compare with other vendors?

A: In my experience, I have been working with most vendors in different markets. What makes ZTE different is its flexibility in listening to the customer and to deliver to expectation. We have very specific requirements in Hong Kong due to the high complexity of the radio environment and other factors. Other vendors sometimes cannot customize for Hong Kong since they have to prioritize amongst all operators and then Hong Kong has little weight. ZTE can meet our specific requirements much better than other vendors.

Hong Kong is one of the most advanced mobile markets in the world. What we do in Hong Kong can always be applied in other markets and this is one reason ZTE is motivated in leading in Hong Kong. We were the first to launch LTE in Asia. ZTE was able to adapt its schedule to debut LTE in Hong Kong first. For other vendors, Hong Kong was not necessarily their top priority. We were also able to launch HSPA+ earlier because of ZTE’s flexibility. We have also gone through the tests of LTE Advance at 300 Mbps successfully with ZTE. We are planning the commercial introduction of LTE Advance at 300 Mbps, so we are continuing on this road to lead with LTE.

Q: ZTE has provided you with network optimization assistance recently. How would you qualify their performance?

A: The response from ZTE has been good. In late 2012, our network was benchmarked against the networks of other operators and was found to be second best which was totally unacceptable to us. We had ZTE’s R&D engineers come to Hong Kong, and we worked out a six-month project to boost the network which was completed at the end of 2012. This was not only a traditional RF optimization project; it also involved fine-tuning the radio software to deal with the high level of interference in HK and extremely user density. ZTE has flexibility, skills, and expertise to tweak and enhance our network performance. Now, CSL is back to No.1 in terms of higher speeds in more locations, which means a consistently more stable broadband connection.

Q: Are there any plans for future cooperation with ZTE?

A: We are working on expanding our network. Growth in Hong Kong is still strong, and traffic is almost doubling every 18 months. We need to continue to increase capacity and coverage. We are working very hard with ZTE to introduce new technology to enhance customer experience further, such as LTE Advanced at 300 Mbps using Carrier Aggregation, Cloud Radio and VoLTE, so that we can continue to lead in the Hong Kong market. We have a joint innovation agreement with ZTE that we are pushing very strongly because we believe it is good for both of us. CSL will benefit from offering the best experience to its customers, and ZTE benefits by gaining valuable experience. Hong Kong is a good testing ground for new technology.

Q: Do you have any advice for ZTE?