Telenet: To See the Beauty Coming out of Convergence

Release Date:2017-09-18 Reporter: Liu Yang Click:

 

 

Telenet Group is the largest provider of cable broadband services in Belgium. To better compete in the mobile market, the company took over Base from KPN in 2015. Telenet is now modernizing the mobile network with ZTE, which will help to profile itself as a leading converged operator in Belgium and Europe, against the background of a telecommunications and entertainment market that is undergoing massive changes. Micha Berger, CTO of Telenet, and Luk Bruynseels, VP of Mobile and Voice Technology, discuss the challenges in the network modernization project and the transformation from an MVNO to owning its own network.

 

What are you seeing in the convergence space in Belgium and Europe?

Micha Berger: If you take a look at the markets today, not only in Europe but all around the world, the convergence and consolidation of companies is something you see happening more often. The traditional mobile-only companies understand that they are missing the fixed business and the fixed-only operators in many cases are missing out on the mobile business. So bringing them together is almost a natural thing. In Belgium,we acquired the mobile operator Base which made us a genuine converged fixed-mobile operator today. You can see this happening more and more around the world. A good example is Liberty Global's operation in Holland where Vodafone and Ziggo are a nice combination of a very strong mobile provider and a very strong fixed operator. 

 

In the convergence battle, how do you achieve success?

Micha Berger: First, you need a solid business model to start with. Telenet has a very unique situation where we have both a very good performing fixed network and a good performing mobile network, which provide us the foundation to provide very good end user experience. Because we own both networks, financially it is also much easier for us to build quad-play products, which include voice, internet, television, and mobile services. We combine the services and meet the customer's demand of offering simple and reliable service in and outside the home. Customers do not want to choose a different TV provider, internet provider, or mobile provider. They want a simple solution that will serve their daily needs. We are in the perfect place to provide this solution. We created a fixed & mobile converged product called WIGO almost a year ago. It has been very successful and has attracted hundreds of thousands of customers because it is a family package. It is easy to understand and use and serve the daily basic needs of customers and families these days. 

 

What's your overall strategy to develop your success further? 

Luk Bruynseels: Our strategy is that we want to give pleasure to people in their life and work. We underpin it with two things. One factor is supreme connectivity that is built on fixed and mobile networks. The other is to inspire entertainment. That is what we are doing on video and television. We want to make it easier for people to use new technologies in their life. We want to achieve this not only for residential customers but also for business customers.

Micha Berger: We have a very strong connectivity foundation for residential and B2B customers. On top of that, we provide very strong services, such as internet, voice, and TV while we continue to invest in our own entertainment strategy. It is what we call the "love effect". Customers don't necessarily love their infrastructure but they love the service and the brand. We package them altogether under a strong brand and under great customer centricity. We provide a great layer of services and care to our customers. It's about how you package the service and what you can provide to your customers so they can relate to.   

How important is mobility to your overall strategy?

Luk Bruynseels: Customers want to be connected all the time and everywhere. And it does not matter whether it is at home or on the move. You have to be able to serve your customers in all those circumstances. Customers are spending a lot of time using their cell phone connected at home to Wi-Fi and outside connected to LTE. They don't want to see or feel the difference. We want to offer the whole journey to them. The mobile part is one of the foundations. Next to that, we have to see that services are interconnected and blended.

Micha Berger: We are investing heavily in mobile networks. We are going through a transformation phase now, looking at fixed and mobile as one overall netwrok. The one network can be connected via coax, fiber, licensed radio, Wi-Fi, at home and outside the home. Customers should always get the best services from the service providers. That is what Telenet focuses on. 

Telenet is now cooperating with ZTE on the network modernization project.

 

What major challenges do you face?

Micha Berger: We see ZTE as a partner, as somebody that is taking on the challenge with us to meet our ambitions to be the best mobile operator in Belgium. We choose ZTE because of their attitude, ambitions, and the way they approach the project with us. We are modernizing all our sites with a Uni-RAN solution provided by ZTE. ZTE provides us with a solution for 2G, 3G, and 4G LTE. We are actually expanding our network and building additional new sites. We are growing in terms of the number of base stations in Belgium because we want to build the best coverage and connectivity. It is a challenging logistical exercise that we are executing together with ZTE.

Luk Bruynseels: There are a couple of challenges. It's a big project. The first challenge is timing. The timing is very strict because we want to migrate all our customers that we had as an MVNO to our own mobile network. Next to that, we win a lot of extra customers, including wholesale customers. The second point is that Belgium regulations on mobile networks are challenging because they are complicated. We have three different regions with different rules, guidelines, and procedures. Last but not least, we have a lot of work to do, but we want to maintain a good service quality. For the end-users, the network upgrade should be transparent. They should soon feel the positive effects of network modernization.

 

What is the time required for such a project? 

Luk Bruynseels: We set the target to finish in 18 months. There are several aspects that define this goal. It is the combination of selecting the right partners, keeping the logistic chain under control, and implementing the procedures for environmental health and safety to see that we do it with the right quality. I think 18 months is a positive stretch. We took on the challenge together with ZTE and are currently on schedule to make it happen. 

 

What kind of customer experience would you like to create on your mobile network?

Luk Bruynseels: In Belgium we see that people have high demands on the mobile network nowadays. They are very dependant on their smartphones and we are making sure that we can meet their demands. We are also carrying out initiatives with ZTE on multiple fronts. For example, we maximize the return on investment because we invest a lot and we have to make sure that we get the most out of the equipment. Another important thing about customer experience is voice quality. It is basic and fundamental. You have to make sure that you have no call drops. 

Micha Berger: Our best measure of quality and success are the customers themselves. I mean, you can add all the accurate tools you want, but if the customers are not satisfied, it is useless. We measure our customer satisfaction very frequently. Every month we have a survey. Customers continue to come to us and buy more services. With the investment in our network, we hope to make customers happier in the future, so that they come to us for additional services.

 

How do you drive innovation at Telenet?

Micha Berger: Liberty Global is now becoming very innovative in many ways compared with other traditional cable operators. We at Liberty and Telenet are climbing the innovation ladder seriously. I think we have a lot to learn from the young kids that just finished school or university. They organize start-ups and they have something that we don't have. We can learn from them and they can learn from us. We are trying to become more agile and to do things that we didn't do in the past. If we want to do something, we will bring in young graduates to work with us. They will see the way we work is more solid compared to the hectic and agile way. We will profit from their agility and combine the two worlds together.

Luk Bruynseels: We are making some specific investments in start-up funding. We are investing specifically in start-ups ourselves. Within our company, we are creating an environment for young graduates to join us. We just launched a campaign to recruit university graduates. It has been very successful. We try to see that we can blend the innovation DNA into our company.

Micha Berger: Together with ZTE, we are looking at new frontiers as well. We are looking at how we can use ZTE's technologies to help our innovation and to open up our networks and platforms to be able to offer new services and to allow this generation to be more innovative on our platforms. 

 

What's your strategy towards the evolving 5G standard?

Micha Berger: Everybody is working on 5G. We are also working on 5G. We will be there when 5G is ready. The challenge we all have is that 5G is not yet fully defined in terms of specifications and standards. The standards are not yet complete and the equipment is not yet working according to standards. We are doing all kinds of interesting trials on Pre5G. We expect 5G to be a very different animal compared to the LTE network we have today. It is supposed to provide large throughput but also to be able to have low latency and to provide services that you can't provide today. I assume that thanks to the Olympic Games, Asia is a bit more advanced than all of us in terms of network and the way services are used. We are eager to learn what is happening in China and other parts of Asia. We will try to build additional innovations on top of the infrastructure once the standards are out there. We are following ZTE and other vendors developing in this domain. 

 

How do you envisage your future cooperation with ZTE?

Luk Bruynseels: We invest very significantly in our network with ZTE. We will work more with them on joint innovations. We count on vendors like ZTE to take us on a journey to see what the future will bring. We are glad that we've chosen ZTE until now because it's proven that we have made a very big step forward. 

Micha Berger: The 1.3 Gbps showcase we did in Belgium is the first in Europe. It just shows what we can do from a technology perspective. We believe that's only the beginning. It's going to grow and the investments we are doing exactly serve this purpose. It's not only about the speed. It's about what you can provide on top of the speed. The innovations are really about the services we're going to build and provide to our customers that are leaning on the strong network foundations.

 

What new opportunities do you foresee for Telenet?

Micha Berger: We have room to grow in mobile for sure. Also within the Liberty family, we are mainly MVNO-driven in many countries. We have strong ambitions to grow in our MNVO countries. Another area that we have ambitions to grow is B2B. Small businesses need to be much more digitized and need to digitize their processes in order to become more successful and drive the economy. You see that especially in Belgium. So we are there to support the small and medium enterprises, to digitize their way of working and to enhance their economic value.
For new services, I believe in IoT. It is going to be a significant player and we are going to be a player in that area as well. IoT is very broad you need to first narrow down to zoom into services that are relevant for businesses or customers. That's the challenge. 

 

From an MVNO to owning your mobile network, how would you describe the process?

Micha Berger: There is a very solid business case for MVNOs. For example, in some of the countries of Liberty, we operate as an MVNO because financially this way of approaching the market is better than owning your mobile network. It gives you flexibility and capability for negotiating pricing. It serves your business almost the same way. This is true until the scale turns around. At Telenet, we operated as an MVNO for many years. We became very successful and we grew out of proportions to operate as an MVNO. We understood that if we wanted to continue to grow at the same pace, we actually could only do this if we owned our own network. My boss always says, "Think about the example of renting your house. After a couple of years it's better off if you buy the house and pay your mortgage." That's what we are doing now. Instead of renting, we actually bought it and are paying off our mortgage. The assets are ours and we can do much more—renovate the house and furnish it any way we wish. The power of bringing mobile and fixed together in terms of services is the beauty we are going to see coming out of the convergence of both companies, services and networks.

 

Is it a big change for you?

Micha Berger: For me, it is a big change. I am responsible for mobile at both Telenet and Liberty Europe. I don't originally come from the world of mobile. I came from the world of cable, broadband, and video. That's the world I'm very familiar with. I stepped into the mobile world almost four years ago. I'm learning a lot. My personal skills have improved quite dramatically and it's a big challenge for me. Building a new mobile network is not something I've done in the past so I rely on people like Luk and his team who are experts in this field. I am always challenging from a different aspect, maybe asking obvious questions, which are sometimes good questions. I think it is a good combination to both learn and challenge. 

Luk Bruynseels: For a fixed operator, it is also not easy and straightforward to get on the mobile road. There are some things that are different and it takes some time before you change your mindset. So it is a big change in our company. But it is a change that is needed and you see that everybody is positive about the change and wants to make it a success. 

Micha Berger: You see the commercial part of the company is also very excited about the converged world. A mobile service is a fast-moving product compared to a fixed service. People can change their subscriptions from one day to another, be exposed to new services or business models. Mobile is much more dynamic we need to act fast and think fast. We need to cater to a faster and more complex-moving world around us. This is what is making this industry nowadays exciting and exposing new business opportunities.