The telecom industry is witnessing dramatic and rapid changes. But all these changes are only possible if networks with high capacity expand, according to Murat Cinar, CEO of Vega telecommunication group. A Ferrari won't pass your house if there are no good roads, he said. Vega is an umbrella brand for business units of Farlep-Optima telecommunication group. As a leading fixed-line operator in Ukraine, it is now replacing copper with fiber in several cities and is building a backbone network that will connect the whole Ukraine.
What trends and opportunities do you observe in Ukraine's fixed market?
One of the main trends in Ukraine's fixed market is that broadband subscribers are migrating towards high speed connections.
As a result, a new generation technology GPON is gaining popularity, which allows for a speed of up to 1 Gbit/s and even higher.
Another trend is the migration of fixed voice subscribers towards mobile phones. To compete with the mobile network we develop IP-telephony and provide our own over-the-top (OTT) applications for Android and iOS.
At the same time it is important to understand that no matter what decisions are taken for reaching the last mile, the establishment of the backbone network plays the key role.
A Ferrari won't pass your house if there are no good roads. So it does not matter whether it is a fixed or mobile network. The basis is a quality fixed network. Well-developed infrastructure capable of providing data transmission in the networks of a new generation is required.
Can you describe Vega's plans for high-speed broadband?
We are upgrading existing networks—decreasing a copper ADSL network and connecting our subscribers to the high speed optical network using the GPON equipment.
We have two pilot projects—in Kiev and Odessa in the city center. The project in Kiev is carried out with ZTE.
By the end of this year, the projects will be fully implemented. We expect up to 2000 connections in each of the zones in the two cities. And we are also developing important projects for network modernization in other cities and regions of Ukraine.
How do you lower the cost of fiber network roll-out in order to make them more affordable for the customers?
Vega already has in-city fiber-optic lines. During GPON implementation we just have to complete the last-mile fiber optic installations, and this allows us to reduce spending and as a result affordable prices for the customer.
What do you think of ZTE as a partner?
We consider ZTE as a reliable partner who has modern telecom equipment in its portfolio and is able to handle complicated projects.
We are pleased that our partner can support us in our pilot project—the building of GPON in the capital of Ukraine.
What are the biggest challenges in delivering high-speed broadband?
Vega has set a goal—to become the No. 1 national telecom operator in terms of quantity and quality. We focus on the business segment, but work in B2B as well as B2C segments. There are three main components for our future success.
The first is speed competition. Of course, copper speed is not enough; there is a need for high speeds. Now there is not enough demand for 1 Gbit/s. But in practice we form this request.
The second is the complex service. Today people do not want to pay separately. That's why one of Vega's focuses today is provision of a complex modern telecom service. We are strengthening the internet services and related services—SIP, IP PBX and IPTV. New service GPON is a multiservice platform, so a customer needs only one cord to get everything—broadband, telephone, modern 2K TV, video security and any components of IoT.
And last, but not least is the focus on the customer. The internet speed and even the price are not the main things. Customer approach is important. And those operators win who work honestly on the market and honor the clients.
What are your marketing strategies for the B2B and B2C segments? What progress is being made?
Our marketing strategy today is transforming the company into a complex provider of integrated telecom and IT solutions, with a focus on B2B services development. There are several key points for this.
The first is modernizing our core business including data and voice. We extensively upgrade our broadband network to GPON, which provides internet access at speeds of up to 1 Gbit/s for the B2B and B2C segments. Telephony is developing as well. Our B2B and B2C customers have already got IP telephony via the mobile and desktop application VegaPhone, which significantly improves user experience.
The second is developing new services. This year we made new steps in IT transformation with the Microsoft cloud solution partnership. Also the B2B clients in the near future will be offered the new IP PBX solution from Vega telecommunication group and Vega's telephony with Skype for business. In addition, we are in the process of implementing a big range of services, such as anti-DDoS solutions, partnership with Amazon.
The third is a heavy focus on converging the fixed business and mobile.
What does 4G and 5G mean for you? Does that change your network strategy? If so, how?
4G and 5G is the future of broadband access. Using 4G network and eWBB technology, subscribers can easily get access to the high speed internet without laying any cables. It does not necessarily mean that cable infrastructure should not be developed; it should be developed even more to make high speed connection of new eWBB base stations possible.
To be ready for new challenges, Vega is now building a fully functional backbone network that will connect the whole Ukraine. This is a complex project. But it will give us the potential for growth. The throughput of the backbone network will increase to 9.6 Tbit/s.
With several business units, how do you drive the synergy between them?
There are standard things in our company—general KPI and cross-functional projects.
In the most important areas, steering committees have been created. We call them CARE—according to the capital letters of the directions of our operational strategy. They monitor the implementation of key projects in all structural divisions.
How would you explain the concept of CARE?
Philosophy and Vega's work approach are realized in the "CARE formula". On the one hand, it means the company cares about its employees. On the other, each member of Vega's team cares about the customers and the overall results of the company's work.
Each of the four letters indicates a certain direction of the team's work for the best business results:
• С — connection and churn. We connect more subscribers to reach 1 million subscriber base by 2021. We work with current clients in such a way that they stay with us.
• A — accountability. If we take the obligation, we do it on time and as well as possible!
• R — reliable network. We build quality networks. We restore the connection on optic lines in 24 hours.
• E — efficiency. We achieve the best result with minimal costs and efforts.
What do you look forward to in the next three years?
The increase of broadband speed and close integration between telecom and IT will lead to the appearance of new services—the transfer of video information, financial transactions, medical services and e-governance. In the EU, for example, the practice of paying for travel in transport using a smartphone from a mobile operator account is already not even a bank transaction.
The mobile and fixed network will merge. At the same time, voice traffic will decrease several folds and the internet-based OTT solutions will replace the "voice".
But it's important to remember: all these changes are possible if networks with high capacity expand. New telecom solutions need new speed connection.