We held a virtual roundtable with the nine CTOs and CTIOs from operators shortlisted for our CTO of the Year Awards 2020, from diverse markets. The discussion was lively, illuminating and wide ranging.
Mounir Ladki, Co-founder, President and CTO of MYCOM OSI, which has sponsored the CTO of the Year Awards for five years, set the scene by describing how the pandemic has underlined the crucial role of communications, and most especially the leadership shown by the CTOs and CTIOs.
The communications infrastructure they are responsible for certainly met the many challenges thrown up by Covid, supporting individuals, families, communities, businesses, the public sector and national economies during lockdown. Now, as we embrace the new normal, with many of us remaining at home, what will the lasting implications be for telcos, how can they build on their impressive achievements in the crisis and what will the future telco look like?
The value of infrastructure
For operators who have been so frequently and harshly criticised over the last decade for not being more like over-the-top companies and for sticking with their ‘old-fashioned’ 99.999 mentality, Covid was an extraordinary vindication.
Catalin Buliga, CTO at Vodafone Romania, said, “Suddenly consumers were at home relying on our network’s resilience and [the authorities] saw that connection to the home and the quality of broadband is not just nice to have. The government needed connectivity for a new hospital – we did it in eight hours. Suddenly we had great collaboration with all the authorities, because they treated us as critical infrastructure.”
The theme of being a trusted party in the pandemic was common to all the attendees, as individuals, businesses and government looked to them for support. Thomas van Briel, SVP Architecture & Strategy, Deutsche Telekom, observed, “Openness and the perception of the public is so vital. It was a great opportunity in Germany for us to build the tracing app on the government's behalf – it was downloaded 6 million times in two days. I think that changed the perception of our role as a company in society.”
Van Briel thinks this perception – that operators are vital to society – will help them recruit people with scarce skills, who previously might have been interested in working for digital native employers.
Barriers to progress
Elmar Grasser, CTIO of Sunrise Communications, pointed out that despite widespread recognition of the vital importance of networks, the variety in the coverage and quality of digital infrastructure across Europe is “quite astonishing”. He acknowledged that there are various reasons for this situation, but added, it is “still not good enough”. He hoped that there will be more political support for building infrastructure and that authorities will incentivise investment.
In fact, since the roundtable took place, a number of countries, as well as the European Union, have announced such incentives as part of their recovery plans. For example, at the time of writing, the French government had announced it is to spend €240 billion on fibre broadband infrastructure – a quarter of its €100 billion relief budget.
Countries like Spain, Romania and Bulgaria, which had regulatory environments that encouraged fibre build-out, are in the top ten European countries for fibre penetration although that takes nothing away from their achievement, nor does it ignore the importance of cable networks in some countries.
Radoslav Zlatkov CTO at Vivacom in Bulgaria, said, “We have two-thirds of the households passed with fixed broadband, although we have [the] lowest ARPU probably in Europe. We have financial [company] owners that are focused on the efficiency of their investments, and both in fixed and mobile international companies and organisations choose us [because of] our quality of service.”
He continued, “We are starting [to deploy] 10Gbps in the fixed network. We are not favoured by the regulators. We have one of the strictest EMF levels – let’s say top five anyway – in Europe and it takes at least one and a half years to get permission for a site, so a lengthy process. Still we [thrive] in this situation. Why? Because we invested in quality, quality, quality. Let me give you another figure. From a customer entering the shop to having a fixed broadband service it takes 48 hours in 95% of cases.”
“In the last years our focus has been on fixed and mobile broadband. With continued investments we achieved great result. Today we have more than two-thirds of the households in the country are passed by fixed broadband. Our focus has always been both on quality and efficiency. We might be the country with one of the lowest ARPUs in Europe, however, we do not make any compromise on the quality. This is why both in fixed and mobile services, international companies and organisations choose us as their preferred partner.”
He continued, “We are starting [to deploy] 10Gbps in our fixed network. Bulgaria has one of the strictest EMF levels. I would say we are in the top five in Europe and it takes at least one and a half years to get permission for constructing a site. It is a lengthy process. However, we strive to work and have constant dialogue with the Bulgarian regulatory body [in order] to be able to improve the conditions. Even if those conditions are not always in our favour, we still [thrive] in this situation. Why? Because we invest in quality, quality, quality. Let me give you another figure. From a customer entering the shop to having a fixed broadband service in its home or office it takes 48 hours in 85% of cases.”
Quality is certainly rising rapidly up the agenda for everyone. Alexander Stock, CTO of A1 Austria, put it like this: “On the business and the residential side, the perception of quality has changed throughout Covid. Before when people were at home, if the service was interrupted or they saw a few pixels when they were watching Netflix, it was fine. Now people work from home and are bound to video calls. If service is interrupted, they call us. We want to return to people paying for quality.”
Businesses need solutions
Vodafone Romania’s Buliga commented, “One of the best days of my career was during the pandemic when the CEO of a big company sent us an email that I will keep forever – we circulated it round our company. He thanked us for helping him move his entire business to work remotely in a few days, which he never thought possible… He needed a solution and software as a service, because everything was bare metal in his company.”
Vodafone Romania had many of the elements already, because it was providing them to other business customers, but, he explained, “Some of them we tweaked or invented in that week.” He takes issue with operators referring to themselves as telcos. In his view, “We are more and more technology companies. We need to accept this and transmit the message.
“We have provided solutions on top of connectivity for some time: digital is here and we play a big role in it. This is our strategy and what we do daily. We treat ourselves that way and everything we do is as a technology company. We in-source development, write software, bear the cost of development and design solutions – everything is on top of connectivity… We differentiate ourselves through what we put on top – the platform services we entered it into.”
Berger of Telenet, said, “It’s not [that] we lack faith in getting growth out of our networks. Otherwise we would not invest in them or believe in the new features. The question is the proportion between the investment and growth. Let’s not forget that the investments are not only in the network, but transformation costs a lot of money and in this next wave we’re going to see heavier investment in digitisation. To digitalise properly, to act and be agile and deliver quickly at front end, you need a very, very structured system at the backend, which is where we all carry a lot of legacy, which is hindering us.”
Not everyone supports this analysis, though. A1 Austria’s Stock said, “I agree that regulation hinders us a lot in many aspects, but I do not agree with the argument of the legacy. I think what hinders us there is our continuous efforts to connect new features with old: if I leave the old [system] where it is and build new features with state-of-the-art technology, then those investments are nothing like they were in the past when we typically needed a three-digit million euro sum for a business transformation.”
He continued, “We have made one major mistake in the last few decades and that is on the technological side – we have too much focus on transformation. Those projects typically take five to seven years – so in seven years’ time maybe you’ll get what you need today. We all know about Kubernetes, or real-time deployments and so on, but you don’t need them in your backend – you need to be quick at the front end and for the customer. This is where [digitalisation] needs to be applied and it’s the same when it comes to cloud.”
Transformation and differentiation
There were also considerable differences in approach on how to address differentiation. Zlatkov of Vivacom, said, “We should use the situation with the Covid to show how we could help them [but] the bottleneck is that to be successful we must be successful in all the different domains… We need several successful cases in different verticals to be showcases.”
Emmanuel Chautard, CTO at Orange Romania, agreed that the enterprise market is work in progress: “Technology is here to help consumers improve their day to day experiences, but also help businesses develop enhanced features for their products and higher efficiency for their work and processes. To bring extra value to the business customers we are always searching for new ways. When it comes to 5G or the Internet of Things, we are finding out how best to do it, for instance, with external parties or directly with customers or with vendors. We are using all possible means to find the right approach and help our customers be at the fore-front of innovation, create competitive edge and take the full benefits from the potential of the best telecommunications technologies.”
“The important component is to treat it as a two-sided business model with a developer community on board and where we [operators] gain reach beyond our own footprints, so we grow together,” said van Briel of Deutsche Telekom, adding, “Finding common ground in the industry on this issue is a big challenge. I think it's crucial to make sure we get a significant share of wallet.”
“Just taking the edge, which is only part of the opportunity, we don't know yet how big the business is, but we have some indication from first cases. For example, in the US we have wholesale messaging services that, for instance, can be used by Uber with a guaranteed latency SMS services which the company requires to let customers know exactly when and where the car has arrived and that kind of thing.”
This control of the network could be leveraged in many ways. Van Briel continued, “We can maybe differentiate ourselves with customers’ experience of cloud game services compared to an OTT gaming company… For us it’s really not just about the location and the network, but the ability to control connectivity and manage latency; to control things that can go wrong on the move for the mobile applications.”
The power of the network
Fotis Karonis, CTO of BT Enterprise, also commented, “We haven’t tapped into every power of our network… From the technology angle in the network, we need repeatable capabilities that serve many industries – that’s the most efficient approach.
“We can enter into new territories of digital transformation, because as the 5G ecosystem and standards evolve, yes, we can get network slicing, but also our device ecosystem has evolved into different areas in IoT, in wearables, etc. We should orchestrate these types of services to gain territory from system integrators and people like the over-the-top players that want to take our market. We should not think that our industry is unmovable. It is a dynamic industry. We need to grow in territory, we need to grow in services.”
A1 Austria’s Stock said, “This is where we are going to differentiate ourselves. Some of us going one direction, some the other… Some industries will want to do it themselves, others will want to outsource, and there’s potential for us where it’s right for us. We need to be careful not to diversify too much, because I think we cannot come up as experts in all brackets, but we could play a major role in selective ones.”
Vafiadis of BT Consumer added, “It’s a combination of the things that [we have] mentioned. If you don’t digitalise, if you don’t become agile, if you don’t invest in networks, if you don’t think about how you can use the different networks that are available or converge, you’re going to get left behind. We have to move on and these are our only options – it’s a multi-pronged, multi-faceted kind of strategy that is all encompassing, to be successful.”
The shortlist for our CTO of the Year Awards 2020 and participants in the roundtable
Radoslav Zlatkov, CTO, Vivacom Bulgaria
Nathalie Vafiadis, CTO, BT Consumer
Alexander Stock, CTO, A1 Austria
Fotis Karonis, CTO, BT Enterprise, a former CTO of the Year
Elmar Grasser, CTIO, Sunrise Communications, one of last year’s winners
Walter Goldenits, CTO, Deutsche Telekom, represented by his colleague, Thomas van Briel, SVP Architecture & Strategy
Emmanuel Chautard, CTO, Orange Romania
Catalin Buliga, CTO, Vodafone Romania – Gamechanger CTO of the Year 2020
Micha Berger, CTO, Telenet (Belgium) – Trailblazer CTO of the Year 2020
Also taking part were:
Annie Turner, Editor, Mobile Europe & European Communications, one of the judges
Bengt Nordström, Managing Director at Northstream, part of Accenture and one of the judges
Kester Mann, Director, Consumer and Connectivity at CCS Insight and one of the judges
Mounir Ladki, Co-founder, President and CTO of MYCOM OSI, sponsor and judge
Caroline Gabriel, Research Director at Rethink Technology Research, could not join us, but was one of the judges