CTO of Sunrise Communications: Raising a workforce’s self-belief trumps technology

CTO Interviews

Elmar Grasser won one of our CTO of the Year 2019 Awards for leading his company’s pioneering roll-out of 5G across Switzerland and so much more.

Sunrise had one of first 5G commercial launches in Europe, but his success, though, is probably more about his transformative effect on the culture of the operator than technology, as he explained to Annie Turner.

You don’t have to spend long with Elmar Grasser to understand just how committed he is to excelling at his job and how much he wants his company to excel. At the same time, he has a relaxed demeanour, and when he arrived at the CTO Awards roundtable and ceremony in London in May he looked remarkably fresh-faced for someone who had just stepped off a long-haul flight.

He explained, “I sleep best on planes. When I hear the engine, I fall asleep. It seems to be a reflex” – which is just as well given how much travel his work involves.
Travel aside, that ability to switch off has no doubt stood him in good stead. Six years ago, when he joined Sunrise Communications as its CTO, the company was perceived by consumers and its own network staff as a poor quality, cut-price and remote competitor to the mighty former incumbent, Swisscom.

At the beginning

Grasser said, “It was a challenge in the sense that there was quite a big gap in terms of perceived and real quality between the networks in Switzerland. I would say Sunrise had the worst reputation… and to be honest, in terms of quality, it was something I perceived, too, using the network. I was surprised to find that in Switzerland.”

Sunrise has turned this around to such an extent that Grasser laughed, “I’m very much convinced that this Swiss level of quality we talk about is only where it is now because a non-incumbent raised the quality to such a level we were starting to attack the incumbent, which was a surprise, I guess, and a big one.”

It wasn’t just that Sunrise’s coverage had ‘holes’ in it, as this turned out to more about the network not being optimised than a lack of investment. The reasons for this were highly revealing and included poorly managed outsourcing, split responsibilities, and many recent changes in management and to strategies.

“When you have lots of changes in the management and there is no clear guidance from them, as was the case in the network environment, then people just look after themselves, protect themselves and are not cooperating.”

Grasser found, “Not much self-confidence that we would be ever able to get to the level of where Swisscom was and we had to change that. And [to do that] you have to be very ambitious, which is not easy. In such a situation… you have lots of people who don’t believe you and you have to convince them. You need to build small successes to give people confidence, so that they can see it is possible.”

External issues

Grasser had to address Sunrise’s relationships with its outsourcing partners, which were heavily criticised by staff: “Basically, there was not one vendor that was doing well, so my analysis was that might be both an internal and external issue.”

The partner agreements “were wrong from the spirit of responsibility and commercially not right. That is when you have the advantage of your experience from working in another country.” Grasser joined Sunrise from E-Plus in Germany.

He explained, “You know what makes financial sense, like how much operating a network [and an IT system] should cost, taking into account the price levels are different. With that benchmark view, you can go into proper negotiation and see what is achievable.”

He decided that partners had too much responsibility for things that should be in-house, such as network planning and engineering and he brought them back into the company. “That was a huge change in the contract: we were taking people back and saying this is a core responsibility of an operator, and I’m still convinced that this is the right thing.”

Some operational tasks are still outsourced, but, “We draw a very clear line about where the responsibility is for the partner and where the responsibility is on our side”.

He added, “I put the commercials into what I thought would be the right balance. If one partner has a nice advantage but the other suffers, that’s not going to be a long lasting… If you have both a win-win situation, that’s when you can start [competing], because then you’re a strong team and together you are successful.”

When Grasser started at Sunrise, the Network Promoter Score (NPS) was very low, but it has increased more than 50% to a current high customer satisfaction level and is improving every year.

He noted, “When you have a bad reputation, that reputation stays for a while. You have to build up confidence with the customer as well; you have to be patient.” He added that benchmarking has been immensely beneficial to Sunrise as when you communicate the positive findings of a third party, “it really jumps into the perception of the customer and then you see the NPS really moving on.”

Other benchmarks that Sunrise has excelled in include the Internet Provider Customer Barometer 2019, published by PC Magazine and PCgo Magazine, and measured across Austria, Germany and Switzerland, the Mobilfunk Shop Test and the Connect Mobile Network Test.

Wider success and responsibilities

For Sunrise’s CTO, network quality is about more than competition with rival operators, though. He believes that, “Infrastructure competition is extremely important if you want to raise the quality in a country.”

He observed that in some other European markets it is common to have a strong incumbent with the second biggest rival a big distance behind and the third a long way behind that. The danger is that this is accepted as a sort of natural order and the operators fail to grasp how poor their networks really are, and how damaging the lack of competition is for the wider economy.

Grasser did not name any specific examples, but a look at the FTTH Council’s ranking of full-fibre penetration in European countries is surprising: some of the biggest economies are the biggest laggards, while others that have emerged from very difficult times are way up the table, such as the Baltic states and Spain.

He acknowledged that, “In Europe it is very hard [for telcos] to have rising revenues [as] we must invest a lot and that is one of the root causes of why we don’t have good infrastructure… At the moment, it is not easy to convince people to invest in the European telecoms companies, because the revenues are under pressure.”

Closer to home

Regarding Switzerland, Grasser said, “We want to invest and we want to invest in 5G, but it is hard to execute this because we have so much trouble with roll-out” due to permissions being withheld.

The country has stringent rules in place regarding electro-magnetic emission levels and the Swiss operators have been plagued by health scares concerning 5G, which, although they are without foundation, are making it impossible to deploy 5G in many cities.

Much of Sunrise’s 5G deployment is in rural areas and towns rather than city centres. Grasser said, “There is much public resistance and not much cooperation at the political level. We were hoping for some relaxation [of the rules], but it’s been almost the opposite. We’re meeting headwinds.”

The decision regarding the relaxing or otherwise of the rules is yet to be made, but in the interim it creates a difficult situation.

Grasser sees 5G deployment being slowed as a result of fake news and scaremongering, and that is bad for the economy. He thinks it behoves the various relevant authorities “to create an environment, where the operators are prepared to invest, [so that] they can bring the benefits of 5G quickly to the industry and the consumers.”

He added, “In some countries, like Germany, I understand that the government says if you want to roll out 5G then public buildings are available as [mast] sites. That would be a dream for us. We don’t have that situation.”

Remaining goals

What’s next for Sunrise? Naturally nothing ordinary: Grasser said, “We are aiming for the defect-free network, like we have for electricity and the water supply… Coverage and network reliability are the two factors we need.”

Another issue he wants to address is his company’s digital interface with customers. He wants them to be able to interact with Sunrise via apps to “manage their subscription, see how big their bill is and where you can buy packages.”

He said, “They want to have that seamlessly, without human interaction. That is a technological aspect where we as operators need to be extremely good… that’s one of the extreme cases I’m focusing on.

“The customer is always the focus. It needs to be easy for them to get from us what they want via digital interfaces,” but always with the option of going into a shop or contacting a call centre.

What about the tech?

How does Grasser feel about the challenges posed by virtualisation, automation and artificial intelligence? “Sometimes there is a danger that if you start focusing on these things that, as a technician and an engineer, you are drawn into a world where you trying to solve a problem for yourself, not for the customer. The most important thing I need to think about [is] how can I provide services, especially in that context, in the B2B world, for B2B customers?

“It’s extremely important to differentiate between the goal and the means. I’m a person from the mountains [the Dolomites] and the goal is to get to the top of a certain mountain, the rucksack and the shoes are very important, but often engineers focus on the shoes and the rope, then forget the mountain top.

“It’s extremely important to engage in these topics, but… you start with the goal [for your customers] then figure out how to meet it, rather than start playing around with the technology and see what you can do. The goal must never leave your mind.

“The new technologies are the biggest revolution, but they are tricky. You need to have really good people to [develop their use],” he added, but one of the big issues facing telcos is that graduates would rather go to hyperscale web companies or start-ups.

Grasser agreed it is it a challenge that telco is seen almost as an old economy industry – ironically, given that it is the bedrock of the digital world – but there is another issue, too. The people who are trained in and dedicated to software development typically come from outside Europe’s bigger economies.

Enrichment and paucity

On the one hand, he is delighted to employ people with the right skills from any background or nationality, given that he thinks diversity brings a higher quality team and business. On the other, though, he expresses disquiet about why generally richer European countries do not teach or promote these skills as key and desirable.

In particular, he is concerned that in the longer term this situation is not sustainable – relying on resources from outside a country that are fundamental to its success.

He said, “Software development is the most important topic going forward. And every company has to see that, or at least telecommunication companies need to see it as a core competency, not something that somebody else does for me. We are happy to have people from Romania, from Delhi, from Belarus, from the former Yugoslavia, where we have partners with the right resources… but I believe many people in these countries understand the only way they can [progress] is probably by being experts on this technology.

“Our education systems don’t take this enough into account… We still teach Latin in European systems, but we don’t learn how to use the most important tool in the world of the future… Our children are all consumers, not programmers.”

He continued, “You need [these skills] not only in your professional life, but in your private life. You need to understand some mechanisms in terms of data protection, security and so on.”

He concluded, “We are more fearful about technology. In our society, if you talk about AI, robotics and so on, it’s associated more with the fear of losing job than as an opportunity. That’s a general observation I have when I travel in many different countries… We see the negative points. I don’t want to put them aside, but there is no way around software being part of our future and one of the most important parts of being economically successful.”

JUDGES’ VERDICTS
Bengt Nordström
CEO, Northstream, part of Accenture

The CTO of Sunrise in Switzerland, Elmar Grasser, is a well-deserved winner of the Mobile Europe | European Communications award for CTO of the Year 2019. During his six years at Sunrise, Elmar has taken the network service from poor quality to ‘Swiss-quality levels’ which is evidenced by the rising Net Promoter Score and other benchmarks scores that the company achieves every year.

One reason that he has been so successful on this ‘quality journey’ at Sunrise is his ability to create an atmosphere of confidence within the organisation that it can set and achieve ambitious targets for network quality and compete with anyone.

Kester Mann
Principal Analyst, CCS Insight

Elmar Grasser was a popular choice with the judges, having played a pivotal role in Sunrise’s pioneering push into 5G. We were particularly impressed with its innovative 5G for people strategy that seeks to bring disruption to the home broadband market.

Under Elmar’s influence, Sunrise has claimed various technology firsts and scooped a flurry of network awards, despite tough competition from a very dominant incumbent rival. Crucially, its network’s progress has contributed to good customer growth in both consumer and enterprise segments as well as strong improvements in Net Promotor Scores.