Tuesday, September 18, 2007

TeliaSonera on fixed-mobile convergence

There was supposed to be an article in Kapitāls, the Latvian language monthly business magazine that I write for about fixed-mobile convergence. I was off in the US for the Hewlett-Packard event, but I did research ahead of that and was reluctantly ready to write the piece when I got back (there was a lot else to do). OOPS! Seems the editors forgot about it, so the best I did was to have a small sidebar with one one my regular columns.
One of the things I did do in researching the unwritten longer piece was to send questions to TeliaSonera, since one of the points was that now that Lattelecom was doing an MBO, its most likely full-spectrum competitor would be Latvian Mobile Telephone (LMT), which, when all the privatization deals are finished, will be 100 % owned by the Swedish telecommunications group. Helped by Niklas Henricson, the secretly :) half-Latvian member of the TeliaSonera press team, I did a kind of e-mail interview, which was answered by Anna Augustson, the head of communications for TeliaSonera's Business Area Mobility Services. Here is the e-mail "interview" in full, edited just to remove some explanatory links that Anna added:


TeliaSonera seems to have internally adopted extensive fixed wireless convergence with many /all of your employees carrying mobile phones that ring when their fixed line is called (via an inhouse wireless?) and apparently switch to the GSM/UMTS network outside the offices. Is this now the emerging/preferred solution for business in Sweden? ) If I were to arrive with a staff of 100 and take two floors in building in Stockholm, could I run a business with, say, one very fast internet connection (maybe gigabit speed), picocells, WiFi (for the PC network) and slightly modified mobiles for all staff (flat rate, untariffed calls among colleagues, GSM/UMTS at corporate rates outside the office, or maybe VOIP over HSDPA)?? Field staff would have HSPA laptops, etc.

The migration from traditional fixed telephony to mobile and Internet-based services in business and for residential customers is one of the clearest trends in telecommunications right now. Basic services like voice telephony will no doubt increasingly be replace by wireless access, regardless if it is an office environment or out in the streets, in the home etc. And to a large extent, we will see data go the same way as voice and be provided with wireless access.

On 28 September, and as the first mobile operator in Sweden, TeliaSonera is introducing a new solution for telephony combining features of fixed and mobile telephony, based on UMA (Unlicensed Mobile Access). With Telia Home Free, the mobile phone is being integrated in residential telephony, making mobile communications easier and cheaper. The telephone functions as an ordinary wired phone in the home (through WLAN) and subscribers can keep their current fixed line number. When a person leaves home, an ongoing call is switched automatically to the mobile network. Customers can call at a lower rate at home and also use their phone as an ordinary mobile handset when they leave home. Calls to all fixed line numbers and Telia mobiles in Sweden cost SEK 0/minute when made from home. Calls to all Telia mobiles in Sweden, including the household’s IP mobiles, cost SEK 0/minute with the Telia Mobile to Friends subscription. Calls answered on the fixed line number, outside the home, cost SEK 0/minute. The very same service was launched by Telia in Denmark last year, and will be launched by the fully TeliaSonera owned Netcom in Norway in the autumn.

It should be noted that the solution TeliaSonera has adopted internally (as referred to in the question) is using the same network inside and outside the office (GSM/UMT), combined with a local radio solution to handle large number of simultaneous calls and to ensure sufficient coverage.

However, for data, we offer the Connect Pro service which switches between networks depending on availability and location. Connect Pro customers can access the Internet and their organisation’s intranet either through GSM, UMTS or WLAN (TeliaSonera’s WLAN service is called Home Run).

In Norway and Denmark we have launched a service for our business customers called the Wireless Office. It’s a solution based on mobile telephony replacing the fixed phone; subscribers have one mobile phone and one number with untariffed calls to colleagues and reduced tariffs for other calls. The Wireless Office will be introduced in Sweden shortly.

So to conclude: Yes – you could run a business the way as it is described in the question, with a fast internet connection, WiFi for the PC-network and a telephony solution based on the Wireless office. However, as of today, we do not offer VoIP over HSDPA.

Having such an offer in Sweden, how likely is it to be implemented in your Baltic subsidiaries, especially Latvia, where you will no longer have a fixed network operator when Lattelecom is sold off to management and employees?

First of all, it should be noted that negotiations regarding our ownership in Lattelecom and LMT are on-going and any comments in this respect would - before an agreement is reached - therefore be purely speculative.

However, on a more general note, it can be said that having full ownership means that we can fully draw on the advantages of the TeliaSonera Group thereby strengthen our position as well as our offerings in a market in terms of synergies, purchasing power, faster access to new services, faster development of mobile data, and overall better prices on a lot of services needed for mobile operators. It also means that new services, like the service you describe and services like Telia Home Free and Telia Wireless Office, can be rolled-out in the market.

It should be noted, though, that we do roll-out HomeFree also in our markets where we have a large market share in fixed communications (e.g. Sweden), since we truly believe in the fixed-mobile migration and we want to take lead in this migration. To roll out a product like HomeFree will always be a specific decision for every market to make, based on local circumstances.

How will wireless vs fixed "footprint overlap"develop over the next few years -- by which I mean, the basic DSL offering in Latvia is 2Mbps, while HSDPA can get you 3.6 Mbps all things being optimal. This covers most ordinary surfing needs and even videostreaming. You can also get 10 Mbps DSL (in Latvia) with a IPTV package, but apparently that can be matched by an HSDPA upgrade (the technology goes up to 14.4 Mbps). In Sweden, some places (Kista) have 100 Mbps internet, but it is said wireless could also hit those speeds (WIMAX on steroids??) So this is how the "footprints" overlap, except you can take mobile or nomadic solutions anywhere within coverage, but even fiber to the home stops at the door if you go out.

Speed is a constantly moving target: Today we can enjoy access speeds which we could not foresee a couple of years ago. But both wireless and wireline/fixed access speeds are developing simultaneously and we do have a decent gap between the two access technologies.

Wireline will increasingly be focussed on providing the backbone infrastructure, access to radio points and also the really heavy connections to e.g. offices. As there’s a limit to what we can do in the wireless world there will always be a need for wireline/fixed access.

In general, the basic communications needs will be based on wireless access complement with wireline/fixed access when needed.

What is the degree of adoption of totally wireless solutions in Sweden (among small/medium businesses) as described in the first question? Any future trend predictions?

In the business segment (SMEs), and according to our own research, we estimate that 2% of the companies have a netbased mobile switch (i.e. a general mobile switch, and not a solution that switch between networks depending on the users location (in the office, outside the office etc).

Since you still own and run a fixed network, what will be its function in an increasingly wireless environment? Will it merely be a "backbone to the home/office" and carry. say, HD TV on demand, telepresence, other services beyond the bandwidth of wireless?

As stated above, wireline will increasingly be focussed on providing the backbone infrastructure, access to radio points and also the really heavy connections to e.g. offices.

In general, we see that the basic communications needs will be based on wireless access complemented with wireline when needed. Basic services like voice telephony will no doubt be replace by wireless access regardless if it is an office environment or out in the streets etc. And to a large extent, we will see data go the same way as voice and be provided with wireless access. We already have clear examples of this development today with wireless hot spots in cafés, restaurants, hotels etc. and the development of HSDPA in the public environment. But of course, behind all those customer accesses there is cable.

No comments: