www.totaltele.com FEBRUARY 2013 BUSINESS ANALYSIS FOR TELECOMS PROFESSION ALS NEWS & VIEWS TECHNOLOGY BUSINESS GEOGRAPHY EVENTS Dates for your diary and details of the must-attend events in the telecoms industry over the coming months Continental Drift: North America leads the world in LTE connections, but things are hotting up further south Healthy Ambition: On the record with Nikki Flanders, the new managing director at O2 Health Further Education: Telecoms operators beginning their LTE journeys can learn a lot from the first movers Analysis of the big global stories, opinion, and news in brief from the past month in telecoms www.totaltele.com W elcome to the first issue of 2013, complete with a fresh new look designed for being read on the move–on your tablet or smartphone, that is. It’s appropriate then that it’s all about LTE and comes as some of Europe’s biggest telecoms markets are finally making the move to more advanced mobile services that will enable users to consume even more content on a mobile device. January brought LTE announcements from operators in Italy, France and the UK, where rollouts so far have concentrated mainly on major urban centres. Being late to the LTE party has its benefits though (see p.10). The LTE ecosystem has advanced considerably since TeliaSonera launched the world’s first LTE services in late 2009. Furthermore, the newcomers can learn a lot from those with more experience, particularly when it comes to pricing and marketing services. This might be the LTE issue, but far be it from us to neglect the rest of the industry. Our ‘News & Views’ section contains analysis of the latest trends, including the potential for MVNOs in China, the difference between LinkedIn and Facebook, and BT’s IPTV prospects. We hope you enjoy the new layout and functionality. Next month we’ll focus on the power of the brand and give you the lowdown from Mobile World Congress. Mary Lennighan, editor [email protected]@TelecomEditor A new-look Total Telecom+ launches as Europe’s mobile operators get serious about LTE FRESH THINKING OPINION FURTHER EDUCATION Three years after the world’s first LTE launches, early movers in the space share their experience with the newcom- ers p.10 FEATURE 1
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www.totaltele.com
february 2013Business analysis for telecoms professionals
NEWS & viEWS tEchNology buSiNESS gEography EvENtS
Dates for your diary and details of the must-attend events in the telecoms industry over the coming months
Continental Drift: North America leads the world in LTE connections, but things are hotting up further south
Healthy Ambition:On the record with Nikki Flanders, the new managing director at O2 Health
Further Education: Telecoms operators beginning their LTE journeys can learn a lot from the first movers
Analysis of the big global stories, opinion, and news in brief from the past month in telecomswww.totaltele.com
Welcome to the first issue of 2013, complete with a fresh
new look designed for being read on the move–on your tablet or smartphone, that is.
It’s appropriate then that it’s all about LTE and comes as some of Europe’s biggest telecoms markets are finally making the move to more advanced mobile services that will enable users to consume even more content on a mobile device.
January brought LTE announcements from operators in Italy, France and the UK, where rollouts so far have concentrated mainly on major urban centres. Being late to the LTE party has its benefits though (see p.10). The LTE ecosystem has advanced considerably since TeliaSonera launched the world’s first LTE services in late 2009. Furthermore, the newcomers can learn a lot from those with more
experience, particularly when it comes to pricing and marketing services.
This might be the LTE issue, but far be it from us to neglect the rest of the industry. Our ‘News & Views’ section contains analysis of the latest trends, including the potential for MVNOs in China, the difference between LinkedIn and Facebook, and BT’s IPTV prospects.
We hope you enjoy the new layout and functionality. Next month we’ll focus on the power of the brand and give you the lowdown from Mobile World Congress.
When customers get what they want from you, they become your best advocates. Especially when they get it exactly when and how they want it. Ericsson helps you REALIZE the kind of user experience that gets people talking. Our OSS/BSS keeps you and your customers informed and empowered in real time, giving you end-to-end visibility and control — from network to user interaction. So you can deliver the wow factor customers can’t wait to share.
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a round-up of the major stories in telecoms in the past month, as reported in our daily news service www.totaltele.com
Asia Communication Awards 2013Celebrating the success of Asian telecoms, globally
20 June 2013 • Conrad Centennial, Singapore
ENTRY DEADLINE: 15 MARCH 2013
Enter online at: www.asiacommsawards.comFor assistance with your entry please email [email protected]
Sponsored by:
Organised by:
MobIlE CUSToMERS IN CHINA (MIllIoNS) End 2012 Dec 2012 End 2011 Dec 2011 (including 3G) net adds (including 3G) net addsChina Mobile 710.30 (87.93) 3.03 (5.50) 649.57 (51.21) 5.25 (3.21)
China Unicom 239.31 (76.46) 3.10 (3.13) 199.66 (40.02) 3.69 (3.49)
China Telecom 160.62 (69.05) 2.58 (3.20) 126.47 (36.29) 3.08 (2.94)
ToTAl 1,110.23 (233.4) 8.71 (11.83) 975.70 (127.52) 12.02 (9.64)
Source: operators
IN bRIEF
poRTUGUESE MERGERMobile operator Optimus will merge with pay-TV provider Zon to create Zon Optimus after the boards of both companies gave the go-ahead for the deal.
SoFTbANK SEllS SHARESJapan’s Softbank agreed to sell shares in eAccess to 11 companies, including Nokia Siemens Networks, Samsung and Ericsson, reducing its voting rights to 33.29% in a bid to mollify the regulator.
MTS UZbEKISTAN bANKRUpTRussia’s MTS filed for bankruptcy in Uzbekistan on the grounds it cannot pay the fine levied on it following last year’s licence dispute.
NEW HoRIZoNS Orange launched a new subsidiary, Orange Horizons, to generate new revenue streams from outside its operating footprint, focusing primarily on Europe and Africa.
VIRTUAllY ACCESSIblEChina’s Ministry of Industry and Information Technology is reportedly consulting on plans to allow virtual players into the country’s mobile market. On the face of it, that looks like a good opportunity for someone keen to break into a massive market with significant growth potential; at end-2012 there were 1.11 billion mobile subscribers in China–penetration stood at around 83%–and the big three operators were still recording net adds of 2.5 million-3 million per month each.
However, market newcomers will not have an easy ride. The incumbents are unlikely to sign an MVNO deal with any company looking to compete on price alone, notes Ovum senior analyst Carrie Pawsey. “Any potential MVNO will have to bring something new to the table for its host,” she says, predicting that Chinese retail brands could be the first to launch, since they can offer access to a new market segment.
Further, the two biggest players might be resistant to MVNOs entering the market altogether, although China Telecom, which itself operates as an MVNO in Europe, could be more open to a wholesale strategy, Pawsey says.
And while the Chinese mobile market might see some new brands in the near future, they will likely be local names.
oRASCoM UpS WIND STAKEOrascom Telecom increased its indirect stake in Canada’s Wind Mobile to 99.3%, subject to regulatory approval.
TElSTRA GoES oTT Australia’s Telstra created a Global Applications and Platforms unit to help it compete in the over-the-top (OTT) space.
CUbA GETS CoNNECTED The ALBA-1 cable linking Cuba with Venezuela began carrying traffic two years after it was completed.
pERU lICENCE RENEWAl The Peruvian government renewed Telefonica’s operating licence in return for certain concessions from the Spanish telco, including lower tariffs.
EU TARGETS IbERIAThe European Commission fined Telefonica €66.9 million and Portugal Telecom €12.3 million for the pair’s non-compete pact in the Iberian peninsula. Both companies plan to appeal.
MANY STIll SEE THE HAND oF THE HARD-NoSED bUSINESSMAN IN DISH’S CURRENT DEAlINGS
pRoFIlE
MobIlE DISRUpToRCharlie Ergen, co-founder of US satellite TV provider Dish Network, has long been considered a disruptive force in the TV space. Now, his company is looking to have a similar impact on the telco side of the industry.
In January Dish Network tabled a $3.30-per-share offer for Clearwire, beating a $2.97 bid lodged by the mobile broadband provider’s majority shareholder Sprint last year. The move sparked debate over whether Dish really believes it has a chance to take over Clearwire–a full takeover seems unlikely given that Sprint owns just over half of it–or whether it is a strategic play aimed at boosting Dish’s spectrum assets or even bringing about a mobile network joint venture with Sprint. When Dish gained FCC approval to use its satellite spectrum for mobile services in December it said it would “consider its strategic options” before making its next move.
Ergen stepped down as Dish Network CEO in June 2011, a post he had held since December 1980 when he founded the company’s predecessor, EchoStar Communications; Dish launched in 1996. Many still see the hand of the hard-nosed businessman in Dish’s current dealings though.
NEW bHARTI CEoSanjay Kapoor resigned as CEO of Bharti Airtel’s Indian and South Asian operations. Gopal Vittal will take over as India CEO, while South Asia will become part of the telco’s international division.
oI CHIEF oUTJose Carneiro de Cunha was named as the new CEO of Brazil’s Oi, replacing Francisco Valim who has been in the role since June 2011.
bEZEq SEEKS lEADERAvraham Gabbay resigned as CEO of Bezeq, giving the Israeli telecoms operator six months to find a replacement.
NYbERG qUITSTeliaSonera chief executive Lars Nyberg resigned in the wake of a corruption investigation regarding the telco’s activities in Uzbekistan. CFO Per-Arne Blomquist takes the helm on an interim basis.
HoW bT STolE CHRISTMASBT is making a serious effort to bolster its pay-TV offering, BT Vision. In early 2013 the UK incumbent brokered content deals with Viacom to enable it to add MTV, Comedy Central and Nikelodeon to its line-up, and last year it spent £738 million on UK top-flight football rights.
But not everyone’s happy. The upgraded version of the BT Vision box software does not support certain features, although BT says it is working on those. Worse, BT carried out the upgrade for some customers in mid-December, giving them a couple of weeks warning that it would delete all the content saved on their box. Cue some irate customers who had made recordings to watch over the Christmas break. But BT insists there is no problem. Having “given customers advance notice of this, along with several reminders, we’ve seen very few complaints,” it told us.
Customer satisfaction aside–BT had 770,000 TV customers at end-2012 compared to BSkyB’s 10.36 million, incidentally–BT also runs the risk of alienating would-be subscribers by sending the message that they do not have control over the content on the box in their home. Amazon came up against a similar issue in 2009 when it outraged early Kindle adopters by deleting content from their devices. But while Amazon’s reputation suffered in the short term, it has since built up a formidable position in the e-reader space. So maybe BT has little cause for concern after all.
MAKING CoNNECTIoNSThe differing fortunes of two of the world’s biggest social networks shows that for investors it’s not all about bums on seats. LinkedIn in January reached 200 million members, a significant milestone but a drop in the ocean compared with Facebook’s 1 billion users. However, LinkedIn’s shares are trading around three times higher than its $45 May 2011 IPO price, while Facebook has yet to reattain its May 2012 IPO price of $38. Facebook’s share price slipped back below $30 last month when it launched Graph Search–to enable users to search the content they and their friends and connections have shared on Facebook–because while analysts agree it will be a useful tool for generating advertising revenue, Facebook itself provided little visibility on its plans. LinkedIn, mean-while, generates much of its revenue from premium subscrip-tions and its recruitment business, in addition to advertising. So, the message is clear: having a lot of users is not enough, you also have to be able to monetise them.
SUIToRS lINE Up FoR MARoC TElECoMMaroc Telecom agreed a 10.08 billion dirhams (€900 million) investment plan with the government for the 2013-2015 period that will also see the creation of 500 jobs. The Moroccan incumbent said it will focus on the rollout of fibre. Owner Vivendi is reportedly keen to offload its 53% stake in Maroc Telecom and a number of global telcos have been linked with the shares. Etisalat announced it has submitted a preliminary expression of interest, as have Qtel and KT Corp. And France Telecom said it has its eye on the company, but will proceed “very cautiously”.
pRobE HITS MYANMAR plANTelcos have until 8 February to register their interest in applying for the two nationwide operating licences Myanmar aims to allocate in the first half of this year. There has already been significant interest, with Bharti Airtel, SingTel, Axiata, Telenor and ST Telemedia reportedly having submitted preliminary documents. The country has signifi-cant growth potential; at the end of 2012 there were 5.44 million mobile subscribers–9% penetration–and just 604,500 fixed lines, according to the Ministry of Communications and IT (MCIT). However, Myanmar presents a difficult operating environment. SIM cards cost hundreds of dollars, often more than the average wage. The government is working to bring the cost down and, following the resignation of telecoms minister Thein Tun, last month launched a corruption probe to tackle questionable practices at state-owned monopoly operator Myanmar Posts & Telecommunications (MPT). The investigation could well delay the liberalisation process.
SNApSHoT
INDIA pRICE HIKE Bharti Airtel and Idea Cellular increased call charges to address falling margins and rising costs.
US EYES WIFI FCC chairman Julius Genachowski detailed plans to free up 195 MHz of unlicensed spectrum in a bid to increase available band-width for gigabit WiFi.
AlU WINS IN INDIAAlcatel-Lucent won a $1 billion contract to manage Reliance Communications’ networks for eight years. 4,000 staff will transfer.
CISCo bUYS AND SEllSCisco Systems agreed to pay $475 million for Israeli mobile network management specialist Intucell. It also sold its Linksys home networking unit to Belkin International.
DIFFERING FoRTUNESZTE warned that it may post a 2012 net loss of 2.5 billion yuan-2.9 billion yuan ($400 million-$460 million), but will return to profit in Q1 2013. Meanwhile, rival Huawei predicted an increase in net profit in 2012 to 15 billion yuan ($2.4 billion).
oUTSoURCED ITNokia announced plans to outsource some IT opera-tions to India’s HCL and Tata. 820 staff, mostly in Finland, will transfer.
IN bRIEF
AT&T FlASHES THE CASHAT&T agreed to pay US$1.9 billion for spectrum licences in 18 US states from Verizon Wireless. It will also buy Atlantic Tele-Network’s retail operations for $780 million.
$1.1bN MACAU DEAlCable & Wireless Communications and Portugal Telecom agreed to sell their combined 79% stake in Companhia de Telecomunicacoes de Macau to Citic Telecom.
RoGERS SpENDS C$700MRogers Communications brokered a C$700 million deal for a spectrum licensing option and cable TV operation from Shaw Communica-tions.
AUSTRIA DEAlS CloSEHutchison 3G Austria completed the €1.3 billion acquisition of Orange Austria, following a lengthy regulatory battle. Telekom Austria’s purchase of Yesss! also closed.
To SEll oR NoT To SEll...There has been talk of Vodafone selling out of Verizon Wireless on and off for years. But now the rumours are gathering pace and such a deal, sizeable as it would be, is starting to look like a real possibility.
The latest round of speculation stems from comments made by Verizon CEO Lowell McAdam last month indicating that not only is he interested in buying Vodafone’s 45% stake in the mobile unit, but also that he believes his company has the ability to do so. That last point is up for debate: Verizon’s net debt stood at $48.89 billion at the end of 2012 and with many analysts valuing Vodafone’s shares at upwards of $100 billion, it is by no means certain that it could find the funds. Some suggest that a merger between the two or Verizon buying only part of Vodafone’s stake might be more likely.
Berenberg Bank values the stake at 6X EBITDA or $90 billion. “Capital gains tax remains the key stumbling block,” to a deal, the firm says, noting that at its valuation the tax bill would be $30 billion. That sum would rise to $46 billion at the 9X EBITDA valuation suggested by a number of other analysts. However, “compared to a few years ago there is no doubt that Verizon’s balance sheet is looking much healthier,” the firm added, pointing out that its net debt-to-EBITDA ratio stood at about 1.1X at the end of 2012 and is predicted to fall to 0.3X by 2015. As such, “Verizon’s capacity to do such a deal is improving.”
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But it would be a difficult decision for Vodafone. The UK mobile operator rejected Verizon’s attempt to buy its stake in 2006. It then faced pressure from investors to cash in and exit the US, but the start of hefty dividend payments in 2012 changed all that. Verizon Wireless paid out $18.5 billion last year and Vodafone returned much of its 45% share to shareholders. By trading what could become regular pay-ments from Verizon Wireless for a larger one-off sum, Vodafone could invest in its sluggish European operations; some suggest it could plough money into fibre networks, becoming a full service provider in certain markets. But that would probably not go down well with shareholders, who would expect to see a significant portion of the proceeds. Given the sums involved here, a deal will not be easy to pull off, but it is certainly not out of the question.
the old saying ‘better late than never’ applies in many situations, but in
the telecoms space there are times when the latecomers have an advantage over the first movers.
It is three years since TeliaSonera launched the world’s first commercial LTE networks. Many more have rolled out LTE in the interim and some major European markets are just getting started. Last month Orange launched consumer LTE services in Paris, Italy’s TIM added new locations to its LTE footprint, and EE switched on services in nine more UK towns.
The newcomers to LTE can learn valuable lessons from their longer-established peers, particularly when it comes to developing price plans and new services. And some of those operators are willing to share the wealth of their experience.
“The demand for high capacity data services is out there, no doubt about it, but don’t give the data away ‘for free’,” says Andreas Hamrin, press manager at Telenor Sweden, which launched LTE in November 2010.
But SK Telecom, whose LTE offering launched 18 months ago, advises
newcomers to focus on the basics first, namely “deploy-ment of a nationwide LTE network, development of diverse LTE technologies to ensure network quality...as well as diverse device line-ups,” says spokesperson Irene Kim.
Having launched commercial services in late October, the UK’s first LTE operator EE is still working on the basics, but it believes it will benefit from launch-ing later than some other global telcos. “4G is a mature technology now...The hardware and software are on their third or fourth revision,” says Tom Bennett, director of network services and devices at EE.
When EE came to market there were well over 100 LTE networks in operation
worldwide, according to the Global mobile Suppliers Association (GSA). EE has a headstart on its domestic rivals–who are currently taking part in the ongoing UK spectrum auction with a view to launching LTE this summer–but at the same time it is able to take advantage of a much more advanced LTE ecosystem than that which faced TeliaSonera when it launched its first services in Sweden and Norway in late 2009.
At that time the sole device on offer was a Samsung-made USB dongle with an LTE chipset only; users required a separate one to connect to 3G. But as LTE technology has advanced, so have the devices, a critical factor in driving rapid uptake.
Some markets are more advanced than others when it comes to LTE, but newcomers to the space can learn a lot from the first movers.
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“The EE launch has come at a time when the LTE device market is much stronger,” says Bengt Nordström, CEO of Swedish consultancy Northstream. “The first problem that springs to mind when you think about the early LTE launches was the lack of devices: Telia expected the device market to take off faster than it did.”
EE had six smartphones in its line-up from day one, including Apple’s coveted iPhone 5. EE insists that its aggressive network rollout, coupled with a popular range of devices, will help the UK to close the gap on other LTE markets. But some are further ahead than others.
“SK Telecom offers 29 LTE devices, consisting of 21 smartphones, five tablets, two USB modems and one camera,” says Kim. “We plan to further expand our device line-up in 2013.”
SK Telecom launched LTE in Seoul in July 2011 and extended network coverage to 99% of the South Korean population in 11 months. It
has also rolled out voice-over-LTE (VoLTE) and LTE femtocells, and in January its LTE subscriptions reached 8.1 million, around 32% of its total mobile customer base.
Not everyone is as candid about their progress. LTE pioneer TeliaSonera does not regularly report subscriber figures but in May 2012 it publicly announced it had 140,000 LTE users in Sweden. However, in its mid-year report Swedish regulator the PTS said there were just 83,000 LTE subscriptions in Sweden as a whole, or 0.6% of the total mobile base.
Telenor Sweden is also playing its cards close its chest. “LTE is default in all our mobile broadband subscriptions, so the numbers will add up quite quickly as we continue to sell mobile broadband,” Hamrin says. “We’ve gone from offering LTE as a unique service, distinguished from 3G,” to including it in mobile broadband packages, he says. “Coverage has increased rapidly, much faster than 3G did 10 years ago, We expect
to have national coverage within this quarter,” he adds.
Southern Europe is still playing catch-up though. Italy’s TIM launched LTE in November and in January extended its network to eight new cities and seven resort areas. “Our goal is to reach more than 40% of the Italian population with this technology by the end of 2014,” said Telecom Italia COO Marco Patuano.
Also last month, Orange France made much of its commercial launch of consumer LTE services in a small area of Paris, while domestic rival SFR extended its LTE offering to the French capital’s business district. Meanwhile, EE plans to cover 39 towns and cities by the end of the first quarter, 50% of the UK population by the summer and 70% by end-2013.
But despite the efforts of some of Europe’s big players, there is still significant ground to make up.
South Korea, Japan and the US together account for 89% of the world’s LTE connections as of Q4 2012, according to Wireless Intelligence. And Ericsson predicts that while 50% of the world’s population will
be covered by LTE networks by 2017, Asia-Pacific will be above the global average with 60% coverage.
“The Southeast Asian and [North] American markets have really got on with 4G a lot quicker than they have in Europe,” admits EE’s Bennett. “As an engineer at heart, if I go to Southeast Asia and America and look at what they’re doing, I get envious and think there’s no reason we can’t do this, let’s get on with it.”
bACK To bASICSFor new LTE operators the networks themselves and well-thought-out pricing plans are critical to success.
“We’re really happy with the launch so far, The network has been very stable; one or two minor faults, but no major service outages,” says EE’s Bennett. “EE is under pressure to make the most of its headstart over its
UK rivals. “Our advantage in spectrum is nothing unless we build the best transmis-sion network,” says Bennett. EE has connected up 11,500 cell sites with Ethernet, including 2,500 with Gigabit Ethernet. It also aims to increase cell density and improve indoor coverage in its launch cities this year.
LTE operators must not neglect their legacy net-works. “It is extremely important that the HSPA network is of a very high standard because the depth of coverage in the early phase of LTE rollout won’t be great, and there will be a lot of fallback to HSPA,” Nordström says.
First movers in LTE also have the burden of setting customer expectations and dealing with the criticism if some feel their expectations have not been met.
“Operators need to make sure they don’t mislead
customers about what they can and can’t do on LTE,” advises Ovum analyst Matt Howett. If they fail to strike the right balance operators could end up with some users running up huge bills and others who are frustrated by what they see as restrictive data caps, he says. They may even struggle to convince prospective customers to upgrade to LTE at all.
Pricing and data allow-ances play an important role in managing expectations.
EE’s most popular contract costs £41 per month over 24 months and gives customers 1 GB of data and unlimited calls and texts. It has received criticism for its usage caps–although its tariffs compare favourably with LTE operators in other markets (see box)–and in January it launched new price plans, including a low-cost bundle offering 500 MB of data for £31 per month, and one aimed at heavy users that comes with a subsidised handset and 20 GB of data for £61 a month.
Howett says capped usage and premium pricing was the right thing to do. “They need to convince consumers that they really are investing a lot of money in this new technology and that it needs to be recouped,” he says. “In the early days, LTE tariffs represented a 100%-150% premium on 3G services. But [EE’s] LTE tariffs are priced at a much lower premium.”
Once new players enter the fray, competition in the
MoRE MoNEY, MoRE pRoblEMSEE has received stinging criticism in the UK about the cost and usage caps on its LTE tariffs, with some observers claiming its data allowances do not represent good value for money compared to what users currently enjoy on 3G. However, when equivalent contract plans in Germany, Sweden and the US are taken into account, EE’s prices are comparable in some cases and cheaper in others.
UK’s LTE market will inevitably focus around price and data. “I would not be surprised to see 3[UK] offer a bigger data allowance than the others,” predicts Howett.
Nordström adds that increasing uptake and competition will eventually erode the premium on LTE. “Operators will want to protect their market share,” he says. Indeed, Telenor Sweden’s Hamrin notes that prices for its Premium LTE package “have come down from SEK549 (€64) a month to SEK299 (€35). The market is highly competitive.”
Of course, the hard work doesn’t finish once the infrastructure is rolled out.
“Once mobile operators in the UK complete building
their LTE networks, in order to secure a meaningful number of subscribers, they will have to focus on offering more valuable LTE-specialised services,” SK Telecom’s Kim says.
For SK Telecom, this translates to content, and more specifically, video. Its flat-rate plans come with a 20,000 won (€14) monthly allowance that customers can spend on its T Freemium service, which offers TV shows, movies and books. Separately, SK Telecom also offers sports highlights and Mobile B TV, a mobile IPTV
service with 40 channels and 13,000 VoD titles.
Mobile operators in the UK do not have the same content assets as SK Telecom and consumers are typically sold mobile data plans simply as a gateway to the Internet. However, with Cisco predicting that video will account for 71% of all mobile data traffic by 2016–with LTE the major growth driver–there is a significant opportunity here for operators to tap.
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Asia Communication Awards 2013Celebrating the success of Asian telecoms, globally
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HEAlTHY AMbITIoNNikki Flanders, managing director at O2 Health in the UK, talks about her new role and the opportunities in the UK healthcare sector
When O2 Health announced the appointment of
Nikki Flanders as its new managing director in January it made it clear that she will be charged with accelerating the company’s growth in the UK health and social care sectors. Speaking to Total Telecom’s Nick Wood, Flanders shares her thoughts on the current state of the UK e-health market and where the opportunity lies for O2. However, it is not yet clear what the business model looks like for all the players in the e-health value chain.
Let’s start with a bit of background on you, and how you became MD of O2 HealthMy background is leading large transformation programmes within the retail and utilities sectors. I’m also a management accountant. I was brought into O2 UK just over a year ago to lead a major pro-gramme for 4G LTE, to define our 4G strategy. There were several areas that I found incredibly interest-ing, health being the key one. I was lucky enough to be selected for the role.
So, is O2 Health heading for a major transformation?The health sector itself is going through a transforma-tion to ensure that we’re able to manage the perfect storm that’s hitting us: growing demand, economic pressure, and the fact that clearly we need to be able to put the patient at the centre of what we’re doing. I have a great team with very strong health sector credentials. I also have an advisory board made up of GPs, senior consultants, and carers. We’re a balanced group of people and that is perfect for being able to help the health sector navigate this transformation.
Where is the biggest opportu-nity for O2 as an operator addressing the health sector? For us the connectivity and the services go hand-in-hand. Connectivity is vital to patients to be able to reach care providers wherever they are, and by collaborating with partners and various
trusts, we are also develop-ing and implementing end-to-end health solutions.
How developed is the UK e-health market?I believe this year and next year will see an explosion [of growth] in mobile health applications. We have around 15 million people in the UK with long-term chronic conditions, and in addition there are about 3 million people who have a need that would benefit from some sort of personal response service. If we add the ageing population and the economic pressure, then I believe there is a need for technology to be implemented that can enable people to manage their own care and also foster efficiencies within the health sector.
What is O2 Health’s involve-ment in driving demand for e-health from the patients?To date our priority has been to work closely with the
THIS YEAR AND NExT WIll SEE AN ExploSIoN IN MobIlE HEAlTH ApplICATIoNS
NHS, local authorities and care providers, and through those groups our services have been provided directly to the patient. In the first half of this year we will also launch our mobile telecare service directly to consum-ers, and we are going to support that with a large communications campaign. We’re also working with national patient groups to ensure that the experience we have on a global level is being added into the mix.
What about network availabil-ity? How does O2 manage liability if the patient cannot connect to the network?
Our network performance is an area that we take very seriously; every day we invest about £1.5 million in improving it. Last year’s network collaboration deal with Vodafone means our network will provide 98% indoor population coverage by 2015. Using [alert service] Help at Hand as an example, provided there is some O2 coverage, Help at Hand is able to send location and alarm notifications. Even if you can’t make a call it can still send a response as long as you have some coverage. If there’s no coverage, then our devices will keep trying until there is enough to send the alarm. Before they purchase
the service, we make sure customers are aware of the network coverage in the area where they are most likely to need it, and that they understand what the process is if there is no coverage.
There are two Help at Hand devices: the wristwatch and the pendant. How were they developed?They were developed by us in partnership with the manufacturer but also in partnership with care providers, and taking into account customer feedback. We’ve got over 100 people currently using the Help at Hand product and we have
run various workshops with a selection of those people to really drill down into the features that people need.
Who is footing the bill for these e-health services? What’s the business model? We are working with a whole section of interested parties, and they may or may not be the eventual bill payers. There are currently a lot of changes being implemented in the health sector that will change how budgets are managed and allocated. We are working with all areas of the health sector and if there is an instance where one area pays and another gets the benefit, then that’s
something for health professionals themselves to work out.
Are you working with estab-lished healthcare brands or is the plan to put the O2 Health brand front and centre? Where we can act on a standalone basis we will, but partnership is also a key element of our strategy.
What is the significance of O2 Health being a division within Telefonica Digital rather than the traditional telco business?We have a global e-health operation, which has been running extensive trials for quite some time in Spain and LatAm. We get the benefit in the UK of that know-how and we pass that onto our customers. The feedback we’ve had from some of our global customers who are a bit further ahead [in rolling out e-health services] has been incredibly helpful to trigger new opportunities.
What new capabilities, services and opportunities in the e-health sector will LTE unlock?With the improved speed, capacity and latency that 4G brings, it can provide a richness to e-health services. If it is the right thing to do, and I’m not necessarily saying it is, but if one doctor needed to send some very high-definition, high data volume documents to another doctor then 4G would certainly give them that capability.
oUR NETWoRK pERFoRMANCE IS AN AREA THAT WE TAKE VERY SERIoUSlY
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Mobile Order Management: Time is Money
TotalTelecom_Jan13_Advertorial_EricssonV8.indd 1 1/30/13 11:54 AM
CoNTINENTAl DRIFTNorth America leads the world when it comes to LTE connections, but things are also hotting up further south.
10lTE lAUNCHES (FDD
& TDD) IN lATIN AMERICA & THE
CARIbbEAN AS oF jANUARY 2013
(4G Americas)
lTE pRoVES... INNoVATIoN IN NETWoRKS IS THE FoUNDATIoN FoR INNoVATIoN ACRoSS THE INDUSTRY lowell Mcadam, cEo, verizon
TWo YEARS oN, HAlFWAY THEREVerizon Wireless marked the second anniversary of its LTE launch on 5 December 2012. In January it reportedly announced that 50% of its data traffic is carried over LTE and 23% of its subscribers use an LTE smartphone, up from 16% at end-Q3.
WoRlD DoMINATIoNThere were 22.3 million LTE connections in North America at the end of Q3 2012, up by 19 million over 12 months and accounting for 51% of the global total of 43.7 million, according to 4G Americas, using data supplied by Informa Telecoms & Media. As of December 2012, the region had 19 commercial LTE networks.
FooTbAll CRAZYBrazil’s mobile operators are working towards their April deadline to roll out LTE services in cities hosting Confederations Cup football, the precursor to the 2014 World Cup. America Movil’s Claro was the first to launch in four cities in January. LTE will prove a key battleground in Brazil’s closely-fought mobile market.
0.31%
24.92%
18.81%VIVo 29.08%TIM 26.87%
ClARo 24.92%oI 18.81%
oTHERS 0.31%
29.08%
26.87%Source: Anatel
bRAZIl MobIlE MARKET SHARES END-2012
17
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9 - 10 October 2013Grand Connaught Rooms, London
Understanding the business of telecoms
2 day conference
Book now to save up to £300!www.totaltele.com/financesummit
MobIlE WoRlD CoNGRESS25-28 Feb 2013Fira Gran Via, Barcelona, Spainwww.mobileworld congress.com
CARRIERS WoRlD ASIA 27-28 Mar 2013Dusit Thai Hotel, Bangkok, Thailandwww.terrapinn.com ASIA CoMMUNICATIoN AWARDS 20 June 2013The Conrad Centennial, Singaporewww.asiacomms awards.com
NETWoRK MANAGEMENT SHoW2-3 July 2013ETC Venues St Pauls, London, UKwww.totaltele.com/network
TElECoMS WoRlD MIDDlE EAST30 Sept-2 Oct 2013Jumeriah Beach Hotel, Dubaiwww.terrapinn.com
ToTAl TElECoM FINANCE SUMMIT 9-10 Oct 2013Grand Connaught Rms, London, UKwww.totaltele.com/ financesummit
