FOCUSED TECHNOLOGY CHOICES. Joachim Horn, Group CTIO
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1 FOCUSED TECHNOLOGY CHOICES Joachim Horn, Group CTIO
2 Key focus areas How we win Focused Technology Choices Value Champion Step-change Productivity Winning People & Culture Selectively push new & innovation where it matters for our customers Drive down costs continuously in all areas 2
3 Fix the basics: network and IT quality Total drop rate all countries Priority 1 incidents all countries Projects on time % Drop Rate (%) %
4 - where it matters for the customers Continue to fix the basics in design and operations Continuously increase quality where it matters for the customer Voice over LTE (VoLTE) and HD Voice Data experience in LTE Focus on customer perception Outside-in KPI s Tight collaboration with customer service CTIO customer complaints for technical reasons Cell availability whole network (Kazakhstan) 100% 90% Aug 2013 % Jan 2014 Aug 2014 Quality perception (Kazakhstan) 60% 30% 0% Target Aug 2013 Aug 2014 Aug 2014 Tele2 Activ Beeline Kcell 4
5 Customers want more data when moving to LTE Today LTE stands for ~70% of all data usage in Tele2 Sweden Total Data Usage 3G LTE Jan 2012 Oct
6 Dilemma: more data, higher quality, same cost How to deal with + exponential traffic growth + good quality for our customers + cost efficient transition to new 6
7 Drive down costs continuously in all areas Push for scale Invest in spectrum and backhaul Consolidation of data centers Focus on LTE LTE more cost efficient than 2G and 3G Cost/Mb 3G 4G Busy hour traffic volume per cell MByte Near/Offshoring Sharing sites and transmission Get rid of legacy fast CTIO resources Cells Kista Riga Total resource cost 100% 90% 0 80%
8 Good coverage becoming even more important for the end user 39% % 17% 10% 13% 38% 18% 13% 11% 20% 100 % 75% indoor coverage without U900 95% indoor coverage with U900 Customer care Network coverage Cost & billing Service & device portfolio Service quality Source: Nokia
9 Low frequencies and fiber backhaul ensure scalability and cost efficiency 5 Building a 800/900 MHz network is typically 5x more cost efficient** compared to 2.6 GHz 70 % more data capacity* 2.6 GHz 1.8 GHz 800/900 MHz Fiber required for speed and capacity at the lowest cost to scale Mbit/s , % fiber 2G 3G 4G 5G Owned, co-built, dark fiber or λ-lease will ensure scalability for future Microwave is acceptable alternative in rural areas 80% fiber 9 * Depending on radio plan, it is much easier to fully utilize capacity of 800/900 MHz compared to 2600 Mhz **Weighted coverage and capacity
10 Tele2 s frequency portfolio 2G 3G LTE 800 Mhz 900 Mhz 1800 Mhz 2100 Mhz 2600 Mhz Comment Sweden Estonia Latvia Joint Ventures with Telia 2100 MHz and Telenor 800/900/1800/2600 MHz Estonia also have 4.4 MHz in 450 MHz and 1*30 MHz in 2300 MHz (TDD) Lithuania Croatia Norway 5 20 Kazakhstan Netherlands G only 10
11 Selectively push new and innovation every 10 th year 2G Launched G Launched G Launched G Planned 2020 Current IT legacy structure 11
12 Selectively push new and innovation every 10 th year 4G is adopted faster than 3G 2G Launched G Launched G Launched G Planned 2020 Data usage 3G 4G Years from launch Current IT legacy structure Threat of Legacy Complexity Maintenance efforts Higher OPEX Reduced flexibility Low speed / time to market 12
13 Selectively push new and innovation every 10 th year 2G Launched G Launched G Launched G Planned 2020 Current IT legacy structure 4G is adopted faster than 3G Data usage 3G 4G Years from launch Threat of Legacy Complexity Maintenance efforts Higher OPEX Reduced flexibility Low speed / time to market How to cope Retire legacy fast IT Blueprint Focus on LTE All IP, virtualization, cloud Drive 5G definition SALES Tele2 IT Blue print Customer Touch points API:s Siebel REAL TIME CHARGING Singl.eview CRM BILLING ANALYTICS EDW 13
14 Superior user experience in LTE Speed higher in LTE than in 3G Latency lower in LTE than in 3G Throughput (Mbit/s) G LTE ms G LTE VoLTE quality higher in LTE Data completion success rate higher in LTE % Average MOS 4.1 VoLTE (23.85) 3.9 3G (12.65) 100% % 2G 3G LTE MOS Jan 2013 Oct
15 Customers at Tele2 spend more time on LTE
16 LTE is just at its beginning Many new features will easily bridge the time till 5G will be required VoLTE and Video over LTE Coordinated multipoint LTE roaming Mobility load balancing Carrier aggregation Further enhanced inter-cell interference coordination 5G Now
17 5G is not just a new radio access layer Holistic user/service centric approach and focus on E2E Massive traffic growth and high density demand Wide variety and variability of services consumed use cases Stringent demands for real-time communications NGMN Industry White Paper defining end-to-end requirements Accelerated evolution of 4G advanced and its ecosystem Standardization Development Trials/Testing 5G 17
18 Summary Selectively push new & innovation where it matters for our customers Drive down costs continuously in all areas 18
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