Marc Zirka, Head of Corporate Strategy, Bakcell

Marc Zirka, Head of Corporate Strategy, Bakcell

Some of the discussions at LTE MENA 2015 will examine the challenges of deploying LTE in the emerging markets in the region. One of the key questions at the event will be what does it take to rollout a successful commercial LTE network?

To help us understand the challenges of LTE rollout, we caught up with keynote speaker Marc Zirka, Head of Corporate Strategy at Bakcell, ahead of their commercial LTE launch. He gave us a breakdown of the challenges they faced preparing to deploy their network and key insights into the strategy and thought process behind their decision to deploy LTE.

“Data Services are gaining traction and growing in our industry” he said.  “We at Bakcell wanted to take action and make sure that we are providing our subscribers with exciting and innovative technologies and capabilities.  Of course planning the launch of an LTE network does not come without challenges on several fronts; No matter how much you prepare there will always be complex situations to be resolved…

Why would you want to invest in a new network, when you have just launched a 3G network 3 years ago? 

This is what we asked ourselves when we started discussing LTE.  To overcome this first challenge, we had a series of discussions, conducted market research, and built several business cases.  We looked at the strategic rationale for going or not going for this kind of investment.  Being a dynamic operator and having one of our main competitors providing LTE services already, we couldn’t stay still.   The market conditions are favourable and we believe that the adoption rate will be in line with our expectations.”

“Being a dynamic operator… we couldn’t stay still”

Will LTE be a dumb pipe?

One main question that comes to anyone’s mind is why do we need to launch data services with speeds that are between 3 to 20 times faster (depending on the network quality) than 3G technology?   In my opinion, whoever launches LTE for simple internet access, without creating value, will be losing the game.  With time, this can only drive price erosion and could result very quickly in a negative ROI.  LTE investments are heavy and we need to find a balance to deliver the promise to our shareholders and to our customers at the same time.

Content is KING! Find the right content and you will win the LTE game. We should create value and provide a compelling value proposition for our customers.

Will LTE be for Small Screen (handsets) or Large Screen (Dongles/Tablets)?

You need define your LTE strategy and target market in the early stages. Are you targeting Small Screen or Large Screen users?  Why this is important?  It is necessary to forecast the traffic that will be generated on your network.  This will determine the level of investment needed for bandwidth availability.  Ideally, you would want to have a reasonable amount of traffic per subscriber, and for this you would hope to target Small Screen users.  However, since LTE handset prices did not yet reach the “commodity” price level, you can be sure that you won’t have a sizable critical mass adopting the service in the early stages.

Then you would argue that targeting Large Screen users (USB Dongles, Tablets) would be the right thing to do.  The price of the LTE dongle is much cheaper than a LTE handset for the time being.  But, we all know that dongles consume on average 4 to 5 times more than Small screen.  Therefore you will increase your investment requirements.  Moreover, when you go for the Large Screen segment, you will face additional competition, since you will be attacking the Fixed Line Broadband Market.

We had to face a major challenge in finding the right balance and the right value proposition between these 2 segments and to make sure that we keep our investment to a reasonable level.

One more level of complexity is added once you decide to go for Small Screen – Voice!  What do we do with voice?  We all know that LTE is mainly designed to be a data network.  However, when you target the Small Screen Users, you cannot ignore the Voice service anymore.  Of course several solutions are available, but we should not undermine their complexity.  Will it be VoLTE, or Circuit Switch Fall Back?  Both have their pros and cons and limitations.”

Join Marc and a series of C-level speakers from the region this May in Dubai

Join Marc and a series of C-level speakers from the region this May in Dubai

There is no doubt that LTE adoption is strong and it will grow faster in the future.  However, not all MNO’s who launched LTE witnessed the same success rates.  We can expect to have more subscribers connected to LTE networks over time due to the increased availability of LTE devices.  We all know that there is a pressure on OEM’s and ODM’s to produce cheaper LTE devices and components. This will come much quicker than expected and we even have started to see it in some markets.

Another major aspect to be considered is the network coverage. The more MNO’s expand their coverage and optimize their indoor penetration, the more subscribers they can expect to attract.  Unfortunately I cannot predict the exact numbers of subscribers and penetration rate percentages; this varies from one market to another. Several factors need to co-exist in order to have a successful LTE uptake rate; Devices, Network (Coverage/Quality), Value proposition, Market readiness and Awareness, Pricing, Marketing Communication.
Content provides the greatest opportunity for LTE growth and expansion! Exclusive Content! Why would a user need a bandwidth between 15Mbps and 120mbps?  What can’t a subscriber get today over a good 3G network?  Internet Browsing, watching YouTube, surfing social media, streaming movies, sending emails… all these are possible. So why LTE?

If you can provide exclusive content which cannot be found for free over the internet, then you will be able to catch the attention of your subscribers. Moreover, with the improved video quality which is available on the internet such as HD and Super HD, LTE will provide a better user experience than 3G.

I am not saying that MNO’s should become producers of exclusive content, but strategic partnerships and alliances will be formed.  By expanding our creativity, we can think about user generated content as one of the services that needs a strong LTE network.

By pushing the envelope, we can also think about specialized B2B services that can be delivered over LTE.  This is definitely much more difficult to achieve and will need lots of discussions with potential corporate partners.

LTE MENA 2015 will offer a great opportunity for us to meet our peers from the industry and gives us the possibility to get to know what is happening in LTE across the region.  During this event, we will be able to share our experiences, our success and failures, which I hope won’t be too many!

LTE MENA will also give us the possibility to meet with vendors who might be extremely important for us.

Informa has always delivered high quality conferences and events and I am sure that LTE MENA will exceed the expectations of the attendees.

Marc Zirka will be a keynote speaker at LTE MENA 2015 which will be taking place in Dubai on the 11th-13th of June. You can see the full speaker line-up and find out more about the LTE MENA event at www.lteconference.com/mena

Comments on: "LTE Deployments in Emerging Markets – Interview with Marc Zirka, Head of Corporate Strategy, Bakcell" (1)

  1. Very interesting perspective shared in this article, particularly on the content part. I completely agree that why would a customer want to go for LTE if good 3G network is available. Strategic alliances will have to be done and I believe its a win-win for the telecom operators and the content providers, especially in the countries where net neutrality is becoming a hot topic these days.

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