Kenneth Karlberg: The power of simplicity

Interview with Kenneth Karlberg

 

Kenneth, will you tell our readers a little about TeliaSonera? What is the company’s vision and mission?

Our mission focuses on simplicity, and we believe that simplicity makes everything possible. That’s where we start. We are present in a number of different markets, which creates some challenges for us, but we use the idea of simplicity to drive all of our decisions. We are well established in the Nordic and the Baltic markets. Here, we typically hold a leadership position, and in these markets, it is very much about developing new services beyond the edge of the market and technology development. Exploiting, for instance, the opportunities created by mobile broadband.

We are also building our presence in Eurasia, which is much more of a greenfield activity for us, where the focus is on “traditional growth” you could say – what we had in the Nordic/Baltic regions some years ago. And then we have Spain, where we also consider ourselves to be a greenfield operator and where growth is our primary objective.

So simplicity makes everything possible in all these regions: the Nordic/Baltics, Eurasia and Spain. We are organized according to three business areas: Mobility Services, Broadband Services, and Eurasia. This third one is a little bit different because it is a geographic description, rather than a business description, but the business in Eurasia is basically 100% mobile.

You mentioned that simplicity is a big part of your mission. Is that simplicity for end users, simplicity within your organization, or both?

Simplicity is valid for internal work, technologies, setup or anything, but the emphasis is of course on the customer interface.

You also mentioned mobile broadband. What broader trends such as the migration towards mobile broadband do you see in the coming years?

That’s an interesting question. First of all, we have to define our starting point because we have different positions in different markets. In the Swedish and Finnish markets, we are a major player in both fixed and mobile. And in the rest of markets, we are basically a mobile player with a smaller quantity of fixed and broadband services. One obvious trend is that traditional narrowband fixed telephony is slowly fading out. That is not a new trend – it has been going on for some years – but I would say that the speed of that is increasing.

With respect to broadband, I would say that all operators – not just TeliaSonera – try to use broadband connections for more than just internet access, combining broadband with TV and with voice. This is another interesting trend, in my opinion.

Simplicity is valid for internal work, technologies, setup or anything, but the emphasis is of course on the customer interface.

 

Then, you have another big trend which is that all customer accesses are going wireless. This is a strong trend both on the corporate side and consumer side – customers prefer wireless solutions.

Another trend is the increased demand for capacity behind the wall, if I can put it that way. Looking forward, seeing higher and higher speeds and larger and larger volumes in the wireless accesses, we realize there will also be a demand for larger and larger capacity levels in the fibers that are feeding those antennas.

I think these are the biggest trends on the higher level; of course we can dig down and see other interesting trends as well, but from a group perspective and from the top, these are the most interesting ones.

Building on the last point you made, about this ever-increasing appetite for wireless access, what technologies are you investing in to ensure TeliaSonera’s long-term success?

When it comes to fiber, it’s a matter of having a huge pipe. When it comes to customer accesses – the radio interfaces, the wireless interfaces –we are following what I call the GSM development path. GSM, GPRS, EDGE, UMTS, HSPA, WLAN, HSPA+, LTE, and we are combining that with our WiFi offering, HomeRun. We do not at present invest in mobile WiMAX. 

What technologies are you using to improve rural connectivity?

We have to differentiate between the different markets here. Rural access is a challenge in Sweden and Finland, where we have an obligation to provide access and connectivity to everyone. Over time, I believe the fixed way of providing access to customers in the rural areas will be replaced by some sort of radio technology. I don’t know exactly what this one might be today, and I’m talking about very rural parts where you might have one cottage in a very remote location.

Can you tell us a little about your main targets for mobile broadband?

One is the battle of mobile data, two is the battle of the home and office, and three is the battle of content and services. These are our main areas of focus for the mobility part of the business. Talking about ambitions and targets for mobile data, we see no reason why we should be weaker in market share on mobile data than we are on voice.

Can you compare and contrast consumers’ use of laptops and mobile devices?

When you look at the figures with respect to data usage, there is no device on the market that comes close to the iPhone, there’s no doubt about it. The main explanation, I believe, is its ease of use. Looking at the data, we can see that even existing customers who change from one mobile device to the iPhone, show a dramatic increase in usage. But then, of course, you have to realize the fact that the customers going for the iPhone are also interested in using it to access data. But anyway, when you compare the same customers switching devices, you get a clear picture, and it’s a huge difference.

However, hand-held devices don’t come close to the laptop. Even the most frequent iPhone usage is not even close to the average laptop usage. That is, of course, because of the fact that even if you download the same newspaper, you have a lower byte-need on an iPhone than when you do it on a PC. Not because the newspaper page is different, but because the device as such requires different amounts of information. When you talk about usage in the network – which is an increasing problem for an operator – then, of course, it is the laptop users who use most, not the iPhone users.

So, to a large extent, the increase in our subscriber base comes from mobile data and machine-to-machine services.

 

 

Which services have the greatest uptake from consumers and where do you see the main opportunities?

What is growing today is mobile data (specifically, SIM cards for accessing the internet), and we are talking very much about machine-to-machine communication, which is also growing. So, to a large extent, the increase in our subscriber base comes from mobile data and machine-to-machine services.

Interestingly, when we look at minutes of use, you often see a decreasing trend. But that does not mean the customers use our services less than before; it only means that we have more subscriptions that are not connected to the traditional voice network. The usage of networks is growing. Customers use mobile services more and more. Talking about specific services, the killer application for mobile industry, indeed the telecommunications industry in general, is mobility.

That’s the consumers’ point of view, as well. It doesn’t really matter to them how they access this information…

Clearly, this is the consumers’ point of view. Everything you did with your fixed access, you basically do with your mobile. But you supplement this with location-based services, navigation, using your mobile phone while you are commuting, stuck in traffic, getting more and more interested in the possibilities of mobile connectivity. Endless possibilities! That, of course, drives usage. I can’t really see a specific service in that sense – it is pure mobility which is driving this usage.

How is the current financial crisis affecting your business?

Like everyone else, we are concerned about the economic downturn. However, when it comes to evidence, we cannot see that it has had an effect on our business so far. When we look at pure figures, straightforward number-crunching, we cannot see any effect on usage.

Also, as companies seek to cut costs, their employees will travel less and communicate more often using video- or tele-conferencing. This will drive usage and revenue – provided these businesses stay operational. We are following the economic situation very closely, but so far we have not seen any real proof that the downturn is affecting our business.

Finally, will you tell us a little about your relationship with Nokia Siemens Networks? How do you work with them?

I would say that we have a very close relationship. We are very open and know each other quite well. As with any relationship, it goes up and it goes down, but that is part of life! I would describe our relationship as strong and good, going a long way back. We are very lucky to have the two biggest infrastructure suppliers here in the Nordic region. We work very closely with Nokia Siemens Networks and have a strong relationship with them. Is there anything more I would expect from our relationship? No.



Kenneth Karlberg

Kenneth Karlberg

Kenneth is President and Head of Business Area Mobility Services, TeliaSonera AB