Kirsi Valtari, VP Business Development & Head of Business, Elisa Corporation
There are two things you can be sure that Finnish people love— sauna and ice hockey. So when we in Elisa, the largest mobile network operator in Finland, rolled out our 5G network in April to broadcast ice hockey, I can assure you it was a success. The new mobile network generation has arrived. During Mobile World Congress in Barcelona in February, 2019 was announced to be the year of the new mobile generation. During the week, the first 5G phones and use cases such as gaming, robotics, and smart cities were demonstrated. But with these great use cases appearing, what are the 5G challenges that operators will face?
Although some use cases are in place, like ice hockey broadcasting, many operators are still struggling to find services that will drive their 5G business.
As a matter of fact, one challenge is to understand what additional value 5G adds to customers. So far, the most valid business case has extra been network capacity. But is it sufficient?
Another challenge with 5G is cost. Mobile network operators have spent billions rolling out 2G, 3G, 4G technologies. Can future network CAPEX be justified?
Thirdly, 5G will increase the quality expectations. While as low 2G, 3G or 4G network means late SMS’ or slow YouTube videos, a slowdown in the 5G network will likely lead to severe consequences for corporations, cities and individuals that rely upon a fast paced network for their applications. How do mobile operators avoid this?
Mobile operators that want to stay competitive for the next decades need to ensure their network assets and automate the network
Before answering these questions, you should know a couple of things about Elisa as an operator.
At Elisa, we have worked for many years to ensure a solid network and business model that we believe create value for both our customers and owners. In 2008, we did something new. Elisa became the world’s first operator to offer unlimited mobile data subscriptions. Many thought we were crazy. We were warned that the offering would lead to a congested network and that our business case would collapse due to the CAPEX requirements. These issues we managed to solve—so instead Elisa thrived in the Finnish market.
However, it wasn’t without challenges. Shortly after our flat rate offering was launched, we experienced steep growth in mobile data consumption. In addition, there were strict guidelines on our CAPEX and OPEX spending. The data growth did put pressure on our CTO, who had to make some tough choices on how to run the mobile network more efficiently. The answer was automation.
So in 2011, Elisa automated the traditional Network Operation Centre (NOC) and created a new Service Operation Centre (SOC). While the NOC had focused on our network and related technologies, our new SOC began focusing on our services and the customer experience. With the use of automation we began to reduce network faults by +15 percent year by year. Not only did we experience increased customer satisfaction, but we understood that a low quality network is expensive. Today, network automation is a key ingredient when we roll out our 5G network. Every day, it analyses millions of settings and changes tens of thousands of parameters.
Due to this, all Elisa mobile subscriptions now offer unlimited data. Our pricing model is based on speed. With 5G’s high network speed and low latency, this puts us in a great position for the future.
So when other operators ask me how we prepare for the 5G era I have three advices that I usually share.
1. Ensure the network assets. Mobile operators are dependent upon the frequencies handed out by local governments. An operator that falls behind with fewer frequencies will be in trouble when 5G business cases start to materialize. In addition, operators must ensure a strong backbone and core network that will support the 5G load.
2. With the network assets in place - Automate the network. Mobile operators need to move from manual to automated processes. 5G will bring additional work and make it more complex for the engineers. If not dealt with, this will reduce the quality of the existing network and increase cost. By automating 2G, 3G and 4G, the engineers will be able to move their focus onto 5G without having to worry about the quality deteriorating.
3. Start today. 5G is not only about the technology, but about building the competences in the organization. This means having the ecosystem and competences that can support the new offering. We see that 5G requires process changes, from rollout to assurance. Neglecting the 5G completely means falling behind once strong business cases start to materialize.
Winning in the 5G will be the toughest yet. It means bringing great use cases to an affordable price and with excellent service quality. Mobile operators that want to stay competitive for the next decades need to ensure their network assets and automate the network. Make sure your network capabilities are aligned with customer expectations. This way, I believe you will succeed in the 5G era.