Max: 4G LTE to help speed up con­ver­gence of telco ser­vices

Top 100 See - - See Top Industries - By Borislava An­dreevska

What is the state of play on Bul­garia's mo­bile ser­vices market? Where do you see growth op­por­tu­ni­ties over the medium term?

Bul­garia is in a unique sit­u­a­tion. Peo­ple here are ad­dicted to their mo­bile phones more so than any­where else – they want to be up­load­ing, down­load­ing and up­siz­ing all the time which leads to the need for ex­cep­tional data

speeds.

We have to have in mind that data has changed a lot. A new sur­vey in the UK of un­der 15-year-olds showed that only 3.0% of them make voice calls. That's quite a de­par­ture from the busi­ness model of an ex­ist­ing mo­bile com­pany and where their rev­enues are. The trend in Europe now is to do a lot of net­work shar­ing for two rea­sons – for cost, ob­vi­ously, as you don't have so much cap­i­tal ex­pen­di­tures and you share the op­er­at­ing costs, but the im­pact on the en­vi­ron­ment is also an is­sue. That re­ally hasn't come here as yet and re­ally needs to hap­pen.

Also what was seen in Europe as mo­bile data speeds in­crease is that the de­pen­dence on fixed net­works de­creases. Why would you have a fixed line at home when you come

with your mo­bile and it has the same speed ca­pa­bil­ity? So that dy­namic is chang­ing as well.

How is the com­pet­i­tive land­scape in Bul­garia shap­ing the de­vel­op­ment of the mo­bile ser­vices market?

There is a con­ver­gence trend for tele­coms ser­vices that is global and breaks away from an in­fra­struc­ture sit­u­a­tion where peo­ple had the mo­bile phone for this and ADSL for that, and the TV for a third thing. Now what is go­ing to hap­pen is all these ser­vices will be bun­dled as peo­ple are ex­pect­ing to have the abil­ity to have TV, to have data, to have voice all at once and in one place through one device. They don't want to go to three dif­fer­ent providers or three dif­fer­ent plat­forms. And that's where 4G LTE comes into its own. You can only do that in a mo­bil­ity sit­u­a­tion if you have the right ca­pac­ity.

What is your view in the lo­cal up­take po­ten­tial for 4G LTE ser­vices?

In Bul­garia, you have the high­est fixed In­ter­net speed in the world. So, you've been spoiled in a way. It's the ex­pec­ta­tion of peo­ple. Up to now, the ex­pec­ta­tion has never been in a mo­bil­ity sense be­cause there's never been that tech­nol­ogy around to pro­vide it. 4G LTE tech­nol­ogy is de­signed for this cen­tury. It is de­signed for ap­pli­ca­tions. It is de­signed for the smart-phone. It is de­signed for the tablet. No other tech­nol­ogy was built for that. So, they've been built to­gether, mo­bil­ity from de­vices, high-speed mo­bil­ity from a net­work.

Why did Max de­cide to en­ter Bul­garia's 4G LTE seg­ment? What were the in­di­ca­tions that there is a busi­ness case for such a move?

Well, the ob­vi­ous one – no­body else is do­ing it and we'll be the first in the market. It is con­nected to market de­mand for this ser­vice and to the ex­pec­ta­tions of con­sumers. It's al­ready there but the ser­vice is not be­ing of­fered.

4G LTE tech­nol­ogy is ac­cepted ev­ery­where 318 net­works in the world run on it. I mean, it's not new, it's not a fad. It's here to stay. You go to Scan­di­navia, you can't even see 3G any­more, it's all 4G LTE. That's the way things are go­ing. The gen­er­a­tion that's grow­ing up, even here in Bul­garia, the tech­no­log­i­cal de­mands and ex­pec­ta­tions that they have are a lot higher and a lot more. The abil­ity to meet them is pro­vided only by 4G LTE.

Peo­ple are hun­gry for this new tech­nol­ogy for two rea­sons – a phone is a sta­tus sym­bol but what you can use it for now has de­vel­oped be­yond that. I per­son­ally use it for bank­ing, I use it for ev­ery­thing. I wouldn't need a com­puter to be hon­est if it wasn't for work­ing in the of­fice. Even emails I could do on my phone.

Could you pro­vide an up­date on the rollup of your 4G LTE ser­vice? What are your medium-term goals in terms of sub­scriber num­ber and cov­er­age?

In or­der for us to take a 4G LTE li­cence we have some en­try points we need to have. And those go-mark­ers, or go-lines, are 20% and 55%. So 20% was the ini­tial tar­get as part of be­com­ing op­er­a­tional and 55% is the tar-get at the end of five years. That's based on pop­u­la­tion numbers. At the mo­ment we are in Sofia, Ruse, Stara Zagora, Sliven, Ban­sko and Pleven which gives as about 23%, so the first hur­dle has been passed which is quite amaz­ing if you think we only started re­ally less than 12 months ago. Our plans for this year will be to ob­vi­ously com­plete the roll­outs in Varna and Bur­gas and con­tinue in Plov­div. We'll have about 50% of the ur­ban pop­u­la­tion by the end of this year. 4G LTE is a very ur­ban tech­nol­ogy. The peo­ple that want it are the peo­ple in the cities.

What com­pet­i­tive edge do you ex­pect to gain as an early-mover in the 4G LTE space?

No­body else has it. That's a pretty good ad­van­tage. In a way we were lucky be­cause we al­ready had the net­work with WiMax. It will be­come more dif­fi­cult as time goes on but that gave us a re­ally good start. The com­pe­ti­tion that we have at the mo­ment - the other hold­ers of a li­cense suit­able for the de­ploy­ment of a 4G LTE net­work, still have to build a net­work. I've build a few net­works in my life and it takes time. On top of that, I think at Max we know 4G LTE. We have a group of ded­i­cated peo­ple here, we have a very se­ri­ous man­age­ment team. We def­i­nitely punch above our weight for the numbers we have. And that fits in with ev­ery­thing else. So you have a good tech­nol­ogy, a good man­age­ment team, very clean, very trans­par­ent. We are just try­ing to bring a prod­uct to the market that peo­ple want with­out any hid­den agen­das, just a busi­ness.

Max tar­gets on-the-go ur­ban users with 4G LTE of­fer. 4G LTE will meet grow­ing tech­no­log­i­cal de­mands of the new gen­er­a­tion of con­sumers. 4G LTE fits needs of highly- com­pet­i­tive mo-bile ser­vices market like Bul­garia.

Peter Covell, CEO

Sofia-based op­er­a­tor Max, launched as a WiMax car­rier in 2007, com­mis­sioned the first Bul­gar­ian com­mer­cial 4G LTE mo­bile net­work in 2014. The com­pany, ac­quired in 2013 by Lon­don-based pri­vate eq­uity in­vestor Daniel Kupsin, plans to raise the cov­er­age of its 4G LTE ser­vice in terms of pop­u­la­tion to 55% in five years. The in­vest­ment tag for the five-year 4G LTE roll­out plan is seen at 75 mil-lion euro.

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