Company Strategy

LTE SPECIAL REPORT 2014: Rolf Nafziger, Deutsche Telekom – Taking a lead in LTE wholesale

Having invested heavily in network roll-outs and acquiring spectrum, Deutsche Telekom sees itself as a pioneer in LTE. Capacity talks to the company’s Rolf Nafziger about the wholesale market’s role in supporting LTE’s rapid progress.

Deutsche Telekom (DT) named Rolf Nafziger as SVP international wholesale business unit in November 2013. Responsible for all international wholesale activities, he was previously in charge of DT’s EU marketing department and has also held senior management roles within DT’s fixed-line operation, as well as at T-Com and T-Mobile Germany.

Nafziger has seen his fair share of new technology introductions. In the past, telcos tended to overestimate demand, but with LTE the challenges lie elsewhere.

“Demand for mobile data is real and growing fast,” says Nafziger. “LTE is there to cover it, but monetisation strategies from some operators are still not as ambitious as the technical roll-out. Nevertheless, LTE is the fastest-developing mobile system technology in history. It offers high capacity, improved spectrum utilisation and a great user experience.”

Mainstream acceptance

This success, says Nafziger, can be linked to LTE’s acceptance as the mainstream technology for mobile broadband, along with the fact that it is the first truly global standard for mobile communication. However, there are variations in its deployment in Asia and North America, while penetration rates for LTE devices and subscriptions have lagged in Europe.

“Europe has been held back by over-regulation, while market fragmentation has also been a problem,” Nafziger adds. “There are 28 separate markets and more than 200 operators serving 510 million customers. That’s a very different picture to the US, where there are just four operators serving 300 million customers, bringing them significant scale benefits.”

DT’s International Wholesale Business Unit approaches the LTE market from two angles. Its International Carrier Sales & Solutions (ICSS) team, through its “Mobile World” branch, provides enablers for LTE roaming. Its flagship offering is the LTE Diameter Signalling service.

On the other hand, there is mobile wholesale. Despite suggestions LTE could see an emergence of wholesale-centric mobile providers and drive a decoupling of revenue and traffic as over-the-top (OTT) players gain share, Nafziger anticipates that the wholesale market for LTE will continue to mirror retail developments.

“Typically MVNOs do not focus on the technology, but rather on the services they purchase from their host operator. LTE is one of the elements to provide these services, so the technology as such is not the differentiator. Regarding OTT players, our communicated strategy here is clear: more innovation by co-operation. This means we are happy to partner, provided we can ensure a viable business.”

Meanwhile, DT’s IPX platform forms a key pillar of its LTE wholesale strategy.

“IPX adoption is growing because operators appreciate the combined advantages of one network providing universal access on the one hand, and security and QoS on the other. Mobile operators use it for universal access to all kinds of interconnections – data roaming (GRX or S8), signalling (Diameter or S6a) and voice interconnect.”

Nascent market

DT has been deploying LTE since 2010. This year, the company aims to have established commercial services in all EU markets, and has further upgraded its GRX capacities to allow the rise in LTE roaming traffic. It has also trialled LTE Advanced (LTE-A) in the Czech Republic and Austria.

“We believe that LTE wholesale is in a nascent stage, with regards to both roaming and the MVNO model. Mobile carriers everywhere are racing to launch LTE roaming and through our enablers we are well positioned to really help this market take off and gain a leading position,” he says.

DT’s ICSS can connect LTE roaming customers with over 800 mobile networks, but the key differentiator is its ability to hand off mobile data traffic to over 1.5 million hotspots for global Wifi roaming.

“A growing number of mobile operators are looking to benefit from direct privileged connectivity to T-Mobile networks,” Nafziger suggests. “Wifi and LTE are complementary, given that in-building coverage is not always perfect with LTE, but is a strength for Wifi. Furthermore, a high percentage of tablets and other devices are Wifi-only, so mobile operators want to cover these use cases by including Wifi at home and abroad within their portfolio. In the wholesale carriers’ world, we are the only company to support this.”

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