Brendan Ives, TeliaSonera International Carrier: Bridging the east-west divide

25 March 2014 | Richard Irving

In his first major interview since taking the helm at TeliaSonera International Carrier, Brendan Ives sets out his plans for the Middle East and beyond. Richard Irving reports.

Brendan Ives knows his way around the Middle East better than most: before joining TeliaSonera International Carrier (TSIC) in 2001, he spent six months backpacking around the region, immersing himself in a rich diversity of cultures and learning first-hand how to break down the barriers that can slowly build up between businesses trying to bridge the east-west divide.

It may not feature on the itinerary of many travelling Kiwis – and especially not those leaving a promising career at Telecom New Zealand – but Ives’ offbeat roadtrip has certainly paid dividends.

Since stepping into the shoes of the recently promoted Erik Hallberg in January, TSIC’s new president has been working to close a flurry of deals with Middle Eastern partners, culminating with news of a tie-up with Ooredoo to establish a new Point of Presence (PoP) in Qatar. The arrangement will allow TSIC to offer a growing portfolio of customers in the region a full array of internet protocol, Ethernet, international voice and IPX-based services, and builds on similar deals with Omantel in Oman and datamena in Dubai.

In truth, TSIC has been in the Middle East for two decades or more: this latest spurt of expansion owes less to a changing of the guard than to an increasingly convincing business opportunity, though in his previous role as head of data and infrastructure (and before that, head of Middle Eastern sales), Ives will have been instrumental in putting investment in the region high on the agenda.

Establishing strategic hubs
Speaking in his first major interview since his appointment, Ives hints that further geographical expansion in the region – at least this year – is unlikely, but not impossible: “We always keep a watching brief and continue to explore whether it makes sense to go further afield, but at this stage, our plan for 2014 is to serve the Middle East from the three strategic hubs of Oman, Qatar and Dubai.”

That is partly because most wholesale customers, for one reason or another, will have a strong preference to connect out of one of the centres TeliaSonera has already chosen and partly because Ives would prefer to lease capacity back to any one of his new PoPs than invest in new network at a more local level.

In some corners of the TSIC empire, that ethos would jar somewhat: in Europe and the US, for example, the company prides itself on owning everything from the fibre ducts up. But the strategy has already proved its worth in Asia, where TSIC has centred operations around PoPs in Hong Kong and Singapore, and there is no reason to think it cannot work just as well elsewhere.

“Where we can own the network in its entirety, we will,” Ives says. “In the Middle East right now that’s just not possible, so we need to weigh up whether we go into a cable consortium, or whether we lease capacity from a local incumbent.”

Ives currently favours the latter option.

“Our strategy has always been to work with the biggest content players and operators and avoid competing with them at a domestic level,” he explains. “So unless these markets really open up, we will most likely continue leasing capacity back to our hubs from a local player.”

Moreover, there is a compelling competitive advantage in doing so: “As and when capacity rates fall, we can pass those savings on to customers very quickly.”

The strategy means that TSIC is also free to take additional capacity from rival network operators when new routes open up, injecting much-valued diversity into the network portfolio.

“Investing in consortia to date hasn’t made particularly good sense to us, but that doesn’t mean we won’t explore such an option in the future. On the contrary, it’s something we will probably look to do in the Middle East at some point,” Ives suggests.

Such is the projected growth in wholesale traffic volumes across the region, that TSIC sees a wealth of opportunity.

“We’re very careful when it comes to expansion,” reiterates Ives. “We always make a solid customer-driven business case before we embark on a new build-out and that takes time.”

But the Middle East, Ives stresses, is not so different from other regions in the world: “Clearly there are some obvious political challenges – and there is some Arabic content that is very regional – but ultimately, operators in the Middle East are looking to pull down content much like their peers elsewhere.”

The gaming and media markets are particularly strong, which plays to one of TSIC’s core strengths in connecting content to operators, and there is mounting interest in the enterprise segment.

“We’re going into the Middle East as a purely wholesale play, but we do support TeliaSonera’s enterprise division and through that unit, we see a strong and growing interest from big business for connectivity to the region,” he says.

Delivering results
If Ives sounds at ease in his new role, it is because he has experience in virtually every corner of the TSIC empire, from voice to pricing and mobile sales. He was the architect of TeliaSonera’s hugely successful voice trading platform – a model that has seen more than its fair share of imitators – and he has led the company’s aggressive expansion into the US. He has served on the executive board since 2006 and has retained a very keen interest in the Middle East since heading up the company’s sales effort in the region between 2008 and 2010.

He has also garnered an enviable reputation within TeliaSonera for driving profit growth in a wholesale market bedevilled by shrinking margins, tougher competition and the ever-present threat of disruptive technologies. In the last three months of 2013 alone, he helped deliver a 12.8% jump in net sales to 1.5 billion kr ($233.5 million), taking total net sales for the year to 5.5 billion kr ($856.2 million). Earnings before interest, tax, depreciation and amortization (EBITDA), meanwhile, edged a very creditable 2% higher during the year to 368 million kr ($57.3 million).

Little wonder, then, that Ives promises to focus on improving what TSIC already does well, rather than driving through a root-and-branch strategic overhaul.

On February 25, for example, the company took the first step towards global 4G roaming across its entire geographical footprint when it introduced 4G roaming for Swedish and Norwegian customers in Spain. The service will encompass more and more countries throughout the spring and will expand to allow TeliaSonera customers from other countries to take advantage of the offering as well. The move will put TSIC on a solid footing relative to key rivals such as Tata and BICS.

“It’s a big milestone for us”, admits Ives. “There has been a lot of development and a lot of tests. To get it into live deployment was important in showing the world what we can do and what we will be doing going forward.”

Ives also wants to sign up more network management deals along the lines of those that the company has inked with Facebook and Rostelecom.

“More and more companies are developing their own quite sizeable networks and are looking for help in managing them to their full potential,” he says. Ives plans to stop short of offering a full suite of managed services offerings, preferring instead to concentrate on network operations management.

Exploring new channels
One area where Ives is particularly keen to make his mark is within TSIC’s channel partner programme.

TeliaSonera’s wholesale unit has long made a conscious decision to avoid addressing the enterprise market directly, but the emergence of the cloud has clearly thrust the sector centre stage and the lines between the wholesale and enterprise segments have never been more blurred. A major push into the resell market will help Ives leverage a network that already enjoys a very high reputation in the industry for resilience and diversity.

The key, he says, will be to develop relationships with resell partners that can buy services from the company in much the same as existing operators and content providers. The inspiration comes from what has proved to be a very successful partnership with TeliaSonera’s business services unit, which specifically serves Nordic businesses.

“With our help the unit has been selling global WAN-type services,” he says. “Essentially we’ve been acting as an international procurement agency, offering global access to networks in far flung places.”

It led Ives to believe that the service could be packaged into a plug-and-play model that could be offered to companies all over the world. But the push needs some finessing.

“We have to approach this carefully – we don’t want to find ourselves in the situation of re-tooling our entire operation to meet the needs of new channel partners. We have always been and will always be a very focused wholesale business,” Ives explains.

Early informal experiences with resellers and systems integrators have proved encouraging: “We want to pick up on what has been a quite successful business for us and expand it into a wider programme,” Ives says.