Ahead of Gigabit Access 2017 we caught up with keynote speaker Alexandre Fonseca, CTO of Protugal Telecom and Executive Manager at ALTICE Labs, on the progress of FTTH deployment in Portugal, the ALTICE Labs innovations that are driving the shift to gigabit networks and their Road to 5G programme.
Can you outline how Portugal Telecom are delivering enhanced access networks across Portugal?
The Altice Group is committed and focused on the deployment of fiber across the Group, which will also enable the development of the best solutions and services for our clients. In Portugal we are deploying two different levels of next-generation networks. The first is our 4G network, and what we call our 4.5G network which is paving the way towards 5G. We are also adapting our radio access network to deliver things like LTE Advanced or LTE Plus and, of course, increasing the coverage and performance of our 4G networks as we move towards 5G.
The second one, and the most relevant for the Gigabit Access conference, is our massive deployment of optical fibre. We announced in 2015 a 5-year plan to cover 5.3 million households in Portugal with optical fibre which requires huge investment and massive rollouts to hit these ambitious targets. In 2016, we deployed fibre to over 700,000 homes. For us, the deployment of optical fibre networks, is central to our strategy moving forwards and essential for delivering next-generation services.
How has the European Electronic Communications Code changed your strategic priorities?
It was more than the targets set out by the European Commission confirmed that what we were already doing the right thing. Portugal Telecom, and the Altice Group across all the geographies we operate in, decided to prioritise fibre roll-out prior to the European Electronic Communication Code. This is because we believe that the next generation services that operators need to deploy, like content, and IoT and M2M products, need fibre. So, in that sense it was not a significant driver for us in terms of our strategy because we already had a strategy to deploy optical fibre networks as part of our Road to 5G programme. In that sense, what we see is that we took a right decision, because for the targets that were defined by the digital dividend for 2020 or 2025 to be reachable, in our view, telcos need the same strategy that we have already adopted. So, for us, those targets were more like an acid test in the sense that they came to confirm the assessment and the assumptions that we took when we defined our strategy.
We are fully committed and we are sure that we are in a great position to reach the targets defined for 2020 or 2025 from the European Commission, both in terms of the fixed and mobile networks.
What are the biggest challenges that Portugal Telecom faces in delivering next generation access networks?
Well, the biggest challenge is always investment. The Altice Group’s commitment to rolling out fibre across all the geographies we operate in is a huge investment. Specifically, for Portugal Telecom, this is a very significant investment because of the size of the country, but nevertheless we are doing it voluntarily. So, I would say the first challenge is clearly the level of investment it takes to do the kind of roll out we are doing.
The second is time to market, or the speed that we need to deploy our fibre network. As I told you, we have a five-year plan to deploy over 3 million additional households to get to 5.3 million passed. To do that, we need to have an extremely optimised and efficient machine. When I say ‘machine’, I mean the ecosystem that we are putting in place to deliver FTTH in Portugal, from the labour force, from the technology, from the engineering and network planning perspective. All these perspectives together are a machine that today is fully operational in Portugal and we are now deploying fibre to over 80,000 homes per month. This is the second challenge, to have an effective machine that can deploy at speed.
The last challenge that we see is that we need to be also very innovative in the technology that we deploy. Fibre is clearly future-proof in our view, however we must still drive innovation across the company. That’s why we have adopted ALTICE Labs, which is our research and development lab here in Portugal that helps all the group deliver innovative products and services. The Labs have invested significantly in optical fibre research, and we have developed our own active equipment, as well as some passive components that help us in the rollout.
What are the biggest opportunities open to Portugal Telecom from building next generation access networks?
Clearly there are two different sets. One set of opportunities is linked to the performance and the throughput that optical fibre networks provide. Our ‘hyperfast broadband’ improves connectivity, offers much higher levels of performance and throughputs on the existing network, and delivers a much-improved quality of service. The network can cope with the huge amounts of traffic for services like video, and so on and so forth. So, one of the big opportunities is to be able to provide a quality service and a level of broadband that is in line with the expectations of our residential and corporate customers.
The second set of opportunities are the new services that are opened to us from our deployment of next generation networks, both fixed and mobile. We are now integrating ICT including cloud services, data centre services, cyber security services, because of the quality of our network. Also, the new Internet of Things, and machine-to-machine commercial solutions platforms that we are deploying are a huge new opportunity for us and the way forward for the industry.
We want to have full, convergent service and to be able to provide full, convergent services on fixed, mobile, content and ICT. Next generation networks are the drivers and catalysts that are allowing us to achieve this position.
What is the single most important change you have witnessed in telecoms since you joined the industry?
The biggest change, when I look backwards, has clearly been video – video adoption, video consumption, video quality, we already have 4K and are already working in 8K, and so on and so forth. Video as a service has had a decisive role in consumer patterns and behaviours and has been a game-changer the telecoms industry.
Today, we are looking towards a second game-changer which is the non-human consumption of services. The machine-to-machine and IoT services is having a huge impact on the industry because of the number of devices. There are significantly more non-human customers, or potential non-human customers, than human customers, because IoT will bring a massive growth in the number of connection points. This is something which is rising right now and, if you were to ask me the same question in two years from now, I would probably say that non-human consumption and non-human customers would be the number one game-changer.
What do you think will be the big telecoms trend in 2017?
In 2017 we will continue to see the evolution of exactly what I’ve just mentioned – the IoT and machine-to-machine services. This is an area where everybody is betting, and not just the telco operators. Other industries like the automotive industry, pharmaceuticals, health, and so on are all looking towards IoT and M2M, and partnering with telco operators.
Second cybersecurity and security as a whole, which nowadays unfortunately is something that we all need to be concerned about. Cyber security in the sense that companies and enterprises need to start being extremely concerned with their exposure to cyber risks. There is more and more cyber criminality and cybercrime is becoming one of the most significant impacts for doing business, for things like data protection, data privacy, and so on and so forth. So, security, and especially cyber security, is number two in terms of the big trends.
I would also highlight virtualisation because it is hugely important as telco operators are moving towards the IT space. IT is clearly also getting closer to the telco industry, and the two worlds that have been apart for the last decade, IT and telco, are now converging and understanding that they need each other. So, IP and IT going together, and the result of this merge between these two worlds, has virtualisation as a cornerstone. So, technologies like SDN and NFV are also a trend that we already saw a lot of in 2016, but will probably become bigger in 2017 in the telco space.
You can hear more from Alexandre at Gigabit Access 2017, being held in Brussels, Belgium on 4th and 5th April. To find out more about the conference visit the website
where operator access specialists can apply for a free guest pass.