CEO, Yota: “Nobody wants to count megabytes watching a movie”

Dennis Sverdlov is the CEO of Yota

Dennis Sverdlov is the CEO of Yota and is speaking on Day Two of the LTE World Summit 2012 taking place on the 23-24 May at the CCIB, Barcelona, Spain. Ahead of the show we speak to him about the challenges the Russian network operator has faced during its transition from WiMAX to LTE, on getting FDD and TD-LTE networks to interoperate and his view on unlimited data tariffs.

What are the main milestones you have reached with relation to your LTE deployment?

Yota was the first operator in Russia to showcase a fully built LTE network in Kazan, Russia with whole-city coverage in 2010. This year we started a first commercial LTE network in Novosibirsk, Russia. Currently we’re in the process of WiMAX to LTE transition in our five existing markets, including Moscow and Saint-Petersburg.  Yota is also rolling out Greenfield networks in three more cities in Russia. To date, we’ve built about 2000 LTE base stations across the country, including more than 1200 in Moscow.

We were also the first in Russia to successfully implement the LTE wholesale model, with partners such as MegaFon and Rostelecom due to start their commercial services using our radio infrastructure in April 2012. This deal required changes to both the mindset and processes of the big “traditional” operators.

What are the main challenges you have faced, or expect to face, as you roll out LTE?

The biggest challenge has been to go through regulatory approval of the new standard in Russia. The technology itself, given its “all-IP” nature, poses quite a challenge for the regulator, and approving this new standard required heavy changes to existing laws. Thankfully, we have seen very positive feedback and necessary changes has been made lightning-fast.

Another serious issue of a more technological nature was the preparation of WiMAX swap. We made a very deep TDD/FDD coexistence analysis and its results required us to develop a very sophisticated technical and commercial swap solution in order to minimise the threat to customer experience.

To what extent can LTE provide an insurance against declining revenue streams from voice and SMS?

Declining revenue streams from traditional services are not caused by customers’ evil intent, but are signals of underlying technological change. The reality is that communications are migrating to IP. In this sense, LTE, given its potential for high-quality real-time multimedia services, could secure revenue streams. However, we believe that traditional operator business models will have to change accordingly.

Is there a place moving forward for unlimited data tariffs? Are they sustainable?

We have always believed in maximum openness and honesty when it comes to customer experience. Our point of view is that complicated tariffs with unclear data caps hurt customers and harm their experience – after all, nobody wants to count megabytes while watching a movie. It’s exactly for that reason that Yota always offered unlimited volume tariffs, with a huge range of different maximum speeds.

The key to the sustainability of this business model is the approach. We think that the cost structure of any operator’s packet data is not in any way bound by the amount of megabytes sent, but rather is determined by the maximum speed capacity of the network. Therefore, changing the operator business models to revolve around “elementary speed units”, such as “megabit per second” helps to make the whole business sustainable. Of course, this requires very intelligent traffic and congestion management technologies, with clever and sophisticated policy control designs, but we are absolutely sure that such an approach benefits both the operator and the customer.

With so much attention paid to the radio access network is there enough focus on backhaul?

We see the transition from relatively slow backhaul technologies such as microwave into faster technologies such as fibre. However, we feel that this transition should happen at a much faster pace.

What’s your view on FDD vs TD-LTE spectrum?

Both technologies will co-exist, however TD-LTE will be used mainly across Asia and India.

Where do you stand on the issue of OTT players contributing to the costs of deploying networks?

Recently we started our own VoD service under the brand “Yota Play”. We strongly believe that OTT services will prosper in the era of fast mobile broadband, and it is our feeling that operators should create strategic partnerships with this kind of service provider.

Do you think that VoLTE will have an impact and if so in what time frame?

Yes, we believe that VoLTE with SRVCC is the future of voice services. However, further evolution of standards and equipment is certainly required for commercial deployment. We expect mass deployments to happen no earlier than 2014.

Is there enough innovation occurring in the mobile network industry? Can you provide some examples?

The recent development of 3GPP standards is certainly one of the many examples of mobile industry innovation. We also think that there are a lot of changes in the policy control area, leading to new innovative technological and commercial solutions.

What changes would you hope to see in the industry in the next five years?

In order to be faster adopters we think that the industry needs to streamline and simplify internal processes to be able to deliver new technologies to customers faster. They deserve that.

Why are you attending the LTE World Summit and what are you looking forward to most?

We feel that we have some important experience to share with respect to our (quite unique) deployment, and would like to get insights into recent industry developments – to understand the general outlook of operators, and the plans of vendors.

The LTE World Summit is taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your

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