CSO, Telecom Italia: “LTE can be the foundation for new business models”

Dr. Oscar Cicchetti is chief strategy officer for Telecom Italia. Ahead of the LTE World Summit 2012,  taking place on the 23-24 May 2012 CCIB, Barcelona, Spain, we speak to him about the telco’s use of spectrum,  the future of VoLTE, and where he sees innovation occurring in the industry.

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

Telecom Italia has already started a multi-frequency LTE deployment leveraging the spectrum resources acquired in the recent auction.

10Mhz in the 800MHz spectrum will be key to ensure good indoor performance and coverage of suburban and rural areas. This spectrum will be available from January 2013.

15Mhz at 2.6 GHz will provide peak throughput in the highly concentrated areas and will support micro and pico cells deployment to allow superior radio performance. Also, this frequency should be fully available from January 2013.

The already available spectrum at 1800MHz will have a crucial role. As a matter of fact, 1800 MHz is a promising trade off among coverage, peak throughput and capacity.

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

Telecom Italia was the first operator in Italy to launch LTE customer trials in Turin in February 2012 and thereafter in Rome and Milan. Currently, we are working hard to launch LTE commercial services on a national scale as soon as frequencies become available countrywide. The major cities will be properly served and end-to-end performance will be in line with the customer expectations. We plan on having 40 per cent of the Italian population properly covered by the end of 2014.

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

The declining revenue streams from Voice and SMS is a natural trend in the mobile industry. Handsets and tablets are not just phones. They are cameras, wallets, newspapers, books, video players and many other things. Voice and messages are just two of the infinite mobile apps and they are those with the highest price per byte. Traditional revenue decline is unavoidable.

LTE can be the foundation for new business models and for new revenue sources. MNOs should move from price per bit, to value per bit. The starting point will be high performance broadband access for end users.  but we should move towards differentiated QoS offerings to users, and through NetAPIs content and service providers will be able to develop premium content and services for consumers such as m-wallet, m-gaming, m-cloud as well as professional services for businesses such as corporate apps and collaboration tools.

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

All you can eat schemes should be carefully managed by the operators in order to maintain the sustainability of the mobile business. It’s a matter of the marketing mix: segmented offers, bundled with traditional as well as innovative services, such as premium content and apps.

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

Not in my view. Backhauling is key for mobile broadband and it’s a headache for the pure mobile operators. We’re familiar with it from our operations in Brazil. In Italy we have the largest fibre network that will be further extended with our NGN plan in the main 100 Italian cities. So we can deal with it.

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

We decided to bid for FDD in the Italian LTE auction because the coverage regulatory constraints were the same for FDD and TDD. FDD is a more mature and well known technology as far as network equipment and devices are concerned.

I believe that LTE-TDD ecosystem is getting more mature thanks to deployments in China, India, Japan, Middle East and some European countries. I don’t exclude Telecom Italia from being interested in TDD in some countries.”

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

There are many viewpoints on the contribution of over-the-top players to the telecommunications industry and it has been argued whether they represent a disruptive threat or an innovative opportunity. We believes both are true and consequently we are ready to compete and open to a cooperate in order to offer better quality and remunerate our services

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

VoLTE will really start from 2014/2015, We are working with other operators, GSMA, chipset manufacturers, software and hardware companies to transform VoLTE into an opportunity. The common goal is to build up enriched communication suites that integrates voice, messaging, images, video, applications, and context awareness.

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

There is innovation in the mobile networks even though the most disruptive changes and paradigm shifts are at the edge of the networks: terminals and clouds.  As far as networks are concerned I believe that standardisation continue to be crucial.  Just to give you an example, current network equipment are based on 3GPP Release 8 (completed in March 2009) but we’re working on release 11 and planning for Release 12.

Here the issue is that operators keep standardising a huge number of options partially implemented by vendors. Due to that, interoperability becomes more and more a key issue. Having said that, I believe that there are some very interesting innovation roadmaps for the network industry: Carrier Aggregation, Heterogeneous Network, Active Antenna System and Beam forming, CoMP and MIMO 4X4.

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

What I expect is that billions of objects will be connected and the Internet of Things will become a reality. HD video, virtual and augmented reality will invade our everyday life, networks will gather a huge amount of data about individuals, while communities, objects, places, contexts, and clouds will transform that data into information. What I hope, as an individual, is that all those changes will turn into a better quality of life for everybody. As a professional I hope and feel confident that carriers will be up to catch the related business opportunities.

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

The LTE World Summit represents the opportunity to have a worldwide overview of LTE key solutions currently in field and collect the experiences of operator that have already launched LTE services. This event is also an opportunity to share information about LTE ecosystem in terms of market perspectives, technological innovation, standard evolution and new services development.

Michele Palermo, vice president for Standards and Fora will be speaking for Telecom Italia on the subject of ‘Moving towards true 4G – LTE Advanced’, at the LTE World Summit, taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your interest.