Increasing the precision of network CAPEX
By offering unlimited data with a fixed price, DNA in Finland has overcome a key customer concern about how mobile data is charged. “If you start limiting what the customer could consume, you also lose visibility to what they want. I’m not keen to start educating consumers about how much a gigabyte is and what can be done with it”, explains Mikko Valtonen, Business Manager Voice & Data, DNA. Not only has the operator introduced unlimited data successfully but it has also accurately managed to predict future demand while operating its network efficiently.
There are several reasons behind DNA’s high CAPEX efficiency. Firstly, DNA’s 4G nationwide coverage was carefully planned keeping in mind both CAPEX and OPEX. The network was completely modernised and the legacy network replaced by bringing in multi-standard radio technology to allow DNA to integrate all technologies (2G, 3G, 4G) while rolling out 4G.
60-70% of the overall costs in DNA’s technical unit have been network related. By introducing multi-standard radios and more cost and energy-efficient technology, it could tenfold data capacity in the network without increasing network OPEX.
The basic investment to modernise the network has now been completed and from now on DNA will mainly introduce more capacity with the available spectrum it has in place, benefitting from the licenses it has acquired.
When offering unlimited data, it is important to ensure that customers are efficiently using the capacity. Investments have a long-lasting impact. What we see today is the consequence of the decisions DNA made already in 2010.
How could they foresee this level of demand six years back? When DNA introduced dual carrier (DC) in 3G in Hämeenlinna (a city of close to 70,000 inhabitants in southern Finland), it noticed that the doubled radio-capacity triggered a very quick uptake in traffic demand, leading to tripled traffic volumes in the city within just two months from the DC-upgrade. “When the food is good, the hunger for more is even greater. By investing first (and fast) into good coverage and by offering an excellent service to customer, the satisfaction was high from the very outset”, explains Tommy Olenius, Senior Vice President, Technology, DNA.
Often operators tend to make investments based on a “top down” approach. But DNA also applied a “bottom up” approach to future demand estimates, i.e. what are the services that customers are using most today and are likely to in future. “We need to think about what are the drivers to the growth. It will not be exponential growth but significant still. Our estimate is that in the next five years we will have a ten-fold growth in data traffic”, says Tommy.
DNA’s joint network operation (network sharing with Sonera) covers the North and Eastern part of the country (50% of Finland’s geography but just 15% of population). DNA’s customers can now take advantage of the coverage supplied by 50% more base stations in the area. Customer satisfaction has therefore also increased and market share is improving – moreover, DNA has significantly cut its OPEX in this area.
“The network there is really powerful now as there is plenty of capacity in this area”, highlights Mikko and continues, “Some of the investments have not yet fully paid off but in a couple of years’ time DNA can yet again say this is the result of decisions taken back in 2014.”
“Analytics is vital for DNA – it was an important part of our strategy and key decisions in 2010 – in those days it was very difficult for us to measure a single customer experience, per subscriber”, explains Tommy. While modernising the network, DNA also started a new way of managing the customer experience. The operator is today collecting a significant amount of data from the network – and can do comprehensive analytics on both network element and customer level.
Based on this knowledge of the customer, DNA can today make accurate forecasts on future demand. “We can see how the customer base is reacting and then measure the performance of our network overall and on cell level”, continues Tommy. DNA will continue doing its future investments following the same approach it started in 2010.
Using predictive network analytics and customer experience data, DNA can accurately decide where in the network – “the sweet spot” – it is best to invest. DNA’s investment strategy is today very much based on the understanding that by maintaining satisfaction high among the existing customers, it can also win over new customers.
Having a good coverage nationwide but also a sufficient cell grid in cities is beneficial for DNA when building data services. Tommy is concerned about the industry’s tendency to place too much focus on maximum throughput. He prefers to think about the right (sufficient) throughput for the customer depending on what they do and then to optimise the network based on what is truly needed.
If DNA hadn’t made the necessary investments back in 2010, the market share and the revenue would not be on the level they are today. DNA wants to be the best in customer satisfaction and in network planning. “A big part of how we implemented our network strategy is by focusing on customer satisfaction”, concludes Tommy.
Notes to readers:
At the end of 1999, the mobile operator “Suomen 2G” contracted Omnitele to design a completely new GSM network in Finland – the one that was soon to be known as DNA Finland. The partnership proved its value for DNA, and later on DNA continued to outsource also the design and optimisation work of 3G and 4G networks to Omnitele. Today, Omnitele is responsible for the design and optimization of DNA’s mobile radio network, and is being measured by the network service quality offered for the end-customer. Furthermore, a major part of the predictive analytics utilised by DNA in managing the quality and investments is provided by Omnitele.
This interview was conducted in co-operation between Tefficient, Omnitele and DNA.