Revenue generation and effective monetization were central to many of the major debates and keynote presentations at Broadband World Forum this year. But Turk Telecom CEO Paul Doany opted for a different topic, focusing instead on creating a commercial business around fixed-line leasing.
Doany, who held the CEO role at Turk Telecom for five years before moving into the venture capital and investment arena for several years, returned to the Turkish service provider and the corner office in September 2016. He also continues his angel and investment activities, according to his LinkedIn profile.
On a Path to Broadband Penetration
Turkey should aim to reach at least 70% broadband penetration from today's 50%+, noted Turk Telecom CEO Paul Doany in an interview following his keynote at Broadband World Forum. (Photo: Amy Turner)
Following his well-received keynote, earlier today Doany sat down with Broadband World News contributor Amy Turner to expand upon how operators can redefine their commercial models, talk about the Turkish broadband market and his thoughts on the global broadband sector's evolution.
Following are edited excerpts from the interview:
Broadband World News: Today you delivered your keynote on the Broadband World Forum main stage and you focused on redefining the competitive broadband landscape: What do you hope were the main takeaways of this presentation?
Paul Doany: Other presenters were a lot more technical and they were covering where technology is going, primarily allocating bandwidth at the lowest possible cost. So I tried to really look at the commercial aspect of revenue generation -- what’s the most effective way for the operator, obviously having lowered the cost of providing the service, to monetize on that? I believe that with latency at the high-end, bandwidth is key, so people have to pay for bandwidth. If they don’t really need that much bandwidth give them less, give them more capacity at a low price, so you can maintain higher levels of usage.
BBWN: How would you describe today's broadband landscape in Turkey -- especially having left the CEO role at Turk Telecom for a while?
PD: When I returned to [Turk Telecom] in 2016, one of the things I did notice was that the penetration was much lower than I thought it should be. On mobile data, the data per mobile was higher than I thought -- it was close to 4 Gbytes per customer per month... the penetration on fixed was around 40% to 50%, and I said, 'We have to push that up to 70%.'
We designed a cheap Internet, which basically means that if you have an old copper line in your home that you aren't using for data -- because you now have your mobile voice and enough data in your mobile phone -- we will give you a low bandwidth but a very high 20 Gbytes per month additional to your mobile. That meant price-sensitive customers could afford to have fixed Internet in their home, and slowly, slowly, obviously I was hoping (and thankfully it did work), they would want more capacity and more bandwidth. Therefore, I need to have a low price [service] so I can sell more; therefore, I provide low bandwidth. For the high-end, of course, I designed a way for other operators to use our facilities. We designed a capex-contribution model for the fixed line service, so if someone wants to use the facility, they enter a 10-year lease, they give us the money, we own it, they have right of use. The rest of it they pay rental on. I think that also generated interest because it is a new model and we’re very excited about it. We now have one model working with Vodafone, and I've also done successful mobile sharing with Vodafone.
BBWN: How do you see the sector evolving in the next five years?
PD: Regarding broadband penetration, increasing penetration is very key. Going forward, let's say in the next three to five years, I think Turkey needs to go towards 70%, from the high 50% it is at now. That means doing what we're doing. With regards to bandwidth sales, I see more fiber and wireless data, which basically means intelligent 5G, because 5G will be very difficult to make work in anything other than in a spotty environment.
BBWN: What are the major challenges you predict in the next three to five years?
PD: I think the cost of 5G is going to be a key question for me -- the licensing cost and the coverage obligations. If you can provide, for example, slicing over LTE, and if a customer wants it, you can provide it almost anywhere, that will be a more cost-effective way to provide personal coverage, at least geographical coverage. For this reason, I am very cautious on this digital divide, because as you know the people who have the means to pay end up getting this unlimited bandwidth. The people who do not even have connectivity are falling way behind. That's the reason why it is very important for lower income people to have some bandwidth with a lot of capacity, and that's why it would be wasteful to provide what they would not use because they cannot afford it.
Do you agree with Turk Telecom's CEO on the provider's approach to the digital divide? Let us know in comments.
This year's Broadband World Forum concluded today. It's not too early, however, to start planning for next year when BBWF 2019 visits Amsterdam from Oct. 15-17. Find out more here.
— Amy Turner is Head of Digital Content, KNect365 TMT. Follow Broadband World Forum on Twitter @BBWorldForum and learn more about next year's event here: Broadband World Forum 2019.