Andorra is covered by 4G and we are not in a hurry to launch 5G in the Principality, says the CEO of Andorra Telecom, Jordi Nadal
CEO of Andorra Telecom, Jordi Nadal spoke to all-andorra.com about future of telecommunications trends in Andorra and the company’s strategic plans:
Andorra Telecom is 100% owned by the state. Are there any plans to privatise the company?
Andorra Telecom became a SAU on the 27th of November 2014. The Consell General, our parliament, unanimously approved the new law that upholds the public company’s historical status. All the parties voted recently that Andorra Telecom will continue as the public operator that has exclusivity over the telecommunications services in Andorra.
Andorra does not have a big enough market for more than one telecommunications company. For many small countries such as Monaco, San Marino and Gibraltar it is very hard to open the telecommunication market. Monaco has tried but nobody came into it. There is still only Monaco Telecom. Gibraltar has opened its market, and now they have a competitor only for international coverage. Citizens have not received any benefits, and the company lost many investments. Some foreign companies say: “We would love to operate in Andorra only for roaming”. But this is not what our customers look for. Now more than 30,000 residential houses in Andorra are well served by our services. If foreign companies are only interested in roaming services, who will take care of the Andorran customers?
The lack of competition in the market is harmful to the quality of services and business development. Do you agree?
Generically it’s good to have a choice, but there are some specific cases which depend a lot on the size of the market. When we buy infrastructure for mobile communication even the smallest one can provide service for 100,000 users. But we have 70,000 users here in Andorra. If there is a competitor, they would have to buy the same infrastructure, the smallest one. So we will double the capability of each for the same number of real users.
Therefore we are a natural monopoly. It makes no sense to have two, three or four different operators with so few consumers. There is no competition, this is a fact.
But what shall we do? What about the consumers’ rights? A special mechanism has to be implemented to keep the rights of the consumers safe. According to Andorran law, Andorra Telecom has to provide 100 Mb per second to any household at the same price and the government has to approve the tariffs for the residential market and to strengthen the consumer’s position. It is working on a draft regulator of telecommunications law to introduce in parliament. This regulator will be independent from the government and independent from the operator.
When will this regulator be set up?
It depends on the government and the parliament but we expect that it could be set up before the end of 2019. The government wants to provide customers with the best services whilst keeping investments too. This balance can be provided by this independent regulator.
Andorra has a population of about 70,000, but according to the Andorran Government, there are more than 8 million tourists. The most popular question we have now from potential tourists (our readers) – regard the prices for visitors. Why do you prefer local markets instead of the roaming business? Especially when the Andorran Government makes bets on the development of tourism business?
Roaming, communications services for tourists, is one of the main businesses Andorra Telecom is interested in. That’s why we have more than 200 international roaming agreements and special agreements with more than 74 operators from 38 different countries to ensure that retail prices are good enough to provide excellent customer service to customers in Andorra. Nevertheless, we mustn’t forget that the retail price that tourists pay is decided by their operators, not by us.
What is the company’s tariff policy? How do they compare to the tariffs in neighbouring Spain and France?
It depends on the service and depends on the country. The most competitive market in Europe is France: optical fiber as well as mobile services are very cheap because the policy of French companies is very aggressive and tariffs are decreasing very quickly.
In Spain the situation is different. I would not say that Spain is the most expensive market in Europe, but if you compare the average salary with the cost of telecommunication services, Spain would be in the middle of the competitors’ list.
So, what about Andorra? Who should we compare to? We try to follow the Spanish market that is close to us. Telecommunication services in Barcelona and Madrid are completely different to services in la Seu d’Urgell, 10 km from our border.
So, we try to make our tariff policy similar to Spanish cities located near to Andorra. I can say that our fiber prices are cheaper than in some Spanish districts, but more expensive than in big Spanish cities or in France. We cannot forget that from next year our network will allow you to connect from any point in our country at 300 Mbps.
Concerning the mobile services, we follow prices in Spain, but we cannot offer a low cost service. We must have very good customer service with an efficient call centre and commercial agency and we must ensure the maximum coverage of the mobile network in a mountainous country like Andorra – which all incur extra costs.
Could you give me some figures to compare the prices?
I’ll give you my personal example. I spend my holidays in a Spanish town with 14,000 inhabitants. Last summer optical fiber arrived and we started to pay 62 euros per month for 30Mb per second including mobile services. In Paris the price would be around 28 euros. In Andorra the price is much less: it’s 39 euro for 100 Mb per second plus 5 euros for mobile services.
Why there are no unlimited tariffs for internet and mobile phone communication now?
The case of Andorra is exceptional. 75% of the traffic is international and we have to pay for it to foreign operators. In big countries the traffic is mainly local. For example in Spain 70% of the traffic is national. A lot of traffic in Canada is to the US, so they started to charge. Otherwise Canadian operators would pay a lot of money. To avoid paying a lot it is necessary to have a limit on the international traffic.
Ten years ago we launched an optical fiber service without any limitations and some users used thousands of GB per month. Now we have an international volume limit, 95% of the users never exceed this limitation. 200GB per month is a comfortable limitation. 5% of the users reach this limit, and means that after that the speed decreases, but the service is never cut and if users need to maintain a fast speed they can buy additional GB.
Nevertheless, we are improving this international data limit each year, thanks to the international lines becoming cheaper.
Is Andorra Telecom ready to launch a 5G network? How wide is 4G coverage in Andorra now?
The coverage of our country started with 2G. Now we have 3G which covers all territories including forests.
4G provides our customers with the highest speed and it covers the populated areas. In terms of population, 92% is covered by 4G. But it’s not the same in terms of territory because of our complicated terrain.
What do you think, is it necessary to launch 5G in Andorra now?
The manufacturers – Ericsson, Alcatel, Siemens and others – are pressing the GSM Association to get 5G as soon as possible. A month ago the Mobile World Congress took place. The American and Asian market wish to start with 5G as soon as possible. European operators said that they had put a lot of money into 4G, so they are not in a hurry. So, half of the world will begin implementing 5G in 2018, and the other in 2020. Maybe the optimal decision is to find a “middle” and start with 5G in 2019. But this is only my opinion.
It is absolutely clear that 5G is not the same as 4G. 5G requires 8 times more antennas, this is a great investment and it has an important impact on business models. If an operator has to invest eight times more than what they had invested in the past, probably nobody would be able to pay for 5G.
The main three differences with 4G are the following. A much higher speed for mobile phones (300-400 Mbs per second with 3G/4G and up to 1000 Mbs per second – for 5G). But not everybody needs this speed, and not everybody is ready to pay for this service. Secondly – 5G allows hundreds of thousands of users to connect via antennas, but in Andorra there are not hundreds of thousands of users. I mean that most devices that can be supported by 4G are enough for Andorra. Thirdly – if you control something which is far away (a drone for example) with 4G, almost a second delay is possible. With 5G this number is reduced to almost zero. It allows devices to be controlled at a distance, online. Such services could have a lot of sense in big countries, but not in Andorra.
So, I am trying to say that for our residential market 5G is not necessary. We want to have state of the art technologies, but I don’t know how useful it could be in our country. Anyway we are not in a hurry.
Do you think Andorra as a touristic country has enough free wi-fi zones? Does the company plan to increase the number of free wi-fi zones?
All the main streets, ski stations of Grandvalira and Vallnord, and the majority of hotels as well as 94% of the shops in the main streets of Andorra are covered by free wi-fi. So even though this is not perfect, it is very good. If you go to a restaurant you need a password, in a shop you need another one, at a ski station a third, in a street you have to register and write your name etc.
This is not the best solution. I am sure we need to reach a “unicode” – the same wi-fi for every touristic place in Andorra.
In 2012 Andorra Telecom was updated with the help of technology Aurora Networks Trident7 PON Platform. By mid-2012, according to Net Index, Andorra had the highest rating in the world in terms of upload and download speeds. In 2014, according to the same indicator, Andorra was in 11th place. What is it’s position now?
When we launched FTTH in Andorra we moved users into optic fiber with 100Mbs per second. It was quite new technology in the global market. So we moved up in the rankings very fast. But lately other countries have done the same. Some of the countries even offered more than 100 Mbs per second. Net index was very useful for us, but it closed some years ago. So we are not able to find out our position.
As for other indexes, they are not available for small countries with a population of 77,000 habitants.
It is true that we lost our position. But some weeks ago we began updating our optical fiber and moved from 100 Mbs per second to 300 Mbs per second. So if we could be higher in the list, this index would be stabilized and optimized for us.
Who are the manufacturers of the main technological base of the company: the transmission equipment, satellite communication systems; public switching equipment including optical communication lines?
In our company, as the only telecom operator in the country, we have to invest in manufacturers that can provide us with high levels of confidence and stability. That’s why we select, through public tenders, who we think that are the best in price-quality ratio. At the moment we are using the Ericsson equipment for our mobile and IMS networks and we are updating our FTTH network with Huawei. For the supervision of all these networks and their services, we are using Astellia’s software and for the Business and Operation Support Systems we use Netcracker, a multinational company
How much does Andorra Telecom invest in its infrastructure annually? In what projects?
It’s 25 milions euro per year. 25% of our revenues move to investments, above the average for the sector worldwide which is around 15%.
What is Andorra Telecom now ready to offer to new technology startups if they decide to base themselves in Andorra?
We are flexible about providing any type of technology. If a technology does not exist in Andorra we are open to set it up. If there are any startups, we can help them to look for investors and we can provide them with a place to work. We are very accessible. If a startup needs a specific requirement we can help them from the telecommunication side.
We are members of the foundation ACTUA TECH whose role is to attract companies to develop business in Andorra. Once, an investor asked us to double our international connectivity. If someone needs 50 Gbs per second to connect with Germany, for example, we will do it.
Besides Andorra Telecom itself, which partners need to be involved? Services? Data centres? Venture capital funds? Incubators? Online universities? What else?
This is the reason why we have ACTUA. Andorra Telecom has created the NIU, an incubator to put all startups together. We made a network of investors, which we presented to the start-ups. So if a project is attractive enough it will find an investor and get the money. We also have a public cloud to support the business network. The country has a good supply of investors and the government is really open to help them.
What should be supported by the Andorran government in terms of telecom and technology infrastructure? Legal framework? Supporting services? Other?
We have enough money to invest. The government is the owner of Andorra Telecom. The interaction between the government and Andorra Telecom is natural.
Andorra Telecom bought a part of a Spanish telecom company. Please tell us more about it.
We bought 2.7% of Yoigo (owned by Másmóvil). This is the 4th mobile operator in Spain. We invested 10.5 million euros. We spent more than a year closing this deal. This operation enables us to create interesting synergies between the two companies.
You have started constructing “The Cloud” office building. What is the total area of the building? Will the office space be rented out? What is an approximate cost of renting it? How luxurious are the offices?
We are working to finish the content of The Cloud, an iconic building that will transform one important area in the centre of the country. We expect this building to be completed by 2019. The Cloud will hold the Andorran telecom offices, a technological park, a commercial zone, and restaurants or leisure facilities. Technology and Innovation are the underlying theme of the project.
The company’s marketing and sponsorship budget: what type of projects do you sponsor? How do you go about advertising?
We sponsor events related to innovation, technology and education. We support national projects like the Morabanc Basket team, who play in the best European league. We support Carmen Thyssen’s museum, and are proud to provide them with interactive screens. We also participate in events as a technological partner.
Does the company carry out its own know-how development? Does it sell it to other countries or companies?
The company has initiated diversification strategy of its business and has opened to the international market. One of the first steps has been the creation of a contact centre using our know-how. By the end of the year, 100 jobs will be created, a very important number for Andorra. We have the know-how to deploy the FTTH and we have been participating in some projects abroad. Our first policy deals mainly with the neighbouring countries, especially with the Spanish market, but we also have started negotiations with France.