98.5% 4G COVERAGE

Portugal 2019 | TELECOMS & IT | VIP INTERVIEW

TBY talks to Alexandre Fonseca, CEO of Altice, on investment in Portugal, 5G technology, and plans for 2019.

What have been the main highlights since you were appointed as the company's CEO one year ago?

Altice was known as PT before it was acquired in 2015. One of the most important things for us with the new team was to change the way we were communicating or being perceived in the market. We increased our levels of communication and recognition in the market also because we are leaders in almost all segments of the industry. That was one of the key challenges and I believe we tackled that already because the recognition levels and our communication showed tremendous improvements after nine months. On a more business level, we faced continuing and new challenges. Since 2015, the company invested heavily in infrastructures for fiber-optic deployment and mobile network enhancement, and it continues to invest in infrastructure development. The challenge was to keep up with the levels of investment. For example, over the first three fiscal years we invested EUR1.2 billion in Portugal, and out of those EUR400 million were investment in infrastructure for fiber optic. Our continuous investment resulted in a great achievement in 1H2018, when we managed to capture 60% of the growth in the entire fixed retail market. Moreover, in the TV segment we managed to grow from a loss of 12,000 customers in 2Q2017 to recovering those and adding 6,000 new customers. For the mobile segment, we also increased our customer base, growing 125% since the acquisition with 38,000 new customers.

The mobile sector is being led by MEO with 7.9 million out of 10.3 million mobile customers. What is your strategy?

Altice's key strategy is to maintain a high ratio of investment in infrastructures because overall growth cannot be achieved unless we invest heavily on infrastructure development. Altice Portugal is the number one investor with EUR1.2 billion invested over the last three fiscal years. It is due to our investments that our mobile network can cover 98.5% of the Portuguese population with 4G, a high number for European standards. Equally important, the same infrastructure enables 70% coverage for next generation 4G+ services. However, we want to be recognized not just for our investments in infrastructure but also for our high quality of service. To that end, we are enhancing customer experience and driving initiatives that allow people to have self-service and digital approaches to customer service interactions. In addition to that our initiatives are focused on providing the best content, applications, solutions for the B2B market; we aim to create a system that can be scaled for large enterprises and SMEs. Portugal's business segment is largely comprised of small companies, so we cannot simply replicate a service offered to a major Portuguese bank for a small accounting shop.

Altice is working with Huawei to make Portugal the European 5G leader. What can your customers expect from Altice in this regard?

We have divided the country into north and south, and we are working with Huawei in the south and Ericsson in the north. With both of them, we have established two individual programs, collectively named the Road to 5G. The project has a head start as the current infrastructure covers 70% of the Portuguese population with 4G+, paving the path for an easy transition to 5G. We are now experimenting technologies and CPE's with Huawei. Notably, we conducted the first live demo with live 5G equipment in 1H2018 and it was a huge success. The company is looking forward to the implementation of 5G on a national level. However, we are not as eager to implement 5G as regulators, governments, or technology manufacturers because we invested around EUR100 million in modernizing our mobile network in 2016 and we first need to capitalize on that. We see 5G as a natural evolution that will come along in time and do not expect to have live commercial services before 2022. It is important to note that 5G is not about having more capacity—4G is sufficient for present demands—5G will address a different set of challenges, such as density and the number of devices that can be connected within 1sqkm. I do not expect 5G to be massive for retail customers, it will be a good evolution for new sets of businesses that would incorporate the Internet of Things and Machine to Machine communication.

How do you see 2018 ending and what are your priorities for 2019?

2Q2018 results were in line with our expectations. We are getting back to growth in terms of operational KPIs, market shares, and customer base. The company has witnessed a reduction in the total turnover over the last two years, but this is normal. The Portuguese market has three main players and if not in 2018, Altice will also become the leader in the TV segment in 2019.