Sponsored By

DT Completes All-IP Move in CroatiaDT Completes All-IP Move in Croatia

Investments should help the German incumbent to gain service agility and reduce spending in the long run.

Iain Morris

December 2, 2015

8 Min Read
DT Completes All-IP Move in Croatia

Deutsche Telekom has completed its migration off PSTN systems and on to all-IP networks in Croatia, bringing the number of countries in which it is now an all-IP operator to three.

The German incumbent had previously hit the all-IP milestone in Macedonia and Slovakia and is committed to shutting down all of its European PSTN networks by the end of 2018, making it arguably the region's most ambitious telco when it comes to all-IP transformation. (See Does BT Lag European Peers on All-IP?)

OperatorAll-IP deadlinesProgress to datePublicly stated goals/benefitsNotesBT2025All-IP core network already builtSimplifying estate; replacing legacy networks; saving costsOperator claims 21CN project achieved all-IP-to-exchanges target and that current initiative will take all-IP to premisesDeutsche Telekom2018Macedonia, Slovakia and Croatia are all-IPService agility; cost savings ( euro 1.2 billion ($1.3 billion) by 2020 from use of cloud-based technology)All-IP move is designed to support a major reduction in the number of service platforms Deutsche Telekom maintains across Europe, from about 650 before the process began to just 50 at its conclusion KPNN/A>60% of connectionsOptimization for very high data volumes; reduced complexity; faster time to market"To support our best-in-class access services, we continue to move towards an all-IP network," said KPN in 2014 annual report. "Moving towards a single IP core is needed to ensure best-in-class integrated services."Orange2020All broadband services in Mauritius are all-IPImproved user experience; better scalability, security and energy efficiency; enabling development of new servicesAll-IP pilot under way in Mauritius, which was chosen, says Orange, because of its "size, the representativeness of the different markets, such as residential, enterprise and mobile, and the presence of all services and technologies"Swisscom2017>25% of connections; >33% of customersEnabling cost-effective use of new services; offering services irrespective of type of access technologyHas migrated data transport network to IP, commissioned IP-based telephony and multimedia platform and been offering IP-based services since 2009Telecom ItaliaN/AN/AN/AMigration from PSTN to all-IP under wayTelefonicaN/AN/AN/AAll-IP forms a part of network transformation Telefonica is carrying outTelekom AustriaN/AAll fixed voice customers in Austria on all-IPTo overcome the problem of technology obsolescence related to the use of legacy networksHas revealed that another subsidiary will shortly make an announcement on all-IP conversionSource: Goldman Sachs, operators, Light Reading. Deutsche Telekom AG (NYSE: DT) believes it can realize savings of about €10 ($10.6) per customer per year from the move but has also positioned all-IP as a platform underpinning investments in virtualization and SDN -- which are sometimes described as New IP technologies. In the short term, however, the all-IP plan is forcing Deutsche Telekom to pump more funds into capital expenditure. The operator has previously indicated it will cost between €30 ($31.8) and €60 ($63.6) per customer to complete the all-IP migration. In Croatia, where Deutsche Telekom currently maintains about 1 million fixed lines, that implies a total cost of between €30 million ($31.8 million) and €60 million ($63.6 million). But it should allow the operator to save about €10 million ($10.6 million) a year in the long run. Deutsche Telekom claims to have spent about 400 million Croatian kuna ($55 million) on overhauling its Croatian systems over the last five years, which tallies with earlier estimates. Its all-IP transformation has included the replacement of 72 old local exchanges throughout Croatia with just two state-of-the-art facilities -- one in the capital city of Zagreb and the other in the major seaport of Rijeka. However, Deutsche Telekom also said it expects to continue making investments in this area in the future to improve its service capability. "Such investments allow us to offer innovative products and the fastest top-quality services on the Croatian market," said Davor Tomašković, the CEO of T-Hrvatski Telekom (HT), Deutsche Telekom's Croatian subsidiary, in a statement. "In 2015, HT is to invest more than thirteen hundred million kuna [$180 million], which is 25% more compared to 2014." In euro terms, HT spent about €123 million ($130 million) on capital expenditure last year. It has invested €109 million ($115 million) over the first nine months of this year. Much of the investment in the future is likely to go into NFV and SDN technologies as part of Deutsche Telekom's TeraStream initiative, the name the operator has given to its next-generation network project. For more NFV-related coverage and insights, check out our dedicated NFV content channel here on Light Reading. TeraStream has already been piloted in Croatia and Greece and is aimed at allowing Deutsche Telekom to launch services with web-like agility and to improve overall efficiency. The operator's ultimate vision is a pan-European network that will include a small number of production facilities serving multiple markets, instead of one "factory" for each country. As a result of this current complexity, Deutsche Telekom now maintains about 50 platforms for each country in which it operates, or 650 in total (excluding T-Mobile US), according to a spokesperson for the company. "In the future, there will be just 50 -- including TV, messaging, voice and so on -- to offer across the footprint, instead of 650," he says. "So with more and more countries switched to IP, we are able to expand these new services step by step."Country/regionTotal fixed lines in September ('000)IP fixed lines in September ('000)Percentage all-IP (September)Status/target for completionMacedoniaN/AN/A100%CompletedSlovakia858858100%CompletedCroatia1,0201,001100%CompletedMontenegroN/AN/AN/A2015Hungary1,6141,17873%2016Romania2,11736217%2018Greece2,577361%2018Europe8,7353,94445%2018Germany20,3546,35431%2018Note: Europe covers all of Deutsche Telekom's European subsidiaries bar Germany. Outside its domestic market, the operator has a fixed and/or mobile presence in Albania, Austria, Croatia, the Czech Republic, Germany, Greece, Macedonia, Montenegro, the Netherlands, Poland, Romania, Slovakia and the UK, through its EE joint venture with Orange. Source: Deutsche Telekom. Deutsche Telekom began trialing this approach in March this year, offering the same IP-based TV and VPN services across the markets of Croatia, Hungary and Slovakia. (See Deutsche Telekom Turns On Pan-European IP.)The TV service includes a data analytics feature that allows Deutsche Telekom to make recommendations to customers based on their usage profiles, while the VPN is aimed at reducing time to market for business customers. During the SDN & Openflow World Congress in October, Axel Clauberg, Deutsche Telekom's vice president of aggregation, transport, IP and fixed access, said the operator was planning on extending the pilot to a "broader footprint." He told Light Reading that feedback from customers had been very positive. (See DT, Vodafone to Launch SDN-Based VPNs.) Deutsche Telekom has also been offering New IP-like services in the all-IP market of Macedonia, allowing customers to subscribe to a broadband service on tap without having technicians visit their premises. In Croatia, meanwhile, it has developed an IP-based offer that it calls HP Business Connect, which it says allows customers to use a landline on a mobile device. According to Hrvatski Telekom, call set-up speeds and quality are dramatically better across what it calls "post-migration services." "It is much easier to connect customers -- changes to be made after a relocation, for instance, can be done in no time," says Deutsche Telekom's spokesperson in describing some of the broader benefits of the all-IP migration. "So the technical relationship between customer and provider is less complex."— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

Read more about:


About the Author(s)

Iain Morris

International Editor

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like