After building one of Europe’s fastest growing LTE networks, Fotis Karonis is now juggling EE’s merger with BT alongside its emerging 5G strategy. He talks to Graeme Neill about pressure, partners and pragmatism.
Time is tight when I sit down with Fotis Karonis about 100 yards from King’s Cross train station in London. The ebullient Greek is running straight from our interview to a technical team meeting some 100 kilometres away in Cambridge. The challenge is that we’ve plenty to cover; since Karonis was the winner of Mobile Europe’s CTO of the Year award in 2015, EE has merged with BT. His job has also changed from the succinct CTO moniker to the more unwieldy Managing Director, Mobile & Voice Converged Services.
What this means in practice is that Karonis has added the platforms, people and services that handle technology at BT into his more traditional mobile duties. It also includes fixed voice, a critical part of BT’s business given its role as the UK’s incumbent operator. A straightforward change, then? “No pressure,” he laughs. “I didn’t have enough pressure! But I’m really happy because I like the teams; it’s a nice culture… they are very frontline, very technical but also serving customers daily.”
We meet some weeks before EE announces plans to further integrate its products with those of BT, with the aim of creating a fully converged network by 2022. This continued customer focus is no surprise, given how it was central to EE’s success under former CEO Olaf Swantee. The ubiquitous presence of Footloose actor Kevin Bacon that underpinned its advertising helped the mobile operator put almost 20 million of its subscriber base onto 4G, in spite of the UK being one of the last European markets to launch LTE.
Karonis says the attitude is still the same, describing the operator as “pace setters and trend setters”, but he says what has changed dramatically since the BT takeover in 2016 is the need to upgrade capacity. He says: “The more people will use connectivity, the more they demand to do it anywhere, whether it’s video usage or whatever, at any point. We still have a lot of work to do.”
He says the basic means of tweaking spectrum management is a solution – EE has been shifting its 2G customers off 1800MHz and trying to use more of its 2.6GHz holding – but he says the operator, like any other, is under pressure to constantly evolve and strengthen its weak spots. When I ask what these weak spots are, Karonis waves towards the concourse outside King’s Cross station.
He says: “Because the patterns of people have evolved. It’s not like three or four years ago. People are on the move and use video. They want to do the same on the beach as at King’s Cross. [The question is] where do we invest? Where do we best invest? How do we have early warnings of patterns during the day, when people have dropped calls?
“To become what we call the 100 percent operator, there is still work to do and that is to reinforce the sites that have a massive amount of consumption all of a sudden. Between the hours of 4pm and 6pm, we have a step change in King’s Cross or [fellow London station] Victoria, to give examples. To understand this need and how quickly we can forecast this change so we can do things before it comes an issue.”
The problem with percentage points
This wish to meet changing customer demands also extends to the breadth of its network. The operator sits at 90 percent geographical coverage currently, no mean feat, but the hard work is still to come if it is to hit its 95 percent target by 2020. Karonis blows out his cheeks as he describes the process involved, using helicopters to lift and put down towers or using “tank-like” cars to reach the remotest of sites. “There are no roads so how do you get that landmass coverage if there is no way to access it? You have to build this access to put up the site,” he says. The operator describes the cost as “inordinately” expensive, noting that each percentage point of coverage makes their subsequent job even harder. On the plus side, Karonis notes: “Very good sheep and goats. Fantastic.”
Satellites are another option, as are the drones and balloons that caught the eye as connectivity solutions when they were first launched several years ago. But the latter, which have been used to connect punters at the annual Glastonbury music festival in rural England, are not seen as a long-term scale game. “It can be used if the mud hits the fan,” as Karonis puts it before describing them more seriously as “tools of extreme usage”.
It does beg the question of why do it at all if it is that difficult? Karonis puts an altruistic spin on it opening up what is likely to be a captive market to EE, arguing the economy of 2020 should not be held back by a lack of broadband. Returning to the challenges regarding the costs involved, he adds: “We can see the economics are not on our side. On the other hand, mobility is about 100 percent, we need to cover where people go. That is our vision of how we see the world and it does push our ecosystem to beyond boundaries. At the end of the day, things change. Postcodes that existed three years ago are much different today.”
Another reason is the operator’s involvement in the UK’s Emergency Services Network, which is set to replace the country’s legacy network by the end of next year. Concern is growing about the target date for launch, after delays in starting the migration of shifting services and, farcically, a government report into the problems of its implementation missing its own deadline. Karonis enthuses about the potential of the network, which also involves integration, support and devices provided by partners, but when asked about the delays and teething problems, he pointedly replies: “From our perspective we have delivered all of our milestones. Every single milestone.”
Assuming these problems are ironed out effectively, Karonis says the excitement of such a network is it delivers an early peek at one of 5G’s core features – network slicing. The emergency services network will effectively sit as a slice above the conventional LTE network with understandable priority over conventional traffic. He says the experience of the ESN will give the company a firmer grasp of what can and should be done ahead of 5G.
New tricks for old dogs
While 4G is far from dead – Karonis says there is a “massive amount of improvement capability” in LTE and that will be the foundation of what is to come – 3G is a different matter. He says that a challenge facing operators, including EE, is shifting its base off 3G in an “elegant” way. This is a problem that particularly affects its enterprise customers with legacy handsets and Karonis casts an envious glance at other sectors at how they handle these kinds of upgrades.
He says: “Our industry seems to be quite generous at times when compared to the IT industry. They just say ‘I am not supporting that anymore’ when it comes to new versions of [Windows] or Oracle…Whereas we seem to be supporting anybody, any car on any highway.”
He says this elegant way is to incentivise customers to make the leap, similar to what has happened in the United States. “We have a role to play here as operators and need to educate. Things are moving fast and we need to give the options to people about understanding the benefits of [switching to 4G] rather than say ‘it’s like that’.” The ultimate goal is to hold around 5MHz of 3Gspectrum from 2020 for M2M devices or UK visitors. The rest will be poured into the spectrum bank.
It will be put to good use and quickly. EE is seeing the immediate benefit of 5G as building capacity at sites that are close to be maxed out. Scale is key – operators are in the process of learning and establishing new business models as best they can with LTE and then applying them more broadly to next generation technology. Karonis says: “Scale is massive. Do we need that this year or next year? I think not but we have to build those capabilities.”
Nevertheless, the deadline according to Marc Allera, the CEO of BT’s Consumer division, which includes EE, is late next year. The initial focus will be on fixed/wireless access, delivering targeted capacity to those who need it. “It can provide a lot of coverage, quite impressively, in very [wide] city areas,” Karonis says. But he has the same pragmatic approach to other CTOs in noting that 5G is at least a decade-long play. He says: “There are cycles…When you build networks, it doesn’t come over two months. It takes time to build those capabilities, evolve core systems etc etc. These cycles are what we saw with 4G when we launched in 2012.”
His thinking dovetails with BT Group CEO Gavin Patterson, just one of an increasing number of C-suite executives starting to get antsy about the chatter surrounding 5G. He raised concerns last year about a lack of business cases in the short term and risks that a multitude of connected devices could open the door to.
Some have blamed the vendors for the market hype, with the big beasts in the industry keen to bring forward some much needed business. Karonis says both operators and vendors need to work together in a realistic manner. He adds: “We have to be pragmatic on what are the economics. On the other hand, what is the value; on the other, what is the investment required? It’s a balance and by working on that balance, your needs are becoming well understood by that vendor partner.”
He says through discussions vendors are starting to come around to the operators’ point of view, nothing that there is a learning curve for both parties. He says by operators putting more into engineering, they can be clearer on what they need from vendors, which in turn simplifies the process.
Transform and roll out
Where Karonis is more effusive is 5G’s potential to transform industries and the telecoms industry’s role within it. He says: “Connectivity is not a commodity, it is part of your lifestyle, critical for companies. So we need to ensure coverage, quality of our networks, strong focus on customer experience and resilience.”
He says EE’s role within 5G is connecting a variety of ecosystems as much as it can. APIs can help the likes of Amazon, Apple or Google plug into its network, he says, and leave the operator to concentrate on what it is good at, whether that’s LTE or 5G. He says: “You just say ‘alright, do we need to have everything in-house? Where do we differentiate?’
“Your core business becomes stronger and stronger because by having a great customer experience on your core product, which means you don’t have dropped calls, you are micromanaging your availability, you have proactive capacity management, you are very granular about where you put your money in, you are very relevant with these companies.”
No sign of an EE social network or smart speaker then. Is this a sign the operator knows it can’t do everything? “Yes, absolutely. And vice versa. The experiment of doing stuff and building an ecosystem is not the reality for us. The evolution of communication happens with the infrastructure and services and that opens a variety of applications for companies and industries.
“The important thing for a really good communications operator is to be blended in every industry and that’s where I see my role. I see mobile and communications at the heart of all industries; car manufacturers, manufacturing industries, the energy industry, aviation etc.”
He says the car industry is a case in point. The telecoms industry will play a key role but it is one part of a vehicle requiring artificial intelligence, software, energy efficient batteries and the like. He says: “I want to contribute to V2X, through 5G, lower latencies, higher capacity, predictive modelling. We can help using these technologies.”
He adds: “We want to make other industries much more effective, much more human centric, much more real-time, reliable and provide that added value. That’s why I’m very much an advocate of [mobile] not being a commodity. It is not just a price war, it is helping other people and other activities.”
In some cases then, operators can serve as the junior partner albeit a critical one that is lending its services and expertise rather than blithely assuming they can do everything. Karonis says: “We need to evolve our business model and provide that help, enabling other companies to perform better. That is a win-win situation, a complete partnership. We believe, as we always did, that our DNA was about creating an ecosystem partnership where we are great at what we do here, but at this point this is where you guys hook on. This collaboration is even greater for our customers.”
The long term is starry eyed but it is the present where EE has been uncharacteristically quiet about 5G. Anyone who has seen the image of Kevin Bacon dressed in a red PVC catsuit a la Britney Spears on an EE advert knows it is an operator that is happy not to do things on the quiet. However, 5G has been different with EE very much focused on LTE, publicly at least.
Karonis bristles slightly when I ask him if EE is being less noisy on 5G compared to what it was with LTE, and particularly in comparison to the likes of Deutsche Telekom or Vodafone’s litany of tests, trials, demos and firsts. He says: “No, no, no, I wouldn’t say that. We are absolutely working on design elements and are very close and motivated to be in the first tier.
“I am not sure about competitors; I see a lot of proofs of concept. But we are talking about the real stuff and there’s an element of how do we use 5G in a way that it provides values. It’s not to do a fireworks display. It’s how does this actually provide value. It’s a short term thing rather than a transformational element.”
He concludes: “We certainly want to be one of the first waves [but] we also don’t want to be the first to make any mistakes.” And with that, he’s gone. Trains and technical teams wait for no man.