continuously introduce new and better services to the market. As a result, our network now supports an increasing
number of diversified services – mobile, wireline and convergent. In 2009, we made important investments in our
network to answer the intensifying demand for bandwidth while delivering best-in-class quality levels.
2.9.1. Innovation and quality of service improvement
The investments we made in our services platforms, core, access and transport network enabled us to introduce an impressive number of additional services to our customers, while supporting the development of new convergent offers.
To offer the best mobile broadband service through Optimus Kanguru, it is fundamental to ensure the best possible 3G coverage. During 2009, Sonaecom substantially expanded its network’s coverage and capacity through an ambitious roll out plan. As a result, we had 90% of the population covered with UMTS and over 85% with HSDPA by the end 2009.
3G Coverage HSDPA Coverage
Leading once again in terms of innovation in the mobile broadband arena, Sonaecom was the first Portuguese operator to introduce HSPA+ (21 Mbps) to its live network and to offer a HSPA+ modem in its stores. HSPA+ significantly enhances the user experience, increasing the standard 7.2 Mbps offer to up to 21 Mbps. Following consumer trends, we also raised upstream capacity from 2 Mbps to up to 5.7 Mbps. This important enhancement gives users a better experience when uploading personal information or e-mails to the internet.
2.9 Our telecoms network (continued)
Our mobile 3G access network will soon support 42 Mbps downstream offers (Dual Carrier and MIMO Technology), preparing for the introduction of Long-Term Evolution (LTE). We expect LTE will enable us to further extend our mobile broadband capacity, allowing user rates up to 100 Mbps. This will clear the way for more sophisticated and demanding services while improving the user experience even further. Furthermore, we became the first mobile operator in Iberia, and
only the ninth operator worldwide, to introduce a Femtocell commercial offering to the market. Femtocells are an exciting new product that allow users to connect to the mobile operator’s network using their fixed broadband connection and standard 3G phones through a secure, low-power access point.
Sonaecom launched this offering when Optimus Negócios gave SME customers access to a convenient convergent package incorporating both fixed and mobile services. In its initial phase, the service is primarily designed to enhance coverage in indoor environments. But additional services are expected to be developed soon, taking full advantage of this new technology.
With the implementation of FTTH, Sonaecom is able to deliver end-to-end wireline services to the residential, SME and corporate segments, using the most advanced technology available. At the end of 2009, our FTTH coverage exceeded 200 thousand homes. Strengthening our TV offers, we introduced the RF-Overlay service to our FTTH network. With complementary analogue TV services, this service delivers more than 60 channels to every TV set in the home. This functionality allowed customers to benefit from multi-room viewing without the need to introduce additional set-top-boxes.
In 2009, we also completed the roll out of a new advanced IP-based national transport network, fully carrier Ethernet enabled. With this new and leading-edge infrastructure in place, we launched our Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) offers, bringing new, value-added carrier Ethernet services and IP Centrex services to our corporate customers. Capitalising on this new architecture, we are exploring the value in the ’cloud’ by offering new and convenient services that address the real needs of the corporate and SME segments more effectively.
Additionally, we continued to leverage our IMS investment by providing new services and functionalities to our existing IMS-based portfolio, offering click2dial functionalities to our TAG customers, and upgrading the functionality of our webphone PC service. Importantly, this service won international recognition during 2009 with a Communication Service Innovation award from GTB (Global Telecoms Business).
Aiming to sustain our leadership on the mobile broadband front, we have also upgraded our core network to support the launch and roll out of Kanguru unlimited, the unlimited traffic mobile broadband offer introduced during the year.
2.9 Our telecoms network (continued)
2.9.2 Network architecture and cost structure optimisation
During the year, we updated our 2G access network in the south of Portugal, replacing the legacy BSC platform, which has allowed a concentration of a number of BSCs. This initiative resulted in significant operational expenditure reductions in the costs associated with remote sites. For example: operation and maintenance, energy and site rentals. With this newly installed configuration, we will take advantage of high traffic capacity, reduced energy consumption and the option of enabling advanced GSM/GPRS functionalities. Additionally, our network can now easily support IP over the GSM/GPRS network, enabling an improved user experience and better quality combined with a convergent IP/3G approach.
In parallel, we also put in place a process for updating the 2G access network in the northern part of the country, including the complete swap of our legacy 2G network supplier. The effective implementation of this project will start at the beginning of 2010 and will enable the upgrading of all BTSs. This upgrade will allow for a material decrease in the cost of ownership, with significantly lower levels of energy consumption and considerable improvements in radio performance and capacity.
At the same time, our new access network will be ready to accommodate any future developments. For example: a migration to a full IP backhaul. Moreover, the base stations we plan to install will be multi-system platforms. In other words, they will be able to accommodate 2G/3G and LTE expansion easily, with significant CAPEX savings and synergies compared to the previous one station/one technology approach. And similar to what we implemented in the southern region, it will be possible to concentrate and reduce the number of BSCs, allowing important cost reductions and enabling access to new GSM/GPRS functionalities. Besides supporting a more effective operation, reducing operating and capital expenditure and significantly improving network performance, the modernisation of the 2G network will contribute to our efforts to cut our carbon footprint.
In our continuous effort to reduce mobile backhaul costs and anticipate the increasing mobile broadband bandwidth requirements, we continued to roll out connections to our mobile sites with fibre optics or microwave with Ethernet capability. In 2009, mobile sites in urban areas were connected with fibre network, which guarantees the required capacity and scalability. In response to the traffic growth in rural areas and to prepare the transport network for the evolution to LTE, we introduced Microwaves Ethernet. Following the success of this project, with the technology proving to be a more efficient transport for packet data traffic, we have adopted a massive roll out of this technology across new and existing sites.
As for our ADSL2+ network, in order to provide a uniform customer experience and service to our customers, all Tele2 customers were migrated to our platform during 2009. Implemented with minimum impact to our customers, this operation means we can now offer our complete service portfolio to all our wireline residential customers.
During 2009, we also carried out significant updates and upgrades to our packet core network to reinforce the cost reduction programme while expanding network capacity to cope with the significant demand resulting from the new offers and from the increasing bandwidth consumption per customer. We deployed a new generation of high-capacity nodes, which improved efficiency with a significant reduction in the cost per traffic unit. We also increased the intelligence levels of the core control nodes to allow the introduction of new and innovative offers to our wireless broadband customers.
To respond more effectively to demands from our commercial team, we implemented a new pre-paid network topology that allows greater flexibility and increased functionality. This project was concluded after two years of continuous collaboration with our network suppliers. We also leveraged our integrated core network to optimise its international connectivity architecture, adding new connections to London and Madrid, further raising the service levels offered to our customers.
As a result of this continuous investment, Sonaecom today owns a reference network architecture 100% based on international standards, allowing us to offer the best and most advanced services – mobile, fixed and convergent – to our residential and corporate customers.