Q&A: QoE and collaboration are essential for 5G success

Hong Kong cellco SmarTone has spent much of this year getting ready for 5G, even though commercial rollouts are still a few years away. Interestingly, part of its 5G prep includes educating customers that there’s far more to quality of experience than fast data speeds. SmarTone CTO Stephen Chau sat down with Disruptive.Asia editor John C Tanner to explain SmarTone’s QoE marketing strategy, as well as its 5G roadmap and why the 5G business case for cellcos ultimately requires cross-industry collaboration.

Disruptive.Asia: Your “5S” marketing campaign puts customer experience rather than raw data speeds at the center of your marketing message – why, and why now?

Stephen Chau: I think it’s too easy to just talk about numbers and equate data speed to quality, for example. That’s been ongoing in Hong Kong and some other markets for quite some time. But I don’t equate network speed with QoE. Speed isn’t the only parameter, but it’s the only one everyone talks about. But to me, the network is now a given. Once you’ve tried all the networks, then the difference isn’t that obvious – if you say, “Our network is better,” customers don’t see how, or why.

And when you look ahead, we will have all-data-centric platforms and we’ll have 5G with 10-Gbps connections – does it still make sense to talk about speed tests when your network is 10 Gbps and the competition is 8 Gbps? But that’s how consumers still think, so the question is: how do you correct that interpretation that speed is equal to QoE? I don’t have a magic solution to that – all we can do is educate the market, which is what we’re doing with “5S”. Our DNA is based on the customer experience – so why not focus on that instead? Why not tell them about what we’re doing to enhance the customer journey?

So how do you back that up? How do you measure QoE?

We tend to look at the typical use case and the actual performance of the network experienced by the customer at the application layer, and from there you can calculate how good and reliable your network is. We’ve been doing that for three years already. We’ve implemented an end-to-end network monitoring system that is a different platform from the network – it collects all that information down to the individual app level, so we can monitor continuously performance in different parts of the network at different times of day, and that gives us a lot of information on how to optimize the network. The next step will be AI, which everyone’s talking about now, so we’ll be using analytics to tune up the areas we need to tune up. The objective is to get a more real-time snapshot showing where we need to pay more attention and why. From the network perspective, if you have more video traffic vs browsing traffic, then you know where you should be optimizing your resources, versus a fixed allocation of resources.

Those tools will be the core engine to help us improve customer service experience as well. If someone calls the call center with a problem, those tools will automatically address his pain point and understand if the problem is the handset, the service, or something else. And not just the call center – everything on the backend should be synced up so that it doesn’t matter which touchpoint he or she approaches from, they should get the same level of service. With the younger generation, they don’t even want to talk to us – how can we deliver a good service experience when the customer prefers self-service? These are the kinds of things we’re looking at very closely.

How big a risk was it to change the message from data speeds to QoE?

It’s a big decision when you’re in a situation where the rest of the market is talking about network and you’re saying, “Hey, let’s talk about something else.” There’s a risk that your message might get lost, and you spend all this money but no one understands what you’re doing. It’s safer to focus on the easy thing.

Especially in a market as hypercompetitive as Hong Kong where people can and do change providers easily.

Right. And of course at industry conferences everyone will talk about customer experience as the most important thing, and in private you can focus on that, but when you talk in public, you suffer a dilemma – do we talk about that, or things people already understand? But if we as an industry keep talking about network speeds, I don’t know how much of a future we have. What you really want to talk about is value – and once you start talking about customer experience, it frees you to talk about the value you bring to your customers.

Moving on from “5S” to 5G – you’ve been busy this year with various trials with Ericsson. How’s that been going?

We completed a 5G trial in January, primarily to look at the propagation characteristics in an indoor environment. Since then we’ve been looking at the application layer – the use cases that we’ll need to support with 5G, or even before 5G arrives. From now until we roll out 5G, there will still be a lot of attention on the current 4G platform. For example, the network is now ready for NB-IoT. We’re trialing LAA and looking at ways to enhance network capacity and spectrum efficiency. But there’s a lot of work to be done before we actually roll out 5G.

To include figuring out the business case for 5G, I would imagine.

Right. 5G to us is a lot of uncertainty. On the other hand, if we create this environment, then potentially it will open up a lot of ideas that people today may not even think about. When you think back to the 2G stage, at that time I never would have imagined everyone carrying around smartphones everywhere they go, sitting in restaurants just looking down, you know. So we’re often rather short-sighted in terms of what we’ll do with the next generation, but historically we’ve found that when you have a good platform, people will find ways to use it. So things will happen, even if you don’t know when, exactly, or what the big ideas will be. So as a network guy all I can do is provide that environment to let everyone play together. I see 5G more as a collaboration than a straight B2B or B2C business model.

In what sense? 

Working with different industry centers and developing solutions tailored to different industry needs, whether it’s productivity or efficiency or workforce management – all kinds of things. It’s not just B2C where you’re offering basic connectivity to consumers.

Whoever comes up with them, what do you think are going to be the most likely use cases for 5G in Hong Kong initially?

It’s a difficult question. Everyone’s scratching their heads now trying to figure that out. The three drivers everyone talks about … first is enhanced mobile broadband, enriching the experience – 4K video, AR/VR, and so on. The second area is massive IoT, where businesses will be looking at ways to leverage IoT to improve their services, so a lot of that will be driven by those enterprises, not us. We’ll partner with them to help them develop it, because we certainly can’t do it ourselves. What do I know about the construction industry and their pain points with IoT? We can work together to figure out how we can address that together. And the last area is mission-critical low-latency stuff – that’s something the market needs to develop. Things like self-driving cars I think are probably ten years away, at least in Hong Kong, as a business case. I’d rather focus on ICT and make sure the mobile platform can scale enough to address these up and coming apps and content.

What’s your timeline for 5G?

We’re still looking at 2020 or 2021 for 5G. Obviously, our big brother in the north is much more aggressive. It’s good to have someone taking the aggressive role so they can help build up the ecosystem for service development. In Hong Kong, the scale is not big enough to drive the ecosystem. So we’re still monitoring 5G development, but in the meantime, as I said, we’ll be doing a lot of work on 4G. We can’t just wait around for 5G to be ready or new spectrum to be allocated.

Apart from spectrum, what other challenges are there in rolling out 5G in Hong Kong?

I think the government really needs to help the whole industry to prepare for 5G. Not just spectrum – when you build out small cells, for example, there are all kinds of issues with infrastructure, access permits. We’re not talking about rooftop sites – we’re taking about things like lamp posts, bus shelters, and so on. We can’t expect to be the only ones to say, “I want to stick a small cell on that post.” The regulator and the government need to help facilitate that. Right now, you have to go through a lot of different bureaus, and each one has its own authority. Just clearing it with one bureau is difficult – clearing it across many different ones is almost impossible.