2017 was an eventful year for Portugal Telecom's new CEO Alexande Fonseca. Fonseca began the year as CTO at Portugal's biggest operator, simultaneously juggling an ambitious optical fibre project, the revamping of the country's 3G and 4G networks and the launch LTE services – all whilst Altice was implementing a comprehensive restructuring of the company.
"One of the big challenges that we faced in 2017 was being able to deliver on these projects while simultaneously completing this restructuring programme," Fonseca told Total Telecom in an exclusive interview this week.
Unsurprisingly, Fonseca's efforts won him much admiration in the industry and in November 2011 he scooped the coveted CTO of the Year prize at the World Communications Awards in London. He was subsequently promoted to CEO of Portugal Telecom, and is now responsible for delivering on a host of ambitious projects in 2018 and beyond.
Following the World Communication Awards, Total Telecom caught up with Fonseca to reflect on the successes of 2017 and to look ahead to what is in store in 2018.
Investment in the future
The jewel in the crown of Portugal Telecom's achievements in 2017 was the commencement of an optical fibre project, aimed at delivering full fibre, gigabit capable broadband to 5.3 million homes in Portugal.
"We have a target that by 2020 we will have over 90% coverage of the Portuguese population with optical fibre. That is a big ambition of ours and we are ahead of schedule. We have already passed the 4 million household mark. We passed that milestone last October," said Fonseca.
Portugal presents a unique challenge to network operators in that it has a very high proportion of unoccupied properties – as many as 1 million holiday homes sit vacant for most of the year in Portugal.
"In Portugal, there are approximately 5.8 million homes. If we can reach the 5.3 million homes mark, this would represent 90% coverage, which would be outstanding by any European standard. You have to remember that Portugal has around 1 million homes that are uninhabited, either because they are second homes or holiday homes. When you take this into account, we will actually be covering 100% of the total population," explained Fonseca.
Fonseca believes that the completion of this project will propel Portugal to the very top of the European league tables for broadband connectivity.
"By 2020, if not before, we believe that Portugal will be in the top 3 European nations in terms of population coverage," he said.
2017 also saw Fonseca revamping the country's 3G and 4G infrastructure, to boost mobile coverage in Portugal, a project that will continue in 2018.
"Another key infrastructure investment that we made, which will be finalised in the first quarter of 2018, was the modernisation of all of the radio networks. This means that we wave touched 100% of our radio network. We have upgraded all of the hardware and software of the 2G, 3G and 4G networks that cover the entire country. Also we have incremented and grown our 4G coverage in the country, now reaching roughly 97% of the Portuguese population."
Finally in 2017, Portugal Telecom launched its 4G+ network, which delivers superfast LTE services to customers.
"Last November, when Lisbon hosted the Web Summit, we launched our 4G Plus network – 4G Advanced. As we speak, we already cover over 50% of the Portuguese population with this network, and this will grow to 70% over the course of 2018," explained Fonseca.
A new role brings new opportunities
While Fonseca has made a huge success of his time at Portugal Telecom, he admits that 2017 was a challenging year. As he realigns his focus following his promotion to CEO, Fonseca believes that there will be many opportunities to capitalise on in the near to mid-term. However, he believes that Portugal Telecom's position as the country's former incumbent operator brings an added layer of social responsibility to the role.
"It's been challenging – because it is not easy to make all these investments work. Making them on budget and within the desired timeframe for the shareholders is a real challenge. We cannot forget that Portugal Telecom, now Altice Portugal, is the former incumbent, which means that we have even greater responsibilities on a social and economic level," he explained.
"We have to do these things on time and on budget but we also have to have in mind our position as market leader, whilst keeping in mind the social responsibility that we have to the country," he added.
The company has undergone a major restructuring since it was acquired by Altice in 2015. For example, the firm no longer separates the roles of a CTO and CIO, but rather places one CTO in charge of both those areas. While this has undoubtedly streamlined the company at C-Level and boosted efficiency, it has also meant that staff have had to take on huge amounts of additional responsibilities.
"It has been challenging to manage all of this in what has been a transformational year. Altice took over Portugal Telecom in 2015, at which point we formulated a 2-year plan, which ended in December 2017. So, for some time in 2017 we were doing all of these rollout and upgrade projects while simultaneously completing our internal restructuring," he explained.
Looking ahead to 2018
With Altice's restructuring scheme complete, you could be forgiven for thinking that 2018 would be a time for letting the dust settle and taking stock of things for the company's newly appointed CEO. In fact, nothing could be further from the truth.
Top of Fonseca's to do list for 2018 is to ensure that the company remains on track with its optical fibre roll out.
"Despite the fact that we are currently ahead of schedule, we need to remain focussed to ensure that we deliver on our infrastructure projects," he said.
In addition to this, Fonseca will be sharpening the company's focus on additional value added services, especially online television services.
"The whole experience of watching TV is changing dramatically, especially with the rise of the OTT services. We are very aware of evolving our TV offerings, particularly by taking advantage of the OTT footprint, rather than seeing it as a threat.
"Looking ahead, one of the key areas of investment for us will be our TV service, and the evolution of the TV experience with the OTT involvement," he said.
Fonseca also believes that operators will need to devise strategies to monetise data in 2018, and he intends for Portugal Telecom to take the lead on this initiative.
"We need to look at ways of monetising the huge amount of data that a telecoms operator is able to gather. We need to take advantage of the huge potential presented to us, just by having this data. We want to use Artificial Intelligence (AI) as a way of turning data into knowledge, which can then add value into the business. So this will be a key area of investment for us, right the way across the spectrum from big data and analytics to AI. These will be important areas for us in 2018 and 2019 as well.
An award-winning year
Undoubtedly, 2017 will have been a year to remember for Alexandre Fonseca, following his meteoric rise but there is every chance that 2018 will be an even more eventful year. Reflecting on the past year and his win at the World Communication Awards, Fonseca remained magnanimous, and dedicated the award to the hard work of his entire team.
"It's an important recognition for all the hard work, not only for myself, but for the entire team," he said.
"I see it as a recognition but I also see it as an incentive for myself and also for my successor. We see it as a huge incentive to continue our work to modernise our operations in Portugal. Awards like these also help us to be more engaged with our peers across the market," he said.