Wednesday, 21 February 2018

Smart initiatives make sense for emerging economies

By Chris Kelly, Total Telecom
Friday 02 February 18

Moldova is among Europe's poorest nations, yet the country's telecoms sector is developing at a phenomenal rate and is fast catching up with its counterparts in Western Europe

When you think of innovation and modernisation in Europe's telecoms sector, Moldova probably isn't the first country that springs to mind. Sandwiched between Romania and Ukraine, Moldova is one of Eastern Europe's former Soviet states. It is a country of surprises. For instance, you probably didn't know that Moldova has a thriving wine industry producing some excellent pinot noirs and cabernet sauvignons, as well as a spattering of crisp sparkling whites (perhaps this is what enticed French operator Orange to set up shop in the country in the first place). Last week I met with Orange's general director for Moldova, Julien Ducarroz, to discuss the state of the country's telecoms infrastructure. As it turns out, Moldova's foray into the world of viticulture is by no means the most surprising thing about the country. Moldova is home to a thriving smart city initiative in the city of Hincesti…

When you think of innovation and modernisation in Europe's telecoms sector, Moldova probably isn't the first country that springs to mind. Sandwiched between Romania and Ukraine, Moldova is one of Eastern Europe's former Soviet states.

It is a country of surprises. For instance, you probably didn't know that Moldova has a thriving wine industry producing some excellent pinot noirs and cabernet sauvignons, as well as a spattering of crisp sparkling whites (perhaps this is what enticed French operator Orange to set up shop in the country in the first place).

Last week I met with Orange's general director for Moldova, Julien Ducarroz, to discuss the state of the country's telecoms infrastructure. As it turns out, Moldova's foray into the world of viticulture is by no means the most surprising thing about the country. Moldova is home to a thriving smart city initiative in the city of Hincesti, is well advanced in its preparations to rollout smart metering to its utility providers and boasts an incredibly high smartphone take up rate (especially when you consider that the average salary in the country is only $206 per month). Not only that, Orange boasts a whopping 97% 4G coverage throughout the country (take note, the UK [71.34%], France [62.51%] and the rest of Western Europe).

 

Making a mark in Moldova

"Orange has a huge responsibility to Moldova, as it accounts for so much of the GDP [a staggering 2.8%]. Obviously, that means that we have a very significant role to play in the economy," said Ducarroz.

"That's why we place such importance on our corporate and social responsibility programmes.  It's really paying off in terms of developing the country towards becoming a more digital economy. This in turn will benefit us, indirectly. It's a virtuous collaboration between ourselves and the Moldovan authorities.

"Digitisation provides a huge opportunity for economies that are currently lagging behind the bigger economies of Western Europe. Figuratively speaking, it is like the opportunity to go from black and white to colour television in just a few months. I spend a lot of time advocating with the national and educational authorities, to adopt this concept and to help with arranging financing for digitalisation.

"We were the first country to launch a mobile digital signature – a technology that allows you to be legally recognised using just your mobile phone. So now you can pay your taxes and sign your tax declaration using only your digital signature. This is a big thing and it was premiered in Moldova.  

"We are forced to step into new markets because already in the mobile sector we have a very large market share. To be able to continue to invest, we need to step into a new vertical. We see convergence as a key way to develop. The story of convergence across Europe is the story of loyalty and of churn reduction. It's not simply a case of stepping into another vertical, it means understanding the customers need to have one package for all their communications needs."

 

Creating smart cities from scratch

"We are currently doing a trial of a smart city initiative in Hincesti, Moldova. This is really focussed on energy efficiency for lighting. The smart bulbs increase energy efficiency as you are able to remotely control when they are turned on. That means you don't overspend and you simultaneously provide a better service for the citizen. What normally happens with a standard bulb is that you end up turning it on or off either too early or too late, which can cause problems for your citizens.

"I must confess that here in Moldova this can be quite a long process. Public officials tend to have their budget for the year and can't really commit to funding beyond that. To unblock that investment is tricky. They can't make a 5-year commitment, for example, due to politics and compliance. So, we are working with institutions like the European Bank for Reconstruction and Development, to secure finance for these initiatives. This usually fits quite well with their financing programmes, because they are looking to work with these types of projects."

 

Smart metring brings tangible gains

"We have an ongoing partnership with one of the main water providers in Moldova. What is interesting here, and perhaps it is a little bit unusual, the main business driver that will unlock the business case for smart metering [in Moldova] is that they will be able to prevent theft and waste. There are a lot of "leaks" shall we say, especially when you are talking about large buildings. You can often find that lots of different houses will be connected to the same pipe in a number of very innovative ways. People have had to be very resourceful over the years! One of the defining characteristics of the country is that most people would be able to fix their car with just a few household items. It is very much a "fix it yourself" type of attitude.

"So, it's interesting when you look at the idea of smart metring and smart cities through this lens. We are convinced of the utility of these projects, and it's much easier to get that buy in from companies when you can show them how it will save them money.

"To be honest, I think that the smart metring initiative will take off quicker than the smart city one in Moldova, for this reason. The smart city is still viewed as a bit of a luxury in Moldova. People are inclined to say "before I sync my lighting with my mobile phone, I would like to have a properly paved road".  SO, in Moldova the smart city might take a little while to get going, but I think the smart metring will take off very quickly."

 

4G – 97% coverage

"We have been able to provide 97% of the population with access to a 4G signal. The geography of the situation is quite clement to the operator – we don't have huge mountains or deep valleys to contend with. The country is shaped like a banana, so this helps us to cover a wide area with not so many antennae. We also have very good frequency, so yes – it's quite an impressive feat.

"There is quite high adoption of smartphone technology among the population, particularly when you consider the low average salary. People still choose to spend their money on a nice phone. People like technology. They are starting from a little way behind [Western Europe] but they are catching up very, very quickly. You are talking about a generation of people who made their first ever telephone call on a mobile phone. Fixed line penetration only reached 35% [in neighbouring Romania]. So, people have gone from having no phone to having a smart phone very quickly.

"The cost of entry into these markets is very low – and when these technologies bring such a clear advantage, whether that is in terms of money or time, it is adopted very quickly. It spreads like wild fire."

 

Friday review - 02/02/2018

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