IO FM The Architects: Johannes Opitz from Deutsche Telekom
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The Podcast Transcript
This is an edited version of the IO FM The Architects: Johannes Opitz from Deutsche Telekom, Chair of the M2M Roaming Lab.
I think everybody has this in common when you look at roaming so far. I mean, even looking in my team there are a lot of Germans, but nobody is as German as a sausage, either they are they are married to somebody from a different country or having a different nationality, even running on two different passports. Lived or studied abroad, and I think this is really unique in the roaming industry, and that’s also why people are so unique in roaming. And that is why people feel also so comfortable in this roaming community because they are very much alike.
Johannes Opitz
Jason:
It’s with real pleasure that I’m here with Johannes Opitz, Vice President Commercial Roaming and International Mobile Wholesale a Deutsche Telekom AG. How are you, Johannes?
Johannes:
I’m very well. Thank you very much. And thank you very much for giving me the opportunity to participate in today’s podcast.
Jason:
You’re very welcome. It’s been long, long overdue that I’ve wanted to speak to you. I think it comes back to the time in 2020 when we found out that you were one of the top 25 influential people in the industry. And we had some really nice comments made about you at the time. Actually, somebody said “he has the strong will to improve the customers experience of the roaming service. In order to do that, he’s been working closely with operators around the world. His opinions and actions have been consistent so that I always enjoy working with him since I feel we are creating something new and good for our retail customers.”
Johannes:
Thank you. If you could also share with me who was the person, I would be delighted to personally thank this person.
Jason:
I have another one, and I think this goes as a good segue into our discussion, “Johannes is a truly seasoned professional that knows the business inside out. He’s able to look at issues from various different angles, proposes solutions that are sometimes disruptive or revolutionary to standard practices, but with good intent. He’s often sought for advice from other professionals in different fora or discussions. In my opinion, he is a truly worthy person for this prestigious award.” So, another nice comment from one of your fanbase.
Johannes:
Thank you very much. Actually, Jason, I also have some sort of history in the roaming area. When I started within Deutsche Telekom, it was my second job in Deutsche Telekom when I moved into the roaming department at that point in time, it was still Telekom Germany, but then from there it expanded to cover the whole group.
So, I was one of the first employees who was then taken care of roaming for the whole group, and that was back in the early 2000. But I also have to say I was working with a lot of great people, and I was able to really learn a lot from these people. And to one of one of those people was Michael Geisler. I think he is still a very well known in the industry. He was actually, among the people who have invented roaming, who were the founding members even of setting up what we now know as the GSMA. He was involved when setting up the first roaming agreement, so I have to say, I was very lucky to be part of this great environment and of course, in these times I was able to learn a lot given the way roaming partners are working among each other, despite in some cases being competitors.
So, I have to say it was there where a lot of ingredients that made me feel very comfortable, and that’s a lot of things I really liked and I still carry on what these people taught me at that point in time. And then I was leaving the roaming department. I was sniffing and working in different other areas of Deutsche Telekom.
But yeah, Jason, who knows better than the two of us. It’s a little bit like the song of The Eagles, you can check it out, but you never leave. Actually in 2015, I came back to roaming and that’s it.
Jason:
You missed it so much.
Johannes:
It’s a little bit of my genesis within Deutsche Telekom. Yeah.
Jason:
Yeah. But can we go a little bit further back? Can we understand what you wanted to do when you were growing up? Just thinking about university, thinking about what difference you’d like to make in the world. How did it start?
Johannes:
That is, I mean, I can share with you some of my childhood dreams. Everybody said, what was your what was your childhood dream, which I have to say, Initially, I wanted to become a pilot because when I was young, I loved traveling. And this is something of course, the environment you’re growing up has huge influence.
And I really have to say, I cannot think of a single school holiday I spend at home in Germany. You know, let’s exclude a little bit the winter holidays, which I always spent at home. But that was Christmas. So, starting from young I always spent my holidays abroad. So, I was there. I already could breathe the international air and what was closer then when somebody was asking you what do you want to become as a profession?
I was thinking of a profession where you can see the world where you can travel. And that was for obvious reason. It was a pilot at that point in time. And actually, I was even participating in these in this 2-day exam of Deutsche Lufthansa, in order to be selected to become a pilot. But yeah, people knowing me, I mean, I wasn’t taken because of at that point in time you were not allowed to wear glasses when you become a pilot. So that was why I didn’t qualify at it.
Jason:
So, you’re not the first person actually who said that they wanted to be a pilot and then they started working in roaming.
Johannes:
Look, I have my very personal opinion about it. And I’m pretty sure we will come to that in a second. So, and in addition to that, before I even knew what subject to study, I already knew that I wanted to study abroad. So, this was whenever I was asked, what do you want to become as a profession or what do you want to study?
My first answer was, I don’t know, but I will study abroad. So, and I think, Jason, this is also something everybody who works in roaming has in common. So, everybody has at least one leg abroad. Abroad means different country, different culture, be it that they are running on two different passports that their parents are coming, or their childhood is not where they have grown up, that they are engaged or married with a partner from a different country that they have lived or work abroad. I think everybody has this in common when you look at roaming so far. I mean, even looking in my team there are a lot of Germans, but nobody is as German as a sausage, either they are they are married to somebody from a different country or having a different nationality, even running on two different passports. Lived or studied abroad, and I think this is really unique in the roaming industry, and that’s also why people are so unique in roaming. And that is why people feel also so comfortable in this roaming community because they are very much alike.
Jason:
Yeah, it certainly was what attracted me, the concept of working with different cultures and understanding the differences and how people did things. And, and the first ever roaming conference. Oh my gosh, that was such a revelation for me.
So, you went to the University of Marburg. Was that first?
Johannes:
Yeah, that was first. I was signing up for Business Administration in Germany. And I would say it’s a very small town having now one of the oldest universities in Germany. It’s very much known not so much for business administration, but more for economics and I was studying there for the first two years, and then I decided to move for a year and a half to Italy to study in Milan and then I was coming back to finalize my business administration exams in Germany and when I finished these I started to think what to do next.
And to be very honest, and open at that point in time, I didn’t have a strong willingness to start working, so I was reflecting on what I was doing, my studies, what I love most. And my master’s thesis was also a very international topic. So, I decided to do an even longer master’s thesis and I decided to do my PhD.
I was then looking for a subject to write my thesis about, and during my studies I was working for different auditing companies in Italy and also in Australia. And we had one client we were doing the audit for that was a football club. And as one of my focus topics at university was actually auditing into accounting and M&A, I was amazed to see that football clubs at that point in time when they were signing up a new football player, they were activating the transfer fees and writing these fees off over time and it was at the end of the nineties when a lot of football clubs in Europe were going for stock market quotations.
So, the topic I then chose was what are the differences of football clubs and the different mechanics football clubs can go to the stock markets. And what is the motivation for people to buy football clubs across Europe. So, it was again a very international topic. I was traveling around Europe. I was having interviews with the responsible of football clubs in Italy, in the UK, in Germany, in Spain.
And it was really interesting to find out the different motivations, why people actually want to own a football club. Different countries, different motivations. Yeah. And that was it, very interesting.
Jason:
And what is just because I’m curious, what is the biggest motivation to take a football club?
Johannes:
Yeah, well, it somehow depends. I mean, you have football clubs that are really run as a company to make money. Then you have other factors where companies of the sport are used to do marketing. Yeah. For instance, take the Formula One and the engagement of Ferrari. This is the way how Ferrari is doing marketing for their cars.
You will never find anywhere an advert for Ferrari, but Formula One is their vehicle to do marketing and this is very much at that point of time it was very much into the Italian clubs. So, for instance, the owner at that point in time of Inter Milan was Pirelli. I mean they are producing tires, right? And when they lost market share against Goodyear in South America, the market leadership was gone.
They had signed up Ronaldo, the first Ronaldo, the Brazilian one, and used him as a marketing vehicle. And the first advert they were coming up with was Ronaldo when he was standing on this very famous rock in Rio and the sole of his soccer shoe was actually in the shape of a Pirelli tire.
So, they actually used him as a testimonial to gain back the market share or market leadership in South America. And then you have another sort of people who are using this more to, well, to please their ego. For instance, you can only become a president of Barcelona and Real Madrid if you really have the money.
Other people want to show off that they have so much money they can even afford having a football club. This is how people want to please their ego or show other people that they can do something. I mean, you have it also in Britain where non-British people are buying football clubs or horse racing stables or even the owner of Harrods is not British.
But Her Majesty has to buy in his grocery shop. So, this is how people think when they put money in other businesses and football has a lot of air time actually. And this is one of the biggest drivers for them.
Jason:
Thanks for explaining it. It’s a very interesting new world for me. So, from university?
Johannes:
From university then I was working for a couple of years with a venture capital company and here I had the first contact with telecommunication. And this is actually how I ended up in Deutsche Telekom. We were owning a value-added service company and so we were in contact with Deutsche Telekom in order to sell it off.
And this is where I got in contact with my first boss. And, we had a discussion and then he said, why don’t you come from boring Berlin to lively Bonn? And this is how I ended up in the western part of Germany.
Jason:
And you were in corporate finance in the first role?
Johannes:
My first role was in corporate finance and M&A. Yes. And then it was also very interesting. We were pitching for a project on road pricing in Germany. That was the first project I was involved in within Deutsche Telekom. So Deutsche Telekom is one of the shareholders of the consortium that is providing the road pricing in Germany.
Jason:
And at that point in time, we were thinking of whether we could also expand that business model to other countries. And of course, you need connectivity. And I would say it was one of the first M2M use cases I was engaged in. And here again, it was connectivity. It was provided via roaming in case this business model would have been expanded to other territories.
Johannes:
And there I got in contact with my former colleagues I was mentioning earlier, and it was so interesting and they wanted to set up a roaming department for the group I was. After one year, I changed to roaming. And this is how it all started.
Jason:
A magical time in the roaming sector because it was the beginning of IoT negotiations and all of those changes.
Johannes:
Exactly Jason. I think it was the first. Yeah, we were among the first one to have roaming discount contracts. When I started in that department, I think we only had five roaming discount contracts at that point in time. And when I now look back, we are having discount contract with more than 500 operators worldwide.
Jason:
That’s very advanced, I would say. And so, that was an important time in roaming to grow obviously, you know, the 2.5 G, the 3G came along. But what was it that made you want to change, to leave, to go into strategic projects?
Johannes:
The answer is already a little bit in your question. At that point in time, we were only talking about voice, SMS, and data. And of course, the focus was very much Europe. I also have to admit that at that point in time, roaming was still very expensive. So, there was not a lot of traffic.
The predominant part of the roaming traffic was in Europe and of course, some important tourist destinations like the US, like some tourist destinations in Asia, I think Thailand, Japan, Singapore and even Korea, where business was also important at that point in time. So, there weren’t so many different countries where it would have made sense to actually negotiate discount contract with. Data was not really picking up.
The only device that actually was generating data was the over-beloved BlackBerry. And even the BlackBerry wasn’t using a lot of data. So, I would say the learning curve I was in, after five years, became very flat. So, yeah, you could have with the Dutch operator for the sixth time a discount negotiation, and the only things that actually changed were the percentage of discount.
So, I felt that I wanted to learn something new and that’s why I actually stepped out and I was tracked a little bit around then in Deutsche Telekom. I went back to what I initially was hired for at Deutsche Telekom. So, I moved back into corporate finance, into post-merger integration. And I was engaged in from a sales perspective in a merger after Deutsche Telekom had acquired Orange in the Netherlands and also Tele Ring in Austria.
And then there was actually a very interesting time coming up when Deutsche Telekom had purchased significant shareholding in the OTE group of companies. So, I spent some years being an internal consultant or being part of Deutsche Telecom’s internal consultancy arm, and I was part of several projects in essence, and I also spent some time in Romania. So again, as you can see, quite the international working class that has followed me throughout my life and will continue to follow me.
Jason:
That must have been fascinating to kind of help those companies to understand the T-Mobile brand and to kind of like integrate them into the group.
Johannes:
Yeah. Fascinating. In all, all senses. It was very fascinating, I have to say, but I have to say I really liked it. I really liked working with the colleagues. And it was it was a great experience, I have to say, of course, several ups and downs. But yeah, looking back, it was it was really good.
Jason:
Must have been some cultural diversity. I’m thinking of, you know, this traditional view of Germans being very efficient. And then if you’re working with other countries where maybe they have a more, let’s say, I don’t know, a different approach.
Johannes:
A yeah, talking to somebody who has a centre of life in Spain where mañana, mañana is a… Yes, I couldn’t agree more.
Jason:
And so, after this experience supporting these operators in the OTE group, then you went to TV.
Johannes:
Yes, I went to TV because I was somehow a little bit exhausted of this international consultancy life because when working in these international consultancy projects, I, more often than ever, had to fly out on Sunday being in Athens until Wednesday and then Thursday, Friday in Romania. Or then at the end I was I think the last nine months I was in Romania and that was… When you do it for a couple of years it’s really exhausting. So, I was then also a part of different projects because when we were looking into different business lines in Romania and also in Greece, one of the key findings was that when telco companies are offering different services next to mobile, next to fixed line telephony and Internet, actually, TV is one of the keys, not diversifiers, but it’s actually triggering the purchase decision of the customer.
There might be also speeds, could also be a trigger for deciding for a product. But I mean, look at yourself when you decide for who is going to be your next provider there actually isn’t a lot to be decided upon. You have a fixed line, you have the price, you might have the speed. But actually, when you’re looking in the bundle and a lot of people are saying, oh, there is Champions League coming along or he’s the only provider who is offering the Champions League or the National League this is why people are actually buying a product.
They don’t buy a product because bandwidth is instead of 250, 300, or whether it is a euro more or less. But when it comes along with a compelling pay-tv proposition, this is the trigger, and this is also actually creating stickiness. And then we decided as Deutsche Telekom that we would want to put more focus on the TV proposition.
And that was also a very interesting time, I have to say. I learned a lot about the whole value chain of TV, starting with satellite transponders and ending up with set top boxes and encryptions. So yeah, we were in the Deutsche Telekom footprint, predominantly Eastern Europe. We were very successful in building up compelling pay-tv propositions. Then also helping the local companies start to really become the number one pay-tv operator in the respective territories.
And of course, then alongside helping to cross and upsell other telco services like fixed line internet, fixed line telephony, and then of course, the quadruple play, adding also mobile to it.
Jason:
So, it was another service type that you were exploring within your career on top of the ones that you’d explored with roaming, and you were doing it on behalf of the whole group, the European footprint?
Johannes:
Exactly. Exactly. Except Germany, because Germany, when it comes to pay TV, is still a little bit of a different animal because in Germany you have very strong public TV stations, and you don’t have these in Eastern Europe and pay TV has a higher dominance in the market in Eastern Europe. But it was also very interesting to see the different national viewing habits.
For instance, if you don’t have ice hockey in your channel line-up, you cannot sell a TV proposition in the Czech Republic and in the Slovak Republic, if you don’t have basketball in Balkans, you really have a problem. Yeah. Sport is something that always sells. When you look at Hungary, it’s completely different. I think the latest international tournament, where Hungary was participating was in the mid-eighties, leaving aside the last European championship. So, for Hungarians, they are more into Formula One racing and into water polo. So, it was very interesting to see the different cultures and different interests in sports and what is actually triggering a purchase decision.
Jason:
So, after this experience and moving around a bit, seven years after you left roaming, you went back into roaming.
Johannes:
I went back into roaming because I have never lost touch with my former boss who hired me, back in the in the early 2000 into roaming. And yeah, we were always in touch and went out, went out for lunch, even went out for dinners and having a chat here and there. And then once, he told me that he was about to retire and that he was looking for somebody who is going to succeed him on his retirement, and he said, look, as I was part of the gang who was creating this central group roaming area, he said whether I’d be ready to step into his shoes and this is how I ended up in large shoes. And of course, that was also triggering me and giving me an additional push to fill in these shoes. And yeah, this is how I came back.
Jason:
And what was the difference to the roaming department that you had left behind before? Had anything changed? Was there something, more challenges, or did it feel more or less the same?
Johannes:
There were so, so many challenges. I came back in 2015, and that was the year before Roam Like at Home was kicking. And there was so much more data, there were so many different services, different technologies, different use cases. Even on the tariff scheme, there had been so much development over the years, and you could really see how the customers have picked up on roaming, even the usage.
So, there was so much more traffic that it was a completely new world I really have to say, of course the underlying workings were still the same. And imagine when I left roaming and the phone available on the market was the Nokia whatever clamshell and now it was the iPhone and the iPad and the SIM cards in-built everywhere.
It was a new world I was tapping in.
Jason:
And so, from there you moved to become vice president of commercial roaming.
Johannes:
Yes. Actually then, I was in that department for six months when my boss at that point in time decided to take over a different position in Deutsche Telekom and I then followed him stepping into this position. And then it was even another complexity coming on top of it, because it was at that point in time when the machine to machine and Internet of Things business was about to start and pick up.
I was actually then not only engaging into roaming, but there were more and more customer requests coming up that they also wanted to support certain use cases, local access, because either permanent roaming was prohibited or limited or they needed a shorter ping time, or they wanted to have local break outs to the Internet. So, I’m now actually also responsible in buying local access from other operators in other territories.
So, this is also now part of the job the team and I have to have to care about.
Jason:
So right now, coming up to date and looking at the industry challenges that we have at the moment, what would you say is the biggest challenge that you see the roaming teams have?
Johannes:
We have some on the technical end. So, when we are thinking about the 2G, 3G sunset that has started, and for me, it comes a little bit into waves. Now you have the early adopters. So, in the US 2G, 3G is going to be retired throughout this year. So, everybody has to launch VoLTE. VoLTE is the predominant service you have to have when you want to start with 5G standalone.
So, I would say and alongside with 5G you will end up in that even roaming has to ensure a certain level of SLAs. So, I would say these three things from a technical perspective. So, VoLTE, 5G SA and of course everything that comes along with it, 5G, the security aspect the decryption, the encryption and then providing certain SLAs or different slices is something that is going to keep us busy for the next years.
And then when it comes to the different underlying use cases, there’s also a big challenge ahead of us because we all know that 5G is designed to support massive IoT. And I think from a commercial perspective and also from a sales perspective, there are a lot of operators out there. I would say a lot of discussions needs to happen.
We have to have an outreach program really to educate a lot of operators what requirements there are in the market because the OEMs who are actually needing connectivity, these are international companies or global companies having international supply chains that they want to provide the service in local markets and here a lot of education is needed. For instance, take while being German and Germans love to either talk about beer or cars to whatever example they’re doing there, it comes down to the end costs.
So, take an international car manufacturer and the whole X series of the BMW are produced in the US and nobody knows up on production which BMW is going to end up in in your personal garage in Cadiz. But they want to offer you connectivity so this connectivity, of course the easiest way to provide connectivity in the car is done via roaming.
And when we look three steps ahead, we will see self-driving cars. So, we need to have certain SLAs, we need also to have certain latencies and these latencies, they have to really work and need to be short because it’s a self-driving car that has to stop within a millisecond. So, this is something where the roaming industry, I think still has a lot of work to do in order to ensure a certain minimum level of quality and also to ensure that this service is working.
Jason:
So IoT, you say, is the biggest challenge that we have as an industry because we’re just not used to dealing with a customer type like this. It’s different, much different to a subscriber. It has different needs and quality levels. And so, what would you say are the critical changes that we need to make to face the future if IoT right now?
Johannes:
I think there are also different expectations in the market. So, whenever you open up a report from research companies, there is a very strong focus on IoT, and IoT is the next growth area. I think this has been on the table now for years, but what people have to understand is that actually we talk about that a lot of devices are going to be connected and people have to understand that roaming is just only one part of the connectivity of IoT. Everything that is in the house most likely is going to be connected to the Wi-Fi, smart street lighting might be connected with a fixed line. So, you will also see and have that telematics in cars. Sooner or later, they will have a backup solution with the satellite. Planes now have IoT solutions via satellite. So, we will see different connectivity technologies to support IoT and mobile and roaming as a subset of mobile is only one means how to support and to emit IoT.
And at the end of the day, I think the OEMs, they don’t care how the gigabytes are ending up in your car being parked in your garage, they simply want it to work. When a new map or the latest map is going to be installed in your car, it can be installed when your car is parked connected to your Wi-Fi.
It can also be uploaded by a mobile. I think at the end of the day, the OEMs, they don’t care how the connectivity ends up in the device. The only thing we have to ensure as operators is that it works. Also, I think the perspective of the OEM is that it is an additional part that is adding up to the car and more often than ever you will have discussions like, why do you need a very low price per gigabyte when a car is just sold for €50,000 or more? Because it is just one part out of so many that is built in a car.
So, I think operators also have to understand, and I would say, we also need to teach some of these operators who have never participated in an international or global IoT pitch, they have to understand that retail prices for these international pitches are different to local retail prices. At the end of the day, this business is also for them, it is incremental business so a global car manufacturer, they want to have one or two suppliers for connectivity.
They don’t want to have 200 different suppliers because they want to sell their cars into 200 different countries. They want to have two or three depending on the regions for North America or for Europe and Africa, for Asia. So, this is how they look at the world and they want that it works. And here smaller operators need to understand that they can either be part of this business or they are not part of this business.
And here finding the right wholesale price is going to be, I think, one of the major challenges we have. Also looking into the future, because you operate in an area where it’s needless to say that of course a SIM card that is 24/7 locked on a network of a mobile operator is producing a certain cost but on the other hand, as long as a decent amount of traffic is running through, it can be even more or there can even be more traffic running through than when my mother is traveling elsewhere still with her Nokia 4550 sending me a text “The hotel is great, talk to you in two weeks when we are coming back” A car even has a higher profitability and this should also be reflected in the underlying rates and only charging something higher because it is permanent in another network doesn’t really make sense. So, we need, as an industry, to find the right pricing in order to continue to support the demand of the OEMs while also covering, I would say, the network costs and allowing a decent margin in order to support this business because if we don’t support it, it will be done without us.
Jason:
It does seem to be that there’s a lot of competitors to mobile operators in the IoT space. So, the best outcome could be that at least operators are more aware of what’s happening there. They’re collaborating to deal with some of these critical issues you mentioned.
Johannes:
Yeah, there is a lot more collaboration needed among operators in order to serve this demand.
Jason:
So, with that in mind and since you have been appointed the chair of a new lab within IO, which is dedicated to IoT and machine to machine. Do you think we can make a substantial difference to the industry with such a group?
Johannes:
At least this is the aim of this group. There are all sorts of different challenges we need to tackle and discuss. And I think global connectivity is going to change the demand of the OEMs, as I outlined earlier. And we will have different ways how the connectivity is ending up in the M2M IoT devices.
As I said, it will be served by LTM, NB IoT, 5G, 4G, in certain cases even via 2G, you will have Wi-Fi fixed line satellite. It’s going to be a mixture. Even internally, we have discussions where we’re saying “Oh, we don’t need this technology, that technology. There’s a new technology coming up and we will see other technologies dying”. No, it has never been the case like this.
I mean, when Edison was inventing the electric light bulb, everybody said you will not be able to sell candles anymore. There have never been sold so many candles like in the last years. All right. So, it is always when a new technology comes up, it will be in addition to the existing one. And I also see this in IoT.
The only difference is what is the market share of roaming in IoT? And I think it is the best for the mobile industry to have a higher market share. And this is how we have to strive to support it and it is on our shoulders now to ensure that if we want to play a more prominent role in this global connectivity play. Do we want to be part of it?
Because we can. It’s also easy for us to outprice us and then the OEMs will simply look for different alternatives. The beauty of roaming is that it is now up and running for 20 years, it’s tested, it is working from today to tomorrow, it is, with 5G, it becomes very secure. We have all our fraud systems in place.
So, in case we find the right understandings among us as operators and we find the right pricing, I think it’s really a chance for us to support this business and to make it a success in case we cannot agree on certain underlying rules and structures, or we come up with outrageous wholesale pricing not supporting us. Now, then we don’t even need to spend time to further engage into this.
Jason:
A lot of people are talking about IoT in context of 5G, you know, and of course a few years ago I was reading in a few different places, oh, we can’t wait for 5G to come along. We need to already get engaged with IoT. But 5G, at least 5G SA, we are expecting it to be with the slices, with the quality of the service level agreements is it also that we should be pushing and supporting the promotion of 5G SA in order to ensure that the end-to-end types of IoT devices in the market are supportable.
Johannes:
Yeah, I’m a little bit hesitant to what extent we have to push the 5G standard, though. I think when I retire, Jason, there will be still 4G. So 5G is going to be in addition to existing services, but it will create a significant complexity on top of it because 5G is called standalone, but at the end of the day, it’s not even standalone because you even have 5G campus networks.
So, what does it mean for us? Does it mean that we now even have to come up with roaming agreements for 5G campus networks? Also, in case BMW wants to build up in the US a new campus network for 5G, do all American operators have to come up with roaming agreements? If so, complexity will explode. What does it mean when we want to even rent a slice abroad?
There has to be a lot of work to be done that even the slices are somehow standardized. I mean, you worked for Vodafone Group earlier. Imagine every Vodafone OpCo would come up with different requirements or different slices. I think as an industry we have to come up and say, okay, let’s agree on four different slicing types or different slices or five or six.
And one slice comes with this throughput, this latency, this SLA, that would actually require negotiations five times. It would even require testing five times. When I started in roaming, there was SMS, and voice and 2G data. Yeah, there was a little bit of data running through. And now look, just only look at data, you have VoLTE, ATM, NB IoT, 5G. How many slices in 5G? Six, okay, times six.
That brings me already up to 12. Do you want to come up with 12 different prices? I think at the end of the day for certain use cases we will even have different prices because higher quality has to be justifying a higher price. But we also have to reflect and put it into the overall ecosystem of what is the right price.
And what I see currently in the market is, actually two tendencies. First of all, due to COVID, a lot of traffic has gone, simply faded away. It will take years to come back in certain areas. It won’t even come back to pre-COVID levels. So a lot of operators are missing out on visitor revenues.
And the easiest thing they now have spotted was, okay, if borders are closed, if there aren’t any tourists anymore, the SIM cards I now have in my network, they need to be permanent. So why don’t I charge these cards ten times in order to offset some of the losses? I think this is the wrong approach because it’s actually not supporting the long-term vision of how to enable IoT.
So, we need to be very careful to set the right prices and have a discussion on what are the right prices. And do we want to charge IoT different? And what is the reasoning for charging it differently? Service level could be one element of charging it differently, but for the rest, I really don’t see that much of a difference.
Jason:
So, this group, the IoT M2M lab is going to advance on all of these topics. And which do you think is the biggest topic? The biggest topic that mobile network operators need to focus on of, of course, all of these.
Johannes:
Within the IoT space, you mean?
Jason:
Yes. What is going to be the biggest topic for the IoT M2M lab?
Johannes:
I think there are multiple challenges. I think the first one we should align on is what are M2M or what different flavours do we have on M2M use cases? So, is it a machine talking? Of course, a machine talking to a machine that is the most obvious one. But you have a lot of different cases when more and more, let’s call it Human Services, are added to it.
For instance, stick with your car, it’s compulsory to have an emergency call. So, there’s a human element already added to it. Is it still M2M? I would say so, yes. As long as it is multiple cars being able to call one or two numbers. It is still it is still M2M. Another element added is in-car Wi-Fi hotspot, is it M2M related? Yeah, I would say so. But then, the more you add to it, the more consumer related services are added to it. You will see that it is hard to consider this as M2M. Take for instance, an in-built SIM card in a laptop, always connected PCs. Is it M2M? I mean talking to M2M salespeople, of course they say it’s M2M. To other people they would say, hey, hang on a second, I’m selling in my local market SIM cards that can be put on an iPad.
So, is it M2M? Is it consumer? I think we really have to talk and decide what are M2M use cases. We all want to support. But are more consumer-focused use cases. And how do we want to support? The next element is really when we say, okay, we have agreed on certain use cases, how to treat these use cases in case we want to treat these use cases different, and we want to price differently. How to identify?
I think the identification is also a difficult one. Yeah. So, for instance, how would you identify your BMW being permanently in Spain from me driving just for two weeks to Spain with my car. That is roaming, you even have to price it differently because that is part of the regulation. It is periodic roaming. It’s not permanently, but you have to identify it.
So, all different sorts. Another element is not all the devices are generating so much traffic that they are creating a tap file. How to identify? How to price? So, lots of challenges. But the good thing is it keeps us sharp and it’s interesting.
Jason:
Yeah, I know for certain when I remember being the chair of the GSMA ring group back in the beginning of 2009 when this topic first came up and, you know, we were just trying to define what machine to machine was and how it should be treated differently and tried to get some transparency on it. And it appears to me that we haven’t advanced a lot.
So, there’s still a lot of work to do. So, it will be great to have this lab and we’re going to call out to the operator community to join us and to contribute to the discussions to the, let’s say, best practice that we can make in the industry.
Johannes:
I am really much looking forward to it. I have to say.
Jason:
Me too. I think with you behind as the chair, Johannes, we’re going to get some good attendance and we’re going to get some good conversations going.
Johannes:
I love to work under pressure.
Jason:
You’re very welcome. You’re going to be like Ronaldo in the description you made before, a figure of some renown in the industry through your work on machine to machine and IoT. I’m quite sure.
Johannes:
Thanks a lot. Thank you.
Jason:
So, Johannes, thank you very much for joining. Anything else you want to add?
Johannes:
Yes. I have to say that Covid has taught us that one of the biggest beauties of this job is really the international contact with the other operators, with the people of the other countries. And this is what I am personally missing, a lot, I have to say.
Jason:
Wonderful. Thanks, Johannes.
Johannes:
Jason, thank you. Have a lovely rest of the day.
