Technology and Innovation

The telecommunications industry is being shaped by an ongoing increase in demand for additional bandwidth and connectivity in relation to more and more connected lives.

Forward-looking infrastructure roll-out

Cisco’s1) projection for the development of data demand between now and 2021 underscores the importance of continuously developing the telecommunications infrastructure. The A1 Telekom Austria Group is accounting for the dynamic increase in data volumes transported via its networks through extensive invest- ment. In the 2017 financial year, a total amount of EUR 736.9 mn (CAPEX) was invested, with one of the areas of focus being broadband expansion.

The convergence of fixed-line and mobile networks is playing an instrumental role in ensuring that the A1 Telekom Austria Group has a high-quality, future-proof network infrastructure. After all, to guarantee efficient, increasingly wider region- al coverage with increasingly greater bandwidth is to intelligently combine these two technologies. Which is why the A1 Telekom Austria Group has already estab- lished itself as a convergent operator in six of the seven core markets in its oper- ating region (Austria, Bulgaria, Croatia, Belarus, Slovenia, Republic of Macedo- nia). The forthcoming 5G communications standard, the ‘Internet of Things’ (IoT) and cloud-based services for the B2B market all require high computing capacity. This is resulting in increasing relevance for data centres as the third pillar of the A1 Telekom Austria Group’s infrastructure strategy.


Fixed-line broadband expansion

Fixed-line broadband expansion is being driven forward by the fibre roll-out in the form of FTTC, FTTB and FTTH (see graphic). In addition to bringing fibre closer to the customer, the performance of remaining copper lines is being increased by combining the noise cancellation technology vectoring with trans- mission technologies such as VDSL2 and G.fast, with target transmission rates of several 100 Mbps for medium line distances. G.fast typically provides data rates of approx. 500 Mbps. In lab trials, advanced G.fast technologies already allow transmission rates of several Gbps.

Since July 2016, A1 in Austria has also been offering its customers a hybrid modem that combines mobile and fixed-line infrastructures in order to provide fixed-line products with higher bandwidths. The modem’s smart technology allows the bandwidths of both technologies to be combined. If necessary, A1’s hybrid modem can supplement the performance of DSL fixed-line connections with LTE. As a result, data speeds of up to 150 Mbps can be achieved and more households can be reached with higher bandwidths. Once again, A1’s hybrid modem highlights network convergence as one of the key pillars of the A1 Telekom Austria Group’s strategy.


Mobile network expansion

The A1 Telekom Austria Group offers the LTE (long-term evolution) mobile commu- nications standard in Austria, Bulgaria, Croatia, Slovenia, the Republic of Serbia and the Republic of Macedonia. The accelerated roll-out of LTE Advanced in 2017 led to a significant improvement in the supply of high-speed mobile Internet in Austria, Croatia, Slovenia, the Republic of Serbia and the Republic of Macedonia. In order to achieve even faster mobile Internet, the A1 Telekom Austria Group is using LTE Carrier Aggregation with 256 QAM, a complex modulation technique, at select- ed locations in Austria, Croatia and the Republic of Serbia, enabling data rates of up to 400 Mbps. In Slovenia, the use of 4×4 MIMO (multiple input multiple output) during a field test produced data transmission rates of over 850 Mbps. Carrier Aggregation, complex modulation techniques and massive MIMO will also play a key role in 5G since these serve as a technological basis for high bandwidths and the particularly efficient use of available frequency bands.


Data centres: Third infrastructure pillar

State-of-the-art, highly secure data centres will continue to become more impor- tant going forward. Which is why they form the third pillar of the A1 Telekom Austria Group’s infrastructure, alongside mobile and fixed-line networks. The fol- lowing technological developments are playing an important role in this respect:

Network function virtualisation (NFV) can be operated in IT data centres with higher agility and cost-efficient, commercial off-the-shelf hardware.

Growing customer demand for cloud-based solutions (e. g. SaaS, PaaS, IaaS) via secure, local data centres.

Applications like the ‘Internet of Things’ (IoT), Advanced Analytics and 5G de- velop their full potential through edge computing. Applications with a huge amount of processing power are run in as close proximity as possible to the site where the service is provided in local or regional data centres.

In 2017, this prompted the A1 Telekom Austria Group to lay the groundwork for an ultra-modern data centre in Austria and conclude the construction of a data centre with cutting-edge technology in Belarus. Future-proof technologies like SDN (Software Defined Networking) are an essential part of state-of-the-art data centres, because they enable highly efficient and flexible use of the individual components and services within a data centre. SDN allows network traffic to be programmed and managed centrally, without having to manually access each individual physical network component.

The A1 Telekom Austria Group successfully continued its network infrastructure virtualisation program across all its subsidiaries in 2017. At the beginning of 2017, velcom implemented the first fully virtualised commercial core network in the world in Belarus as part of its ‘virtual one core’ flagship project.


Digitalisation partner

Through the establishment of A1 Digital as a subsidiary, the Group is highlighting its self-perception as a driver of digitalisation and is focusing on individual solu- tions for small and medium-sized companies. A1 Digital focuses on two areas in particular: IoT and cloud-based ICT solutions.

In the first case, increasingly cost-efficient and thus more widely available sensors, screens and more powerful processors provide an abundance of applications and business models — for instance, in the areas of asset tracking, fleet management or smart metering. In the second case, software solutions via cloud-based marketplaces are being made available especially to small and medium-sized companies (Software as a Service (SaaS)). Infrastructure as a Service (IaaS) is reducing the complex and costly acquisition and modernisation of hardware, such as servers, and is thereby also conserving resources. Cloud- based solutions allow companies to adapt their applications, IT infrastructure, computing power, network capacity and storage in a flexible and scalable man- ner. This requires less energy than a conventional office infrastructure, and also emits fewer CO2 emissions (see ‘Social and Environmental Responsibility’).

Alongside service and consultancy expertise, A1 Digital also prioritises data se- curity and infrastructure quality. Thanks to data centres in Europe, the security of all activities is governed and enforced by EU legislation.

The acquisition of Swiss cloud provider Exoscale in September 2017 is now allow- ing A1 Digital to offer cloud-based services on this platform, too. Zurich and Gene- va are now also available as ‘points of delivery’ alongside Vienna and Frankfurt.


Ecological network design

The A1 Telekom Austria Group’s biggest environmental impact is generated through electricity required to operate its networks. This accounts for around 80 % of its total energy demand. Applying the latest RAN (Radio Access Network) equip- ment in A1 Telekom Austria Group’s subsidiaries not only guarantees best quality of service but also aims to achieve energy efficiency. This is why old 2G and 3G equip- ment is renewed when rolling out LTE. Innovative cooling techniques including hot spot suction, cold aisle containment and heat recovery systems can reduce elec- tricity 1) consumption by as much as 75 % compared with conventional cooling systems. The A1 Telekom Austria Group’s energy efficiency was improved by an overall figure of around 26 % between 2016 and 2017. In 2017, its total energy consumption was 791,790 MWh. Its electricity requirements amounted to 655,355 MWh, of which 62 % was generated from renewable energy sources.

The A1 Telekom Austria Group adheres to the following ecological principles in life cycle management: avoid waste, preserve resources and keep valuable raw materials in the cycle for as long as possible (Reduce — Reuse — Recycle). Out-of- service devices or facilities are systematically dismantled and their components professionally recycled.


Energy from sustainable sources

Efficiency measures alone are not enough to compensate for total electricity vol- umes. Which is why the A1 Telekom Austria Group takes steps to ensure that any amount of electricity that cannot be reduced by taking appropriate measures is as sustainable as possible — by using electricity from renewable sources such as solar, hydro and wind power. The A1 Telekom Austria Group’s largest solar park opened in Belarus in mid-2016, spans 41 hectares and has 85,000 solar panels, which produce roughly 24 million kWh of electricity per year. In Austria, Bulgaria, Croatia, Belarus, Slovenia and the Republic of Serbia, there are about 100 mobile base stations running on solar and wind power or on hydrogen fuel cells.


Electromagnetic fields

Despite research findings such as those presented by the European Commis- sion’s Scientific Committee on Emerging and Newly Identified Health Risks (SCENIHR), which find no causal link between mobile phones and health prob- lems, when it comes to the topic of mobile communications there is constant speculation regarding electromagnetic fields (EMF). The A1 Telekom Austria Group complies with — and even keeps well below — all exposure limits recom- mended by the ICNIRP/WHO for daily operations involving base stations and mobile devices.


Customer orientation

The A1 Telekom Austria Group meets the needs of its customers with a broad and innovative range of products. This clear focus on customer requirements produces innovations like the A1 hybrid modem or ‘A1 Smart Home’. To identify customer re- quirements and learn how the Group’s products and services are being received on the market, the A1 Telekom Austria Group uses a number of information channels, including shops and service lines, social media like Facebook, Twitter and YouTube, customer apps and Google+, and its own support communities.


Innovation, R&D

To assert its leadership in the field of technology and infrastructure, the A1 Telekom Austria Group focuses on many areas of research and development (R&D). The top- ic of innovation has been implemented as a strategic cornerstone. In Austria, A1 promotes innovation by new companies with its ‘Start Up Campus’ initiative, which provides expertise and infrastructure to help make innovations a reality.

In addition, the A1 Telekom Austria Group is a partner of the Industry 4.0 platform and is addressing the interoperability of IoT platforms within the pan-European H2020 project symbIoTe, which is supported by the European Union and is also expected to bolster research in the IoT.

1) Cisco, The Zettabyte Era (2017)

Average

speeds

Devices and connections

per capita

2016: 27,5 Mbps

2021: 53 Mbps

2016: 2,3

2021: 3,5

Internet users:

% of population

2016: 12,9 GB

2021: 35,5 GB

Average traffic

per capita

per month

2016: 44 %

2021: 58 %

FTTC

Fibre to the Building

(G.fast)

Up to 250 m

Up to 500 m

ARU1)

◼︎ Copper

FTTC

Fibre to the Curb

(VDSL2 inkl. Vectoring)

FTTH

Fibre to the Home

1) Access Remote Unit

FTTC

Fibre to the Curb

(Vplus inkl. Vectoring)

◼︎ Fibre

Up to 800 m

ARU

Telephone exchange

Source: Cisco, VNI Forecast Highlights Tool (2017), Data on a global basis

Mobile communications technologies at a glance

9,6 – 236 Kbps

Voice and first data services

since 1994

Bis zu 400 Mbps

Voice and highspeed data services

since 2010

3G

Targeted > 1 Gbps

High bandwidth and minimal latency

> 2020

4G

No data transmission

Voice telephony

1974 – 2001

2G

0,3 – 42 Mbps

Voice and broadband data services

since 2003

5G

1G

Excellent network

quality in 2017

Connect Test: Winner (Austria)

futurezone Netztest: Winner (Austria)

DMTEL GSM/UMTS/LTE Quality Test:

Winner (Belarus)

Notel RF Benchmark Quality Assurance:

Winner (Belarus)

Ookia Fastest Network in Serbia: Winner (Republic of Serbia)

HIGHLIGHT PROJECT

The SDN-based product SD WAN (Software Defined Network- ing in a Wide Area Network), which has been available to business customers (with a focus on small and medium-sized companies) with multiple locations since 2017, is an important step forward for SDN applications. SD WAN offers the following advantages compared with conventional technologies:

Simple integration of applications run via the cloud

Fast, straightforward and secure location connectivity

The service can run on any already available connectivity

SD WAN

Sustainability targets

‘Technology and Innovation’

2016–2018 2)

LTE coverage of 80 % in the A1

Telekom Austria Group

Coverage of over 60 % of Austrian households with a bandwidth of at least 40 Mbps on a pure fixed-line network (former product logic: coverage of 70 % with 30 Mbps)

Identification and promotion of marketable innovations, for example via start-up initiatives

2) Baseline for targets is 2015.

1)Energy efficiency is defined as electricity per terabyte of transferred data volume

DIGITALISATION

The A1 Telekom Austria Group’s objective is to become the first point of contact and key partner for the digital transformation of companies in or- der to unlock new potential in digital services, such as cloud and ICT solutions. Digital commu- nications solutions are encompassing an in- creasing number of areas of life — including in the residential business. Here, the focus lies on services for entire households and convergent product bundles that include, for instance, smart home, TV and music streaming services and cloud solutions. In addition to the virtualisation of the network infrastructure, services are also being embedded in a virtualised, cloud-based in- frastructure. This allows for significantly more ef- ficient operating processes at lower costs and quicker launches of new services, thus offering an ideal platform for competitive innovations.

Technology and

Innovation

Research partnerships

University of Technology of Vienna, Sofia, Zagreb, Belgrad

Christian-Doppler-Laboratory for

Technologies for Substainable Mobility

Christian-Doppler-Laboratory for Dependable Wireless Connectivity for the Society in Motion

Josef Ressel Center for User-friendly

Secure Mobile Environments.

Brno University of Technology with a focus on the smart meter, IoT and smart home

Intrapreneurship

HIGHLIGHT PROJECT

In 2017, the A1 Telekom Austria Group mobilised the innovation potential of its employees with an intrapreneurship programme. Three business ideas focusing on digitalisation were selected for implementation from a total of 65 projects. The projects will run for a year with the aim of implementing their ideas and concepts within the organisation, once they have reached a certain maturity.

Data protection

Enormous growth rates in data volumes transmitted are all part and parcel of advancing digitalisation. The A1 Telekom Austria Group makes sure that its customers are on the safe side as they make the most of the associated opportunities and potential of digitalisation.

A1 Telekom Austria Group

data protection certifications

Austria

ISO 27001

ISAE 3402

ECO Datacenter 3.0

Bulgaria

ISO 27001

Croatia

ISO 27001

A1 Digital

ISO 27001

ISO 27018

Republic of Macedonia

ISO 27001

All companies of the A1 Telekom Austria Group undertake to comply with the most stringent data protection and data security standards. In addition to any legal re- quirements applicable in the respective countries, all subsidiaries are also bound by any data security standards created for this purpose as well as all other coun- try-specific directives on data security and data protection. A1 in Austria, for in- stance, has a range of certifications including ISO 27001, ISAE 3402 and ECO Datacenter 3.0, which attest to these high security standards. At A1 in Austria, the Data Privacy department has been responsible for compliance with legal and internal data protection provisions for a number of years now. The position of data officer has also been created within the A1 Telekom Austria Group in re- sponse to the broader requirements for companies imposed by the General Data Protection Regulation of the European Union.


Harmonisation of data protection

This General Data Protection Regulation is currently posing a considerable chal- lenge, and will continue to do so in the years ahead. The EU decision taken in May 2016 sought to harmonise data protection law throughout the European Union and subject it to a set of largely standardised rules. Protection of personal data is at the core of the regulation with objectives such as giving affected people more control over their data, making extensive information available on how this data is used, ensuring better protection for children and making it easier to access legal protection. The EU General Data Protection Regulation will enter into force on 25 May 2018, and ever since 2016 the A1 Telekom Austria Group has been working to gradually enact it in the countries covered by the regulation.