Hi3G: A Challenger in the Mobile Market

Hi3G Access was founded in 2001 and is the fourth largest operator in Sweden. The company is based in Stockholm and operates in Sweden and Denmark under the 3 brand. As a late arrival to the market, Hi3G positions itself as a challenger. In Sweden, Europe’s most competitive LTE market, Hi3G launched the world’s first TDD/FDD dual mode LTE network in 2011, which aroused interest from operators worldwide. ZTE Technologies interviewed Peder Ramel, CEO of Hi3G, and Jörgen Askeroth, CTO of Hi3G. They talked about their strategy of being the strongest provider of data services. They shared with us information about the present dual-mode network and their plan for the next stage of network.

Q: Could you introduce Hi3G and its financial performance?

Peder: There are four big operators in Sweden and Denmark, and we are the challenger. We are the smallest operator and latest arrival into the market, but we have the best data network. We have to be the strongest when it comes to providing data services through handsets, dongles, and routers. In terms of finances, we are growing by 10 percent to 20 percent every year and have had a positive cash flow for the past three years. So we are now in a strong financial position.    

Q: Hi3G launched the world’s first 84 Mbps HSPA+ network in 2010 and the world’s first dual-mode LTE network in 2011. Can we say your brand proposition is to always be different?

Peder: Yes definitely. The reason our subscribers choose us is because we have the best data network. We are the challenger and have to do everything differently. It’s not just that we have to have the best technology, we have to do marketing and have offers that stand out as well; otherwise, we wouldn’t stand a chance against our bigger rivals. 

Q: Hi3G has been chosen as the best mobile internet operator for five consecutive years. What has contributed most to your achievements?

Jorgen: You have to focus. You have to be best at what you are doing and select the right equipment from the supplier. You have to have the right people and run your network better than other operators run theirs. Everything needs to be carefully planned.

Q: Data traffic has increased much faster than data revenue, and operators generally agree that optimized smart pipes are the way out. What is Hi3G’s strategy in this respect? How do you increase your mobile data revenue?

Peder: As an operator, you have to realize that the lion’s share of the revenue is coming from voice. We have to change that so that revenue is coming from data services. It’s a different way of viewing the revenue stream. We have to make sure that we get paid for data services. Of course, on the other hand, customers expect high speed and a huge amount of data, and we must have a network that can distribute this data at decent prices. If we can do that, we can also charge customers on data services. We have to be very innovative and offer different services, not just be a pipe. I don’t think we should develop the services ourselves, but we have to make sure that the services are working best on our network and that they are very easy to use. Easiness is very important for customers.

Jorgen: Cost efficiency is very important when looking at mass data usage. Our customers use three to five times more data than the average user.

Peder: We are the most cost-efficient operator in both Sweden and Denmark. Being the smallest operator, we have to be.

Q: Hi3G launched the world’s first TDD/FDD dual-mode LTE network in December 2011. How is the network running? 

Jorgen: What the customers demand is not a specific technology but high speeds and reliable performance. We don’t talk to them about technologies; we just talk about services. TDD or FDD doesn’t mean anything to most people, but data plans do. Today, growth in data traffic is more or less being driven by smartphones, whereas it used to be driven by mobile broadband and dongles. That has now changed, but mobile broadband still uses much more data than smartphones. TD-LTE smartphones is still future. The customer take-up of LTE services will be very different/aggressive when iPhone is LTE enabled.

Q: In Sweden, Europe’s most competitive LTE market, what are your advantages compared to other operators?

Jorgen: To be able to offer a good network and service to the end customer, you need to have capacity in the network. In Sweden, we have 50 MHz of TDD2600 and 10 MHz of FDD2600 as well as 10MHz FDD800. So we have sufficient spectrum. It gives us the possibilities to offer different types of services.

Peder: We very much believe that the distinctions between 3G, 4G, TDD, or FDD are not very important. We have to give them a reliable service at a high speed. We focus more on promoting reliability than 4G or 3G technologies.

Q: What is your plan for the next stage of the LTE dual-mode network?

Jorgen: Our plan is have full LTE coverage within two years with a significant focus on dual-mode LTE.

Peder: Today, we are reaching more than 99 percent of households with 3G. We have to have the same coverage with 4G.

Q: What did you think about ZTE’s performance throughout the project? Where do you think ZTE could improve?

Jorgen: We are extremely impressed by the fast rise of China and Chinese companies and are very happy to have ZTE as one of our network suppliers. I think that ZTE products are very good. We won the Best Mobile Broadband award on 3G. Next time, it will be a combination of 3G and 4G and it is important to us that we win again. 

There are cultural challenges but we are learning from each other.

Culture change has to take place from both sides. An important lesson that both ZTE and Hi3G learnt was how important it is to keep our work teams stable and not change staffing because that means  the learning process has to start over again with loss of time and momentum. 

Peder: What we are doing now, with this visit to ZTE head office, is very important. We are meeting face to face to discuss and resolve such issues.

Q: The network is significant because it points to a new direction in networking and operation. Could you share some experiences in building the network?

Jorgen: First of all, the different technologies in the network have some challenges. We have the 900 and 2100 on 3G and FDD800, FDD2600 and TDD2600 in the 4G network.

You need to be very efficient in what you are doing to get the right performance and the right services.

Q: TD-LTE is lagging behind FDD-LTE globally. What do you think of the future of TD-LTE?

Jorgen: We expect the same kind of dongles regardless of technology. The efficiency of the TDD spectrum is very important for us.

Q: What are your expectations for the future?

Peder: To have the best 4G network and 3G network in Sweden and Denmark within two years. We want to reach a 25 percent market share of the mobile market, there are four operators, and we should have our share of that.