Nokia Siemens Networks

Enriching the customer experience

with radio access innovations

Executive Summary

Customer churn is a fundamental challenge facing operators in mature

markets, and increasingly in emerging markets as well. Stronger
competition in saturated markets has pushed up the estimated acquisition costs
to anywhere from 200 to 350 EUR per subscriber. And, as demonstrated in
comparative analysis, the steady rise in churn leads to a sharp drop off in
operators EBITDA margins.

With overall churn predicted to remain

high in the short term, and even grow
in the long term, customer satisfaction
and retention are key components in
the drive to increase profitability and
reduce costs. The underlying question
is how to meet the escalating demands
of increasingly fickle and tech-savvy
customers, and build long-term loyalty.
The answer is to listen to and address
customer needs and offer an enriched
experience that meets and even
surpasses their high expectations.

Nokia Siemens Networks

comprehensive portfolio of
Radio Access solutions improves
customer satisfaction and retention by
delivering optimal network quality to
end-users.
Nokia Siemens Networks Radio
Access solutions can significantly
contribute to an enriched customer
experience by ensuring sufficiently
wide and reliable coverage, low
latency, high capacity, and always-on
mobility. This allows subscribers in
different markets to enjoy exceptional
voice quality and fast data transfer
rates.

The availability of fast data rates also

enables customers to benefit from a
more dynamic offering of high-value
services, thereby helping to build and
maintain customer loyalty. In turn, as
customers become more satisfied, this
can directly lead to a reduction in churn
and an increase in profit.

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

Network quality has a

direct impact on
customer churn
Customers churn for a variety of reasons, but there are two major causes:
promotional offers from competitors and, more importantly, dissatisfaction
with their current CSP. By understanding the causes of their customers
dissatisfaction, CSPs can take steps to not only reduce churn but also
build loyalty which in turn makes their customers less likely to respond
to competitors promotions in the future.

Non-inspiring user experiences. Churn and eroding profits in mature markets.

Figure 1. Churn versus profitability - mobile operator examples

Source: Nokia Siemens Networks operational efficiency benchmark research

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

So what are the main causes of

customer dissatisfaction? Nokia
Siemens Networks recent Acquisition
and Retention study, based on 12,000
interviews, investigated the reasons for
churners dissatisfaction in both mature
and developing markets, and found
that a poor satisfaction level with
network quality is among the most
critical reasons for customer churn.
For example, poor voice/reception
quality was a major cause of churn
cited by 40% of respondents in the US
and 62% in Pakistan. Poor network
coverage was cited by 50% of the
respondents in China and 48% in the
US. The survey clearly demonstrates
that network quality is critical for
retaining customers.

By providing subscribers with high

network quality, the survey also
revealed that operators can counteract
the effects of competitors promotional
campaigns and advertising.
Among customers who had chosen a
new operator within the last six
months, the overwhelming driver
behind their choice was word of mouth
a factor that proved far more
important than any sales or marketing
initiatives. Again, the message is clear:
satisfied customers play a key role in
acquiring new subscribers.
High network quality means slightly
different things to different customers.

In developing markets, voice quality

and coverage are important, while in
mature markets data quality is
prioritized as customers begin to take
mobile broadband for granted.
Churn affects an operators bottom line
and, as the survey clearly shows,
end-user experience affects churn.
A positive, enriched user experience
depends to a great extent on the
quality of the network. Nokia Siemens
Networks portfolio of Radio Access
solutions is aimed at addressing the
key components of network quality
capacity, latency, coverage, and
mobility.

Key reasons for customer dissatisfaction

Germany
UK
US
China
Indonesia

Figure 2.

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

Mobile goes broadband

Increased capacity is an important element in contributing to
an enriched customer experience. Radio technology is the key
component in providing the high data transfer rates that give
mobile customers access to a fast broadband internet experience
wherever they are at home, at the office, or on the move.

While concerns over voice quality

remain a relatively minor cause of
customer dissatisfaction in mature
markets, it is data transfer rates that
have the potential to generate a
sizeable market impact both positive
and negative. Essentially, users want
the mobile internet experience
wherever they are in rural as well
as urban areas and they want it at
speeds approaching the rates they are
paying for.
Wireless broadband data transfer
became possible with the introduction
of High Speed Packet Access (HSPA)
in 2005. Over 94% of WCDMA
networks worldwide had put this
standard into practice by May 2009
(source GSA - The Global mobile
Suppliers Association). There are a
host of advantages with HSPA
compared to earlier WCDMA
implementations.

First and foremost, HSPA allows over

ten times peak data rates compared to
earlier technologies, bringing the
mobile internet experience in line with
the Digital Subscriber Line (DSL)
experiences that many customers are
already familiar with.
WCDMA/HSPA has become the
predominant technology for enabling
mobile broadband services in diverse
environments, and is found in both
mature and emerging markets.
WCDMA/ HSPA is indisputably the new
baseline for mobile broadband
systems. It is a key enabler for mobile
data traffic growth and addresses
strong end-user demand for personal
broadband services.
HSPA evolution also allows mobile
network operators to introduce a flat
network architecture approach.

Because there are fewer network

elements in the path of user traffic,
I-HSPA architecture helps reduce
network congestion and lowers
network latency to provide an improved
end-user experience. In addition to
enabling flat architecture, I-HSPA
allows 40-75% more broadband
subscribers over the traditional
approach. Thus, operators can
increase HSPA carriers and BTSs
without labor-intensive RNC and
SGSN re-dimensioning increasing
network availability to users.
Increased capacity and control
Although HSPA evolution shows peak
downlink speeds of 42 and even
80 Mbps when all capacity enhancing
features co-exist (2x2 MIMO, 64 QAM
and MC-HSDPA) the fact remains that
average cell throughput only increases
at a rate of approximately 20%
between HSPA releases.
The underlying reason relates to peak
rates only benefiting those users
located in extremely favorable
conditions. In reality, the average
conditions are impaired by several
factors that impact throughput, such as
interference and distance from the
transceiver.

Traffic and revenue growth in HSPA networks

Figure 3. Chart shows operator experiences from around the world

(7 from Europe, 2 from APAC, and 1 from Americas).

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

So even with these achievements

in peak data transfer speeds, the
average year-on-year data growth
of over 500% in HSPA networks can
create problems related to service
quality.
When analysing user data
consumption it has been found
that a few users generate most
of the traffic. Typically 90% of
traffic is generated by 5% of
users. Obviously, this can have a
detrimental effect on the experience
of the remaining 95%.
Nokia Siemens Networks Quality
of Service solution helps operators
prioritize time and resource-critical
traffic so that the network is used
optimally.

Essentially, it helps minimize the

effect of excess users data usage,
especially in peak congestion times.
It enables operators to prioritize
traffic to best suit their business; for
example, priority can be given to a
specific service, subscriber group,
or a combination of the two.
The Quality of Service aware
scheduler is the most efficient on the
market, enabling fully parameterized,
flexible differentiation for all classes
of users as defined by the operator.
Each class can be easily prioritized
and weighted for traffic use for a
fully flexible system that can be
monitored and changed in real time.

This differentiation also allows for

customized packages for different
business, consumer, VIP and besteffort users that can be combined
and marketed with other attributes
such as monthly quotas, maximum
bit rates or device offerings to
provide a more individual customer
experience. With these customizable
criteria, operators are able to satisfy
a wider spectrum of customers.
In addition to helping to retain
customers by improving their
experience and enabling them to
get speeds closer to the rate they
pay for, the Quality of Service
solution is also a powerful tool in
acquiring customers. For example,
new or promotional services can
be prioritized, ensuring that newly
attracted customers receive the best
possible experience.

Nokia Siemens Networks Quality of Service solution

enables fair allocation of capacity

Figure 4.

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

No time for delays

Typically, more than 80% of all data
bursts in WCDMA/HSPA networks
are so small (<100kB) that they are
more sensitive to latency than
throughput.
Source: Major global operator

Low latency is an essential component

that is integral to enhancing the overall
customer experience and driving longterm satisfaction. Although peak
downlink capacity is important, latency
and average cell throughput are the
clearest measurements of a networks
true data transfer rates. For customers,
low latency enables them to
experience high-end services at the
level they expect, without the
inconvenience of long delays. It also
leads to faster call set-up times.
It takes time for a packet to travel from
a server to the client, and there are a
limited number of packets that can be
sent in a TCP/IP data transfer before
the server stops and waits for
acknowledgement. Several factors
have led to increasing latency times,
for example the tripling in the size of
web pages over the last five years. In
addition, web page download time is
greatly affected by the performance of
the browser, the speed of the internet
connection, the local network traffic,
the load on the remote host, and the
structure and format of the web page
requested.
Much of the comparative marketing of
network differences between operator
offerings has focused primarily on
throughput, or maximum bitrates. But
the reality is that these data transfer
rates are only as good as the latency in
the system. The data transfer rates
might theoretically perform like a bullet
train. But if that train needs to make a
lot of stops along the way, does it really
reach its destination any faster?

While latency has long been a topic of

interest for technophiles, there is a
growing recognition in mainstream
consumer culture about the importance
of latency. As more people seek out
enriched services that require very fast
broadband speeds, they are also
becoming acutely aware of the
limitations of some networks.
By many accounts, system latency is
more critical than the actual peak data
rates for many IP-based applications
such as VoIP and online gaming.
Experiments at Amazon have revealed
similar results: every 100 ms increase
in the load time of Amazon.com (1
decreased sales by 1%. Some popular
services can become untenable with
the presence of significant delays.
Given the real feelings of frustration
that can occur when experiencing slow
load times, operators need to be fully
aware of their network latency to
provide the optimal user experience.
s tolerable waiting time is also getting
shorter. Although this may be mitigated
slightly with percent-done indicators for
certain application like streaming video
loads, it is less tolerated, if at all, for
services such as online gaming. The
latency lag time or in some cases the
entire game freezing for several
seconds may define a networks
performance.
And given the size of some online roleplaying game communities, such as
World of Warcraft with an estimated
10 million players, it is not a minor
issue to consider.
Nokia Siemens Networks offers the

best latency in HSPA networks today

with measured times on a live HSPA
R6 network of 41 ms RTT. Our latency
is on average 40% lower than other
vendors according to a latency
measurement with major global CSPs.
With fewer network elements, I-HSPA
can reduce the RTT further. By
reducing the need for node internal
traffic, the Multicontroller RNC in the
RNC-based networks will push the
RNC delay down a negligible level.
The end result will be an end-to-end
latency with less than 25 ms in HSPA
R7. The evolution in HSPA to LTE will
result in latency times of less than 20
ms: the measurements of Nokia
Siemens Networks LTE end-to-end
latency, from a commercial trial with a
major global CSP, show a perfect
match with expectations.
Measurements show a stable ping
below 20 ms.
And its not just data rates that are
improved by reduced latency; voice
services too can benefit significantly.
CS Voice over HSPA can yield up to
50% faster call set-ups and, as HSPA
continues to evolve, these times are
expected to become faster still.

1)
Kohavi Ron, Henne Randal M, Sommerfield Dan of Microsoft:
Practical Guide to Controlled Experiments on the Web: Listen to Your Customers not to the HiPPO, 2007

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

Broadband coverage
wherever you are
Comprehensive coverage is another key
component in providing an enriched user
experience. Customers expect access to
high-speed mobile internet in urban as
well as rural areas.

With these obvious benefits, many

countries have already reassigned the
900 MHz frequency from GSM to
WCDMA. Currently, there are already
10 commercial networks that have
launched HSPA900 in Finland,
Estonia, Thailand, Australia,
New Zealand, Belgium, Iceland and
Venezuela and over 130 mobile
devices have been launched for this
use on this frequency.

With the high cost of WCDMA rollout

on the 2100 MHz band, the promise of
WCDMA coverage over sparsely
populated regions has been a
challenging proposition for most
operators. However, the prospect of
refarming WCDMA on the 900 MHz
frequency band has made this
proposition much more viable.
Transmitting on lower frequencies
allows for greater distance of coverage
and better penetration indoors. The
radio propagation properties at 900
MHz also enable expectations of better
services delivered at faster speeds to
more users. Even inside buildings,
users in a suburban environment can
count on receiving data rates of 1
Mbps. Compared to HSPA 2100, HSPA
900 produces 60% faster speeds at -10
dB penetration loss and 130% faster
speeds at -20 dB penetration loss.

NetAct from Nokia Siemens Networks

provides advanced network
management to support the coexistence of GSM and WCDMA in the
same frequency band. NetAct can
monitor, measure, and configure both
GSM and WCDMA networks as well as
related services. Thus, it enables
seamless management of multitechnology networks by supporting the
management of both GSM and
WCDMA technologies, including GSM/
WCDMA interworking. The NetAct
Optimizer provides an automated and
accurate way to reach the best
possible frequency allocation for GSM
and is extremely valuable while part of
the frequencies are transitioning from
GSM to WCDMA.

According to Vesa Orava, Network

Manager for Finlands Elisa
Corporation conventional planning
tools may not be optimal for refarming.
The specialized optimization tool,
NetAct Optimizer is reliable, fast and
easy to use and improves GSM
planning in many cases where far
fewer channels are available for
GSM usage.
Nokia Siemens Networks network
hardware and site innovations offer
more opportunities for enhanced
coverage. Flexi BTS has -1dB
sensitivity better than the industry
average and has a better upload
performance, which leads to an
improved coverage of 15%. Flexi base
stations are also ideal for feederless
installations placed next to the
antenna. Feederless sites can improve
coverage by 40%.

HSPA data rates

6000

kbps
HSPA 900
HSPA 2100

5000
4000
3000

+60%

2000
1000
0

+130%
Outdoor

Indoor, -10 dB
penetration loss

Indoor, -20 dB
penetration loss

Figure 6. Indoor penetration of HSPA at 2100 MHz and 900 MHz. The higher the penetration loss caused
by the buildings walls, the greater HSPA 900s improvement in performance compared with HSPA 2100.

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

1 Mbps data service

on GSM voice grid

Figure 5. A comparison of GSM and WCDMAcoverage at different frequencies. It depicts cell area in a typical suburban
environment with service (voice and 1 Mbps data) available within a building. WCDMA900 provides
1 Mbps coverage using the GSM site grid.

The upcoming HSPA releases will

include an industry-leading Advanced
Receiver-Frequency Domain Equalizer
(FDE) and Parallel Interference
Cancellation (PIC), which will add more
than 30% coverage gain over other
gains. The Narrowband AMR codecs
introduced in 2006 require fewer bits to
be sent providing for a 15% coverage
improvement for voice.
Operators can further improve their 3G
coverage by adding Nokia Siemens
Networks 3G Femto Home Access.
Based entirely on the open source lu
architecture, the 3G Femto Home
Access Solution allows for a mass
market ecosystem.

The Femto gateway enables rollout

independent of the macro coverage
network, making it highly scalable.
In much the same way that many
businesses have already equipped their
premises with Pico cells to handle the
large volume of calls and push email,
many residential homes will be best
served with small, low-output Femto
access points. This is especially true
given the dynamic and participatory
ways in which users have begun
interacting with mobile internet services
such as social networks and instant
sharing of photos and videos.

Coupled with the potential for LTE

HSPA R8 to handle all voice traffic over
IP, the trend of mobile phones
replacing existing landlines may
accelerate in the near future. The
coverage improvement and potential
for outstanding service bundles make
3G Femto Home Access an attractive
strategy for winning a larger share of
the home media market.

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

Increasing mobility
Increased mobility is a network quality component that further
contributes to an enhanced customer experience.
For customers, access to always-on broadband internet should
not be restricted to fixed lines, but instead extend to the mobile
environment. In addition, customers expect their devices
to have sufficient battery life to take full advantage of this
possibility.

Subsequent standardizations of HSPA

(HSPA Evolution) will enable longer
battery life and make the first viable
start at having an always-on mobile
internet experience. This is an
important development for a more
positive customer experience.
In a 2008 Nielsen survey of mobile
subscribers in 16 countries, the desire
for longer battery life (38%) was far
more important than all other
considerations, including larger screen
size (22%), more memory (21%), and
improved data input (20%). This,
together with CS over HSPA, will
improve battery life by 100%, double
talk times, yield 50% faster call
set-ups and increase voice capacity
by 50-100%.
In the current R6 version, a mobile
device needs to continually transmit the
channel even if there are no voice
frames to be transmitted, which leads to
excessive power consumption.

HSPA R7 cuts the control channel

transmission when it is not needed,
allowing the transmitter to shut down
completely discontinuous uplink
transmission (DTX). The downlink
utilizes a similar concept (DRX) where
the device only needs to wake up
occasionally to check if the downlink
data transmission has started again.
As the user experience is of such key
importance, mobile voice quality can
be a key competitive advantage for
operators in emerging markets and
even in mature markets. Combined
with other HSPA R7 features
introduced at the same time as CS
over HSPA, talk times of 3G voice calls
can be increased by 50% with
extended battery life.

This means that talk times will be even

longer than current 3G standards. CS
over HSPA will also enable 50% faster
voice call set-up times, to less than two
seconds, further improving end-user
experience. As most users are unlikely
to tolerate mouth-to-ear delays of more
than 250 ms, the improved speed
gives an even level with current GSM
standards. With Nokia Siemens
Networks Quality of Service
mechanism, operators can ensure that
there is sufficient room for voice calls
and the speed remains high enough.

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

10

Summary
The importance of network quality
should not be underestimated in
terms of its impact on customer
churn.

As illustrated by recent studies, users

place great emphasis on this when
determining whether to remain loyal to
a particular operator. Customers
expect always-on broadband access
with minimal delays and maximum
efficiency in order to benefit from a
wide range of online services.
Failing to meet these high expectations
is likely to have a negative effect on
customer retention, as well as
acquisition given the significance of
word of mouth.

The most effective way to satisfy

demanding customers is to provide
optimal network quality.
This can be broken down into four key
components, which collectively
contribute to enriching the overall
customer experience: high capacity,
low latency, comprehensive coverage
and increased mobility.
There is clearly a strong correlation
between poor network quality,
a disappointing user experience and
churn.

By using Nokia Siemens Networks

extensive portfolio of Radio Access
solutions, operators can ensure
optimal network quality, enable an
enriched customer experience and
improve retention and acquisition.
And in todays competitive market
place, there can be few greater assets
than a large and loyal customer base.

Nokia Siemens Networks Enriching the Customer Experience with Radio Access Innovations

11

Nokia Siemens Networks Corporation

P.O. Box 1
FI-02022 NOKIA SIEMENS NETWORKS
Finland
Visiting address:
Karaportti 3, ESPOO, Finland
Switchboard +358 71 400 4000 (Finland)
Switchboard +49 89 5159 01 (Germany)

Copyright 2009 Nokia Siemens Networks.

All rights reserved.
Nokia is a registered trademark of
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Nokia Siemens Networks Oy.
Other company and product names
mentioned in this document may
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owners, and they are mentioned for
identification purposes only.
Nokia Siemens Networks 6/2009
Activeark Ltd.
C401-00501-WP-200908-1-EN

http://www.nokiasiemensnetworks.com