JE: I think this flat-IP decision is more like when you buy a car, you want to first look at its looks, and then look at the fuel efficiency. So I think it's that kind of a decision - it's not necessary as of now. I guess it is a desirable state, but is it an essential state? Maybe not at this point of time. In terms of really understanding cost efficiencies, I don't think operators have completely grasped the cost economics of their network. I mean, they can do it technically, but if you present a business case to the CFO, I think that modeling goes a bit haywire, so I think that's something which operators need to work on.
AG: I think you make a really good point there. The engineering group want to have the latest and greatest devices in customers' hands, the device distribution people want to give the cheapest ones out there, and the pricing folk want to drop the prices to be cheaper than what you can move a bit around the network. So you've got these three parties with diverse models and you have to make sure those three different needs get aligned, and it's a real challenge.
Christian, does your CFO get the economics?
CD: Yeah. [laughter] We have a CFO and a CEO who is also a previous CFO, so he's very focused on the dollars and the business case. Our challenge on the technology side is that we need to reduce the costs, because that's the only thing in our control. We increased our traffic by 18 times in the last year, maintaining the same backhaul. So we have reduced our cost by 18 times for the backhaul. It also means very strong negotiation with our vendors. Vendors are coming with all those claims of reducing costs by doing it this way. Very often you don't see the cost savings. So you really need to understand the economics of your network costs to be able to drive the costs down.
SC: This is why, as a CTO now, I always call myself the most non-technical guy in the company [laughter]. The reason is that I want to be even more upfront on the overall cost structure rather than just focus on the technology, because there's a lot of factors that affect the whole cost structure, not just the stuff we're buying. It's the whole value chain and how we work together with the international bandwidth provider, the domestic leased-line provider - they have their own costs they need to adjust as well. But my job is to make sure when we build anything, we understand the business rationale.