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TeliaSonera's Vlad Ihora on the growth of online gaming and the inevitability of digital distribution

GamesIndustry.biz Is it inevitable that over time people will migrate to digital distribution, and visit bricks-and-mortar less often?
Vlad Ihora

I think the business itself is going to make it, because certain charges related to commissions, and reducing the mark-up because you have to pay the retailer - and in the kinds of circumstances we're encountering today, the more you can put into the profit area, the better it will be for tomorrow.

It's more about making sure your customers are really into it, because if they're not and you're going to switch from one day to the other, and nobody will be able to find your game in the shops, then that's a problem. But in the mid-term it'll be a natural transition, maybe comparable to CD-to-mp3, not to the same extent, but it's about going along with the times.

There will always be people interested in buying the unit, but more like collectables, special editions, and so on. It will come to that point, but the business will dictate it.

GamesIndustry.biz What's business been like for TeliaSonera since we last spoke in 2007?
Vlad Ihora

We've gained business - new customers have come in, existing customers have stayed and upgraded, and nobody's left, which is always a good sign. It's not like we've gone out and started recruiting each and every gaming company out there, we've been very clear about trying to identify the ones which really require our services, and the ones we can really help.

With the ones that we currently have it's been great to enable their upgrades, and it's been really interesting for us to see that the uptake of their services generates a system behind the commercial purchase - you get companies not related to gaming are interested in hooking up to our network because there are certain games which run on our network that make it relevant for end-users.

Maybe a few years ago if you'd tried to pitch something like that to new telco organisations they'd wouldn't have been receptive - but not any more. This is a reason why the growth of online gaming is linking into the big circle of internet growth itself, and I find that really interesting. ISPs are paying so much more attention these days as to how they can best serve the end-users that are online gamers, by making sure that their connections to the internet pipelines are adapted in such a way that users won't get upset about lag, or packet loss, and so on.

GamesIndustry.biz For most consumers I guess they'll have encountered TeliaSonera as a result of your partnership with Blizzard Europe on World of Warcraft - with that game's success has it been easier to get all the various European ISPs to point in the right direction more recently?
Vlad Ihora

By all means, it's been a successful co-operation between ourselves and Blizzard to make sure that we communicate quite openly in-between the end users and the ISPs, in order to close that gap and make them work together towards a jointly beneficial outcome.

If you have upset end-users at the end of the day, the ISP is going to suffer. If you have happy users who are playing the game and promoting the name of the ISP, everybody is going to be happy. Sometimes it sounds like a flower-power concert, but it's straightforward - deliver a good service on all levels, and all parties benefit.

It's quite clear in the mid- to long-term that if you maintain what you've promised, as the ISP, the game provider and in our case the carrier, then the customer satisfaction and loyalty will be there, and of course the long-term business will prosper.

We've added about 67 new customers in this period, though it's not so much about the numbers as it is about the actual application and value to both sides. The fact that we've been entrusted with being, sometimes, the sole supplier of not just connectivity but the whole infrastructure, including management, services and equipment... it's bringing an increased level of responsibility, but also an increased level of satisfaction.

GamesIndustry.biz What's the outlook for the next year or so, is there confidence that TeliaSonera is in a good place to weather the financial storm?
Vlad Ihora

I think I'd be pinned to the wall if I said everyone should invest in the internet because it's the safest industry... but to a certain extent I would say it's the industry that can weather the storm, quite easily.

However, it's down to the administration of each type of business to weather the storm in the best possible way. In our case we've always been a very stable company, we've never been exposed to any real crisis before, and we're not really exposed to it now. Last year we've had of the best results, and we're continuing to be extremely profitable, solid and stable.

It's not like certain of our customers aren't feeling it already, but investments in, or maintaining of internet presence or services that people use from our side are essential. The internet is no longer a luxury to have, or experiment in - it's a really established sector, and this sec

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