In many companies, for a long time, digitization was considered more of an abstract concept for the future. In the meantime, however, it has become a necessity in order to be able to survive in national and international competition. The importance of digital infrastructures has also grown in Austrian SMEs in recent years – but Austria still has some catching up to do as a digitization location. In a recent study with marketmind, Magenta Telekom examined which sectors are pioneers in digitization and the importance of technical infrastructure when choosing a location.
Efficient broadband internet via fixed network is all the more important the larger the company
The basis of every digitization is the network – a point that determines the success of digitization initiatives. This not only applies to the IT infrastructure in companies, but above all to the connection to the Internet. Two thirds of Austrian SMEs rely on a fixed network Internet connection – the larger the company, the more often the wired Internet is used – while a third and mainly smaller companies use mobile Internet or a hybrid connection. There is also a difference in the sectors: in accommodation and gastronomy, the manufacture of goods and information and communication, a mobile Internet connection is used more often than average.
Most companies want high-speed and stable Internet connections with fiber optic technologies such as FTTH/FTTB (fiber to the home/fiber to the building) or fiber optic cable Internet (HFC), seven out of ten companies (72%) are already using these technologies. 43 percent use fiber optics, 29 percent the technologically equivalent hybrid fiber coax network (HFC). When it comes to industries, Health & Social Care is number 1 (53%) when it comes to fiber usage, followed by Retail (47%) and Information & Communications (44%).
However, there are measurable regional differences in Internet use in Austria: When it comes to fiber optic use in a comparison of the federal states, Salzburg, Tyrol, Vorarlberg (53% FTTH/FTTB, 19% HFC) and Upper Austria (51% FTTH/FTTB, 31% HFC) are pioneers. Viewed nationwide, however, one in five people still use the slower DSL Internet, with the use of DSL networks in Styria and Carinthia being above average (27% each).
“Rural areas and above all SMEs are sometimes still supplied with old, slow DSL copper networks. As Magenta Telekom, we have made it our mission to digitize Austria and strengthen Austria as a business location. We already supply Austria’s companies with fiber optic internet and more than 1.5 million households and businesses with our fast gigabit internet. We are continuing our digital promise by investing large sums in the expansion of our ultra-fast broadband networks every year – one billion euros by 2025,” says Werner Kraus, CCO Magenta Business.
Stability, Speed and More Bandwidth Key Reasons for Fiber Optic Internet
Depending on the number of employees using the Internet in a company and the activities carried out in the workplace, bandwidth can become scarce, which in turn affects Internet speeds. Larger companies in particular therefore rely on the innovative fiber optic technology to ensure the stability and higher load capacity of the network.
Stability, higher Internet speed, more bandwidth and higher load capacity are cited as the main reasons why companies use fiber optic technology. Half of the companies that are not yet using fiber optics are very interested or interested in fiber optic Internet.
“It is very important for the competitiveness of companies to use the opportunities of digitization for medium and long-term growth. Powerful and flexible software platforms in connection with high-performance fiber optic networks are a fundamental requirement,” says Werner Kraus.
Digitization important for decision-makers, economic challenges slow down progress
The high importance of digitization for the success of one’s own company is noticeable in the awareness of the management level: More than half (23 out of 40) name digitization as an important competitive advantage. Technological change is in full swing – at least in theory. Because in the next few years, C-level decision-makers will primarily be faced with economic challenges such as the increasing shortage of skilled workers, the effects of the corona pandemic and delays in delivery, which can slow down the digitization progress of companies. When implementing digital technologies themselves, delivery bottlenecks, the procurement of hardware and the availability of personnel are also seen as critical.
When it comes to network connectivity, a third of companies (34%) see availability as the biggest challenge, followed by the security aspect (26%) and network stability (20%). In an industry comparison, the challenges are of different importance: retail attaches greater importance to the stability of the network and does not want to experience any interruptions in between, while the healthcare sector sees continuous availability without network failures as the most important factor, while speed is one for the information and communication sector slightly higher relevance.
Digitization is also playing an increasingly important role for companies when choosing a location: After the location and good transport connections, the local Internet infrastructure is also an important criterion for choosing a location. “A stable and powerful communications infrastructure is becoming an increasingly important location factor for companies. With a good supply of broadband Internet, rural regions will also become more attractive for companies again and the emigration of urgently needed specialists can be prevented,” adds Kraus.
Medium-sized companies are increasingly investing in digitization
The corona pandemic has made digital technologies more important in companies. Since the beginning of the pandemic, almost half of all companies have invested in digital technologies such as hardware, software and network connections (47% each). Larger companies invested more frequently in digital technologies than smaller ones. In a sector comparison, the information and communication sector, the health sector, the catering/hotel industry and the production sector invested significantly more – whereas sectors such as trade and service providers still rely on tried and tested methods and made only small investments in digitization.
The majority (78%) of the companies surveyed assume that investment costs in the field of digitization will continue to rise in the next 2 years. 65 percent of increasing investment in software, followed by hardware (48%) and training (40%). “Digitization opens up new economic opportunities. In addition, digital technologies enable new business models, intelligent work and production processes, more effective customer acquisition and better networking. Companies are also assuming that investment costs will increase over the next two years. With our high-performance and future-proof broadband internet offers and our digital solutions for business customers, we at Magenta are a reliable partner for Austrian companies on their way into the digital future,” concludes Werner Kraus.
Digitization in practice: Magenta reference customers show how it works
Parallel to the presentation of the survey results, Magenta is also launching an extensive campaign with four reference customers in order to make potential customers even more aware of their service portfolio.
Magenta Business is a partner for internationally active medium-sized companies and has implemented a communication network for 53 locations in 16 countries with the family company Kapsch. Kapsch is an expert in toll and traffic control systems, digitization partner for cloud and cyber security and operates three of its own data centers. One of them is EarthDATASafe, a high-security data center in a 250 meter deep tunnel. The headquarters of the technology company is in Vienna. At work, more than 6,000 employees rely on an international data network that connects the 53 Kapsch locations in 16 countries – from Chile to Australia. The entire data network was implemented by Magenta Business or local partners within nine months. The ongoing operation of the international network is in the hands of Magenta Business, the servers are located in EarthDATASafe.
The original one-man operation Stihl is now an international company with seven production sites and sales in more than 160 countries. The range includes motorized devices for forestry and agriculture as well as for the garden – digitalization is becoming increasingly important. This is how the iMOW® robotic lawn mower was developed, which uses Magenta Business mobile technology. So that the iMOW® robot lawn mower can be controlled by the customer via an app, it has a built-in communication module and an e-SIM from Magenta Business is soldered into it. Thanks to the roaming contract with Magenta Business, every SIM card works in all contract countries – the iMOW® automatically connects to the best network. STIHL also benefited from the experience of Magenta Business when developing the communication module for the iMOW®.
With the start of the season in July 2021, the Video Assistant Referee (VAR) was used for the first time in a game of the Austrian Football Bundesliga (ÖFBL). The aim of the VAR is to immediately recognize and correct wrong decisions on the field – and thus to ensure more transparency in everyday football. In order to ensure stable and secure transmission of the video signals, the ÖFBL relies on the technological know-how of Magenta Telekom. All 12 stadiums of the current Bundesliga teams were developed by Magenta with a high-performance fiber optic connection (400 Mbits) and networked with the Video Assistant Referee’s headquarters in Vienna. Magenta also takes care of the long-term maintenance and operation of all lines, thus ensuring smooth functionality.