Nokia Siemens Networks (NSN), formed over two years ago as a result of the partnership between Finnish wireless communications specialist Nokia and Germany-based fixed line major Siemens, has been performing strongly and better than most of its competitors. India, with over 400 million wireless subscribers and the impending launch of 3G services, is a key focus area for the company. Having won some of the largest expansion orders from major telecom operators like Bharti Airtel, Vodafone Essar and Idea Cellular, NSN is keeping very busy in India. Simon Beresford-Wylie, chief executive officer (CEO), NSN, speaks to tele.net about the company’s road map in India, future challenges as well as the impact of the financial crisis…
How important is the Indian telecom market for NSN?
I think that there is no doubt regarding India’s contribution in the company’s global success. There are three key reasons for this. First, NSN is currently no longer just a telecom equipment vendor, but more of an overall business operations partner for communications service providers. Our global services business has been driving this change, and India is at the heart of this business.
Second, in addition to the transformational role of services, is the potential of the Indian telecom market. We expect a hundredfold growth in global network traffic over the next few years, and much of this will come from emerging and developing markets led by India and China. The influence of telecommunications is being felt well beyond the sector. Telecom has been both a driver and beneficiary in the virtuous circle of economic success that India has experienced in recent years. The market in the country is expected to grow even through the global downturn. Many industry experts point to the fact that India is one of the fastest growing telecom markets in the world. So, it obviously holds a tremendous potential for NSN.
Third, India, in account of the research and development (R&D) and manufacturing facilities we have here, plays a key role in product innovation and development for the company.
We are committed to support the future growth of the Indian telecom industry. This is evident through our announcement in 2008 that NSN would invest $100 million in its Indian operations by the end of year 2011.
The company currently has widespread operations in India, which include presence in over 170 locations, two manufacturing facilities, a development centre and two global network solution centres (GNSCs). NSN is well on track to meeting its commitments to the India market.
Over the next few years, I expect to see a more robust and truly national telecom infrastructure emerge in India, which will deliver ubiquitous cost-effective connectivity to its citizens and to businesses. The country’s telecom growth rate will drive innovation in product and technology development, benefiting not only the domestic market but other economies around the world as well.
How has the company performed over the past one year in terms of revenue growth and market share?
We have executed our business transformation plan well since we became Nokia Siemens Networks in April 2007. I am pleased with the progress so far, but we still have plenty of work to do. Our financial reporting is consolidated into Nokia.The latest details on our revenue will be available when Nokia announces the results for the second quarter of 2009, which is expected soon.
There are six new operators in the Indian telecom market. How do you perceive this opportunity? How much business are you expecting to get from these players?
I think this is a great development for consumers and business in India. Competition is vital to drive innovative services at an affordable price. In a market which has strong and healthy competition, the customers is the one who wins. The opportunity for NSN too is significant, though it is not limited to this.
With existing operators witnessing tremendous growth and entering new, uncharted territories, India’s hypergrowth market and all its segments ?? wireless, wireline or broadband ?? will see big investments from both the existing and new players. I am not going to predict specific growth figures, but it would be fair to say that we will be playing a very active role in this new business opportunity.
What level of investments are you looking at over the next two to three years in India?
Last year we committed an investment of $100 million in India over the next three years to further strengthen our local operations including functions such as sales and marketing, manufacturing, R&D and services. The investment includes setting up a manufacturing facility in Tamil Nadu for wireless network equipment, new offices in various cities, additional development of the existing R&D centre, and establishment of a services hub as part of the NSN-wide strategy to transform and strengthen its presence in new growth markets. We recently set up a new GNSC in Noida, which complements the GNSCs in Chennai and Lisbon, Portugal.
What is the road ahead for the company?What are the thrust ares?
We aim to allow communications service providers to thrive, even in challenging times, and drive the industry’s growth.
Founded on three industry priorities, we are specifically focused on defending and enhancing operator revenues and driving profitability in today’s changing and sometimes turbulent markets.
We will contribute to improving the telecom experience for the people ?? what we call the “end-user experience” ?? by helping operators focus on five key drivers:
The current economic climate has led to an urgent need for operators to focus on profitability and undertake smart growth. We will help the operators to achieve this by enabling greater efficiency through our products and software, accompanied by managed services and network operations for the operators. We are already one of the leaders in this space in India, and our GNSCs are a foundation which we aim to build upon.
Finally, we will do whatever it takes to reduce the environmental impact of the telecom industry, and support the sustainable growth and development of our customers. The company has not just the capability ?? the technologies, products and services ?? that can help us achieve these objectives, but also the extensive, international experience it takes to achieve these goals.
What has been the impact of the economic crisis on NSN?
We believe that NSN is well positioned to weather the current global economic storm. Given the expectations for our industry, we will continue to manage the business prudently. We see opportunities as well as challenges. Globally, traffic and subscriber growth continue to be strong, so capacity and coverage expansions are well justified and many of these investments are expected to continue. We also expect increased interest in operational efficiency (for example, process simplification and automation) and consulting and outsourcing solutions.
What is currently the company’s single biggest challenge?
The single biggest challenge for our customers and our industry is that while information sharing is exploding ?? we expect mobile traffic to grow by 300 times and fixed traffic by 100 times by 2015 ?? revenues for operators are not expected to increase by as much. That is the challenge we are focused upon.
