Given the growth in data services, Nokia Networks intends to focus on enabling operators to roll out new technologies and adopt solutions such as cloud, big data and analytics. Sandeep Girotra, vice-president and head of market, India, Nokia Networks, talks about the Indian telecom equipment industry, the challenges faced by operators and the company’s performance and future plans. Excerpts… 

How has the telecom equipment industry evolved in the past few years? What are the new technology trends globally?

The global telecom equipment industry is witnessing a revolution. The period until 2000 was all about establishing voice networks, mostly on GSM radio access technology. In India, 1995 to 2004 was a period of moderate growth in subscriber numbers and voice telephony, and the period 2004 to 2010 was an era of high growth.

Mid-2000 onwards, globally, data became the centre point of the mobile revolution. In India, mobile data, after a period of lull between 2010 and 2013, is seeing tremendous growth. This has created a fundamental shift in network architecture and mobile networks are becoming increasingly software centric with the underlying layer being IP enabled. This is driven by the introduction of 3G, long term evolution (LTE) and LTE-Advanced technologies.

Nokia is currently focusing on the opportunities of the Programmable World – a world in which nearly all people and billions of devices are connected; where software holds all those connections together; and where analytics and automation bring simplicity and efficiency. By 2025, we would have 50 billion connected things in the form of devices, modules and sensors.

What are the challenges being faced by operators in the data space with the growing uptake of high speed broadband services?

Operators are facing three key challenges:

Capacity

• This is an issue in several areas in the metros. According to operators, 3G data usage has far exceeded what operators had planned for and what spectrum availability allows in many locations.
• Consumers are demanding better upload and download speeds and operators are realising that it is time to move to LTE/4G technology. In addition, there is now more demand for LTE equipment.

Coverage

• In the next two to three years, 3G will be the key driver for data services.
• There has been a significant improvement in 3G coverage and with the increasing smartphone penetration, India has the capacity to grow further.
• To provide a seamless data experience, operators need pan-Indian 3G coverage.
• There is an increased impetus from operators for 3G expansion.

Monetisation

• Experience from around the world shows that whenever a new technology is introduced, operators struggle to monetise it.
• With ubiquitous 3G and selective LTE coverage, operators will start looking at monetising data, addressing over-the-top challenges, which can be addressed through Nokia’s solutions such as customer experience management, predictive operations and service management, etc.
• Operators will also need to relook at the managed services model. Earlier, managed services focused on reducing opex. Now they also need to be customer (subscriber) centric. They need to manage the customer service experience, not just the network parameters.

Where does Nokia Networks stand vis-à-vis its competitors?

Nokia Networks, which provides broadband infrastructure, software and services, operates at the forefront of the telecom industry. From the first-ever call on the GSM network to the first call on the LTE network, the company has been at the forefront of innovation. Together with our operator customers, who serve about 5 billion subscribers, we are embracing the opportunity of the connected world and helping resolve its challenges. In India, Nokia Networks is the market leader in the managed services and mobile broadband infrastructure segments. The com-pany has unparalleled scale in India, with large-scale manufacturing supporting the government’s Make in India programme, research and development (R&D) initiatives and unique global delivery centres.

How has the company performed over the past few years in the Indian as well as international markets? What are the key telecom markets for Nokia Networks currently?

The period from 2014 to the first half of 2015 was a time of significant change at Nokia, with the company registering strong revenue growth, and high profitability and net cash.

Apart from India, the key telecom markets for Nokia Networks include Finland, the US, Japan, China, Russia, Germany, Taiwan, Indonesia and Italy.

In India, Nokia Networks has performed well in the past few years. The company has a very strong customer-perceived value, high employee engagement and strong financial position. Further, it witnessed a healthy full-year growth in 2014 after a gap of several years due to market conditions. In addition, Nokia is deeply entrenched in the development of ecosystems and societies in India. The company’s CSR initiatives focusing on disaster recovery and resilience building, education, and environmental protection are touching the lives of thousands in India. Its R&D personnel in Bengaluru are not only filing a large number of international patents from India but also engaging with top-tier educational institutes like IISc and several others.

Which are some of the key contracts signed by Nokia Networks recently in India?

Nokia has consolidated its market position in India. The company secured several deals including Vodafone India’s multi-year pan-Indian (19 circles) single RAN deal entailing modernisation of 2G/3G networks; Bharti Airtel’s 3G deal for three circles; Tata DOCOMO’s 3G deal; Bharti Airtel’s LTE-frequency division duplex deal for six circles, and expansion of LTE-time division duplex deal in two circles; Bharti Airtel’s four-year 3G deal for five new circles and two existing circles.

What proportion of the company’s global revenues is contributed by its Indian oper-ations? What are your targets for 2015-16?

Nokia Networks does not comment on India’s contribution to its global revenue. India remains one of the strategic markets for Nokia Networks globally, with a strong focus on sales and delivery to telecom operators in the country as well as on manufacturing, R&D and global service delivery. Further, India has the company’s largest employee base, with close to 20 per cent of our global employees being based here.

In your opinion, how has the policy and regulatory environment in the telecom space evolved over the past one and a half years?

The regulatory overhang in telecom in India has certainly cleared up in the past year and a half. The February 2014 and March 2015 spectrum auctions have paved the way for investments in mobile broadband. However, there are still several areas that need to be looked into, including right of way for tower installations, a spectrum availability roadmap, spectrum harmonisation, spectrum trading and sharing policies as well as clarification on merger and acquisition guidelines.

What is your view on the Digital India initiative? What role can a company like Nokia Networks play in this initiative?

Nokia Networks is very excited about the government’s “Digital India” initiative. For a truly digital India, the government must focus on paving the way for a ubiquitous, high quality broadband infrastructure backbone and integrating the right technology so as to accelerate the delivery of services that create a more connected society.

3G and LTE technology roll-outs will help significantly in achieving the objectives of the Digital India initiative. As the majority of people in India do not have access to fixed broadband services, access to the internet is largely dependent on mobile broadband. High quality broadband delivered through 3G/4G technologies is the best and most efficient way of providing internet access to Indian citizens, along with benefits such as e-governance, m-health and mobile banking. In order to realise the vision of Digital India, the government needs to expedite the execution of the National Optical Fibre Network project, ensure spectrum availability, ease equipment manufacturing through a better electronic component ecosystem, and develop a strong pipeline of talent through structured skill development plans.

What are the key thrust areas for Nokia Networks in India? What are the company’s short-term and long-term growth plans?

Nokia’s MBit report highlighted that India’s mobile data traffic almost doubled in 2014. As per publicly available reports of several operators in the country, the trend continues to be strong in 2015. In this market, we will maintain the focus on 3G, LTE/4G technology adoption through early roll-outs, drive new technologies like cloud, self-optimisation networks and big data and analytics as well as on the ongoing evolution of managed services into predictive and subscriber-centric service management.

What will be the five key technology trends that will dominate the global telecom market over the next five years?

There are going to be five key technology trends in the industry during the next few years – cloud, the Internet of Things, evolution to ultra dense networks, smart location experiences, and big data and analytics.

• Telco cloud: Telco cloud is being transferred from the lab to live networks of many leading operators. With technologies like network functions virtualisation and software-defined networking being introduced, Nokia Networks is extending its portfolio and partner ecosystem to jointly define the standards needed.
• Internet-of-Things: The next market growth curve will be fuelled by connected devices and sensors, particularly in application areas such as automotive, homes, cities and energy.
• Evolution to ultra-dense networks: To meet the growing data demand, thousand times more capacity will be needed by 2020. Nokia is helping operators plan ahead to maximise asset utilisation and achieve 10x10x10 increases in the number of cells, spectrum use and network efficiency.
• Smart location experience: The mobile network, our interests and our location at any given moment provide key information for matching where we are with what we like to do.
• Big data and analytics: Big data and analytics capabilities make it possible to measure and analyse millions of data points generated by networks and subscribers. Nokia combines analytics and automation to help operators take relevant action and achieve a measurable outcome based on insights from these data points.