Nokia: “We See Big Opportunity in Web Scale Players”


As telecom operators are cementing their strategy to bring transformation inside their network infrastructure – Nokia is right at the helm of this bid for transformation. Being a global innovator for networks – the company is set to bring huge amount of value not only for telecoms but also for the enterprise and utility sectors.

Amit Marwah, Head of Sales, End to End Solutions, Nokia interacts with Zia Askari from about the way Nokia is helping organizations embrace the digital agility and keep pace with next generation technological edge.

What are the key priorities that Nokia has keeping in mind the whole trend of digital transformation today?

It’s a good question because we have very recently come out with a new refresh strategy for the next three to five years. In that refresh strategy we have these four or five key pillars. One is lead, the other is expand, the third is grow in software and the fourth is how to use techno and I’ll explain briefly about each.

After the Alcatel merger into Nokia, we are now one of the only vendors who has vast end-to-end portfolio which runs across not only the mobility part but also the fixed and IP and the optical.

Both the companies have brought in very good strengths on analytics and applications and cloud. So from overall perspective now we are complete in a portfolio. The biggest thing that we were striving for was to how to leverage this portfolio and try to create solutions which are end-to-end and can run across sectors.

Our new strategy is built around that. Something that we are trying to do which is very refreshed and very bold is we are saying that we will continue to lead in the areas that are our strength which is the operator business which is the mobile.

We will continue to take a leadership position there but what we will also try to do is expand into adjacent market because what we see is that globally the CAPEX spent and the growth of the so called operator telecom market is becoming flatish or 1% to 2% kind of growth.

Keeping that in mind, so you can decide to be where you are and comfortable and not grow. But if you want to start growing the company then you have to start looking at how you can get into adjacent markets and there are certain areas where we now have portfolio that fits very well.

The adjacent for us are energy sector, transportation sector, enterprise sector and the public sector. So that’s a key pillar that we have taken on us in terms of growing our business in the future.

The other opportunity we see are the web scale players. The Facebook, Google’s of the world are becoming more relevant from a connectivity point of view also and it’s just a matter of time they will also play a role in this whole ecosystem, so the question is how we can leverage.

We have got now our own data center solutions, we’ve got our own security solutions, we’ve got our IP and optical solution which fits in also very well in their requirement. So how we can leverage that and try to be able to address this particular market. This is another very important factor.

Then the third thing that we are trying to do is that how we can look at software becoming more relevant and I’ll give you a very simple example like you have cloud solutions, software is important in that or even very simple things like you have the OSS, BSS solution.

Now you do billing in charging and network management for the network piece but there are so many other industries which also require billing and charging and will require network management. Why can’t we enhance this software and adapt it in such a way that it can be used in those adjacent markets? Fixed industry also require billing, Nokia has an opportunity here. When we talk about the adjacent markets, we are looking very aggressively on how the digital transformation in the world is going to happen. How IoT is going to play a role and what can Nokia do. Nokia wants to be the leader player in the transformation to cloud.

Moving forward the whole operator game is going to change and it is going to be only about applications. So what is your opinion on this futuristic thought?

I think nobody debates that networks are going to transform the future. Everything over a period of time will move to higher technologies 4G and beyond. Number two, data will become significantly important.

So where I’d not fully agree is that from a data point of view whether the operators will be sit back and say that they are happy to be dump bytes and somebody else takes the cake away. Some of the very progressive operators are already taking steps and they are conscious of this fact that they do not want to be dump bytes.

Now how they can leverage this in order to be able to do something different and monetize the data. Facebooks of the world, the WhatsApps of the world, the big application providers, are not eating all the cake. They are the ones who are enabling everyone to sell more data. If they were not there, people would not get aware of what is data and how to use it and enabling usage of smartphones and applications.

Some do question around that application providers are eating the voice revenue or they are monetizing through their advertising. But this is an opportunity for operators and requires a strategic change in the thinking of the operator as to how can they collaborate with them and grow the share of the pie.

So what are some of the innovations that in such a scenario operators can think of?

With a situation of instance conventional voice revenue going down, there is an opportunity for the operators to offer Voice over LTE. Operators in India have now started seriously considering providing voice over LTE and is already in the process of getting rolled out.

So what does voice over LTE do compared to let’s say voice over wi-fi? It is much, much more spectrally efficient. So it gives you the efficiency. It gives you a simplification in the network because on the same network you are able to do data and voice at the same time and you require a much less complicated network.

It gives you a far, far enhanced experience on the voice quality and it opens the door for you in order to be able to do more than voice. There is a study which shows that compared to amount of spectrum of used over 2G voice is 15% more when compared to Voice over LTE for an equivalent amount of time. Voice over wi-fi or other platforms are best efforts. With Voice over LTE you will experience high quality of voice and one is amazed with the experience.

When customers will get used to the quality of voice over LTE they will expect it every time. Then why would anybody use a WhatsApp voice if you get much better experience and you are paying the same data? One consumes much less data over a VoLTE call. Call set up time over LTE is three times faster than over a conventional call.

Now on the cloud side, what is your opinion on the telecom operators’ will to look at cloud as aggressively as an enterprise would look at today and what is that Nokia is offering on the cloud for operators?

May be I disagree in some sense that they’re not looking at it very aggressively. Everybody is looking and now if you compare to IT, what happened in IT. You had very little legacy. You were already a server-based kind of system. You already had that concept of data centers. So there was little evolution. In the telecom world, it has evolved over a period of time.

When it is evolved over a period of time, a large amount of billions of dollars of investment has been made on the existing infrastructure. Everybody understands and knows that cloud is the next way to go. It has built in efficiency, it is the OpEx that you save; it will have much more capacity, it will give you infinite storage and compute power and then cloud is also moving to open source.

So tomorrow you will have the flexibility also of having somebody else’s application, somebody else because it’s going to be an open platform. So everybody understands this very, very clearly and everybody acknowledges that this is the right way to go. You have to be cautious of the fact that you cannot throw away the investment and so you have to do it in a phased approach.

My view would be that if I was sitting on the operators’ side, what I would do is I would say that okay if there is a new technology that I am introducing let’s VoLTE for instance. It’s something new that I am doing. There is a new element that I am bringing which is the IMS in the network. Why should I take this in the older kind of network formation, right? Why should I not take it on cloud and that’s exactly what they are doing

The other thing is when they are talking about platforms for analytics, the new thing that they are going to be doing on Internet of Things which is another area which is going to expand exponentially so when you do that you need a platform in order to connect these billions of devices.

You need platforms in order to manage these devices. When you are investing in those platforms going forward why should I not invest in cloud technology.

Nokia is ready from an NFV and from an SDN perspective, we are ready with most of our solutions and are already available on cloud – right from radio to core. The only thing is that the uptake of that depending on market to market will happen in a phased manner. So if I am selling an IMS today, I will definitely sell it on cloud. If I am selling in HSS, I am selling it on a cloud architecture.

When I am selling an analytics and application solution, that is on the cloud platform because these are new elements which are getting added into the network and then it becomes very simple because you’ve invested in the infrastructure, now you have almost like a data center or a mini data center which is available. Hardware and software is getting delinked, now on the same hardware you keep adding servers, you make it into a bigger cloud and then you start moving slowly in the other application which are new in the network.

There is a lot of focus and lot of discussion going around on how to evolve the networks in three to five years.

Now tell us something about the key trends that you see going to be most relevant for operators in the coming years starting from 2017 tends around you mentioned IoT, trends around smart city, trends around digital transformation and what role will Nokia play in each of these trends?

I would say one of the biggest things from a network point of view, from a trend point of view would be how to move to the cloud which is we’ve already discussed. The other important thing I see happening in the future is as and when this data consumption starts increasing, as and when technologies of like 4G get deeply penetrated and people experience that high capacities and availability of data, there needs to be a transformation in the IP and optical network because you need to have enough pipes to carry it back.

So there needs to be a transformation around the IP and optical which will be the next phase of the transformation of the networks. The other thing that seriously needs to be done and will be done in the next coming years, will be a lot of focus on analytics, automation and customer experience because I think everybody and the operators have realized that they are sitting on a gold mine of data but they are not able to use it like the Facebooks and the Googles of the world use it.

Operators can use that data for themselves in order to make the networks more efficient, in order to target customers more efficiently, in order to be able to monetize all their services and sell them in an alternate market. IoT will play an important role in digitalization and making smart cities a reality.

Operators are now looking at how we can partner it more efficiently because they are the connectivity partners. So they have the connection, they have 2G, 3G, 4G and depending on what kind of IoT application, you might need. For all IoT applications you don’t always require a 4G network but then there are networks or applications which will require very low latency.

So a combination of IoT solutions can be provided by the operators by partnering with various solutions providers as they have the connectivity piece. You have already inbuilt SIM cards in that which are running over LTE technology which is running in a close environment.

So moving forward what are some of the growth areas that Nokia is looking at? You mentioned the shift that is there for the industries and utilities and so on and so forth.

So we have now created a separate vertical in the company which is looking at how to address this adjacent market and in those adjacent markets there are four growth areas that we have identified. Power and energy, the other is into the transportation, connected cars for instance. The third is to leverage how we can get into this enterprise vertical and the fourth is medical.

So, how we can get into medical connectivity. We recently bought a company called Withings, Nokia. Withings is a company which is making these health wearables and not only health wearables but they are also making the entire portfolio of products and solutions such as smart weighing machines, they have blood pressure sensors, they have thermometers and all of them are connected.

You have smart watches, bands, you have all those things and now we are trying to see how we can leverage that acquisition in order to integrate it with our solution and say how we can provide better than what is available which at best can count number of steps which if you ask me is not that important.

The real value of wearables or medical health comes when there is an ecosystem sitting in the back where your blood pressure goes up and somebody else gets an alarm and calls you and says that you need to go for a checkup or you need to change your medications. If you create that whole ecosystem and turn it around and lock it together that is where the value is.

Our CEO always says that one of the key lines of our strategy is to expand the human possibilities of the connected world. He always says that all of us should stop thinking about that how many boxes we have sold or how many people we have truly connected.

Now, you start thinking on how you are improving lives. How you are saving one hour of a day of a person from whatever he is doing by use of technology and if you start thinking in that sense, then you automatically start innovating and you become passionate about what you’re doing and you move to the next step. So that is, you know, it’s not unleashing but it’s creating the human possibilities or something is that punch line of our strategy recently.

Talking about India specifically and globally I think Nokia is playing a very important role on critical communication. So how do you look at those segments opening up in India and Nokia playing an important role there?

Yeah, so I think you’ve very, very valid point. I think with all this transformation; two things are going to become extremely important in the world. Number one is to create secure network because from your identity to the points in between the network which are vulnerable for attack, you become much more exposed. So how you can lock it up with security around it and the other is that how you can use technology to create a better public safety environment and we have done a lot of work in Dubai. We have done work in Europe. Now the challenge in India so far is that we don’t have a dedicated spectrum which is allocated for public safety and that becomes the base point.

Now if an operator wants to do public safety and he says that okay now there were tetra systems or whatever and now LTE has come, so let me establish a police network which is on the higher technology and say that instead of the old walky-talky kind of thing…and there what you can do is you don’t have to only do voice now because LTE enables you to do video.

So you could have a fireman walking inside a building and having this device which is running on LTE and actually being able to see what is there so that you can attack and you can try to…so those things are getting enabled now. For that, either one of the operators who has the spectrum wants to create a business case out of it which is possible.

We are trying to advocate to the stakeholders the importance of public safety and especially use of LTE for it. With the whole security issue around the world these are going to become very important aspects of monitoring, surveillance plus communication for public safety. At Nokia we are trying to share our experience and expertise in making the stakeholders aware how other countries are adopting technology and solutions around by sharing examples and how India should adopt. I am optimistic that in the near term some things will move.

Now tell us something about the key challenges that you see in front of the industry specifically the telecom industry today and how can those challenges be turned into opportunities?

I think from a challenge point of view, one of the things that I see is that we have a huge amount of dependence on the mobile device penetration, right. So one of the things that the operators will have to continue to do is to retain a 2G, and a 3G and a 4G layer for a long time because the device ecosystem is split and it will continue to remain split.

The other thing I see from a data monetization perspective. And third is consolidation. Now the consolidation itself of the industry which has already happened, creates a lot of complexity in it.

Another challenge which can turn into opportunity is this whole migration into IoT, digitalization and how operators can or the whole industry can benefit from this and leverage something in order to be able to make it into a business.

When do we see 5G coming to India? We keep hearing demo, stories coming in from primarily the European markets, so when can we have a story from India?

Yes, it can be done. We’re already trying to set up something. So we have our own development center in Bangalore where we are trying to establish a 5G experience center.

So it does have some 5G R&D there itself. So that would be the first step in which we will try to connect up with some 5G infrastructure which is somewhere else and then try to be able to give that hopefully next year and then we hope to be able to do some kind of initial trial with one of the operators or few of the operators in India. We’ll try to see in next year something that we would like to do in 5G in India.