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Changing with the customer

23 Apr 2010
00:00
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CEO Special: With network technology converging toward LTE, how important are speed and coverage as a differentiator today?

Ricky Corker: As we move toward LTE and with the massive rise in mobile data traffic caused by smart devices, we think that peak data rates, while important, are not quite so vital as ensuring a great end-user experience. Rather, it is what you do with the speed (applications, customer insight, etc) and the quality of the end-user experience that will be the real differentiator in the next few years.

Does this mean operators are starting to understand the importance of quality of services and quality of experience?

Yes. Based on our own survey of service providers' trends and key issues, they are starting to realize that the need to drive end-user satisfaction and quality of experience is critical. Whereas in previous years, we would see issues such as subscriber growth and capex reduction being strongly represented, now we are seeing a significant change. Faced with a challenging market environment, differentiation is key.

In a highly competitive market, with speed not the sole driver of customer loyalty, our customers are looking to shift their focus to enabling a seamless user experience over broadband.

Operators will need to continue investing in their networks to address the massive data demands, but unless they address QoS and QoE, they will not drive additional top-line revenue through new services and applications.

What were the main drivers behind your recent reorganization and how has it better aligned NSN for the realities operators now face?

As our customers make purchasing decisions, they want a partner that engages in issues well beyond a traditional discussion of technology. Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner. As our customers change, as their priorities and needs change, so we have to change.

Our new structure with three business units - Network Systems, Business Solutions and Global Services - will position us well in this changing market designed to fit our customers' changing investment patterns.

How are you advising operators to cope with the huge pressure to cost cut and boost network efficiency?

With our customers finding their own profitability under pressure and seeking operational efficiencies in their networks, they are increasingly focusing on differentiating themselves through end-user service quality and branding. Because of this, we are seeing more customers turning to our Global Services operations for quality service. In the last 18 months we have opened up important markets like India, the US, Europe and Latin America in managed services.
Through the use of our Global Services delivery model, service providers can reduce their need to invest in their own infrastructure, facilities and operations. This not only saves money but also accelerate service creation and entry into new markets. Our global economies of scale and offshoring enable the cost-efficient enhancement of local services for temporary events.

A McKinsey study - "Wireless network consolidation/offshoring" - has shown that service delivery models can help mobile players reduce certain network costs by up to 30%.

Network sharing is another area that service providers can consider for operational and network efficiency. Managed energy, in which we provide end-to-end energy solutions targeting efficiencies through solutions for both energy consumption and energy production, is another good option.

Infrastructure technology isn't in the limelight like it was a few years back. Operators' pain points are transformation, rapid new services deployment and future business models. How is NSN engaging customers in these areas?

Because of our intimate understanding of our customers' businesses and strategy, we can advise them on the best course of action in building their infrastructure and give the greatest return on investment. And increasingly, our customers want to lean on our expertise in providing their subscribers with a special customer experience that will increase loyalty, transform their businesses, reduce time to market, and explore innovative business models that provide new sources of revenue and profitability.

Our Business Solutions assets give us a critical competitive advantage. In subscriber database management we have 80 customers in 46 countries and more than one billion subscribers. In NGN voice solutions we have 260 references for mobile softswitching. Our combination of business, telco, IT know-how and assets allows our customers to provide their end-users with the unique individual communications experience they are demanding.

Mobile broadband has been a wake-up call for operators. How are operators dealing wih the resulting network congestion and growing capex requirements?

We predict that by 2015, annual mobile data traffic will reach 23 exabytes - equivalent to 6.3 billion people each downloading a digital book every day. Pure capacity is just one issue, however, as the unique properties of mobility, such as intermittent connectivity and shifting location, coupled with the increasing use of smart devices, require mobile broadband networks to be far more intelligent in their handling of traffic growth.

To that end, we have built into our networks an industry standard that allows an operator to reduce unprofitable, congestion-causing signaling by three times while increasing smart device battery life. Our radio network controllers support three to 63 times more smartphones than our competitors. The Flexi Network Gateway, part of our evolved packet core portfolio, leads the industry in subscriber sessions, data throughput, intelligence service support and signaling.

We are advising customers to consider more efficient energy solutions, since base station sites consume 80% to 90% of the energy in a mobile network.

As mentioned previously, network sharing is another solution for service providers to consider, especially in hotspots, where they must add new radio resources. For rural areas with spare capacity, operators can consider pooling their network resources through network sharing.
 

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