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.