Nokia unwraps its new directionBy Ryan Noik 25 August 2015 | Categories: news
It’s no secret that Nokia has been undergoing some major shifts in the last year and a half, with its relationship with Microsoft, the sale of its HERE mapping business while still managing to show tech enthusiasts that it is still innovative in its own right. In a detailed Q&A with Deon Geyser, Head of Southern Africa and Vodafone Market Unit, Nokia Networks, he explains Nokia’s directions and how the company has changed its focus.
TS: What is meant by the term “new Nokia.” Would it be fair to say the company is reinventing itself? If so, how?
DG: Nokia divested its handset business to Microsoft in early 2014. The new Nokia is currently focusing on three strong businesses – Nokia Networks, HERE, and Nokia Technologies. Nokia Networks (which was formerly known as NSN) is the largest business in the new Nokia setup.
In April 2015, Nokia announced a review of strategic options for HERE in light of its proposed combination with Alcatel-Lucent. Accordingly it recently announced an agreement to sell its HERE digital mapping and location services business to a consortium of leading automotive companies. The announcement of this sale to the consortium concludes that strategic review process. Upon closing of the HERE transaction, Nokia will consist of two strong businesses: Nokia Networks and Nokia Technologies.
Nokia Networks provides broadband infrastructure, software and services, and operates at the forefront of our industry. From the first ever call on GSM to the first call on LTE, we have set the pace of innovation, a record that continues with future technologies such as 5G.
Nokia is truly reinventing itself. The company is celebrating its 150th anniversary this year, and invention and reinvention has been the biggest driving force for its success as a technology leader for one-and-half centuries. It has a long history of successful change and innovation, adapting to shifts in markets and technologies. From its humble beginning with one paper mill, the company established itself in many sectors over time including cables, paper products, tires, rubber boots, consumer and industrial electronics, plastics, chemicals, telecommunications infrastructure and more.
By 1998, Nokia was the world leader in mobile phones, a position it enjoyed for more than a decade. In 2007, Nokia combined its telecoms infrastructure operations with those of Siemens to form a joint venture named Nokia Siemens Networks (NSN). NSN became a leading global provider of telecommunications infrastructure. In 2013, Nokia moved to make two transformative transactions – buying Siemens’ stake in NSN and announcing the sale of all of Nokia’s Devices and Services business to Microsoft. Following the closing of the devices business transaction in 2014, Nokia announced its new vision and strategy, building on its three strong businesses - Nokia Networks, HERE, and Nokia Technologies. New Nokia’s vision is to expand the human possibilities of technology.
TS: What is Nokia Network’s focus moving forward, and what do you believe are some of the key opportunities?
DG: Nokia Networks’ long term strategic directions are to lead, reposition, disrupt, and extend.
Radio Leadership: Nokia Networks wants to continue to be one of the top 3 vendors in radio, and be very focused on LTE where we want to achieve 25% market share, including #1 position in TD-LTE outside China. We want to be become leader in 5G, set to become a key technology to connect billions of devices in the programmable world. We also want to use our LTE capabilities to target new segment such as LTE-based public safety solutions.
Reposition and out-innovate in Services: Nokia Networks wants to be #1 in network implementation, get the best out of care business, and increase our focus in Professional Services, where we see huge growth potential.
Disrupt: We want to seize opportunities from disruption driven by telco cloud and software-defined networking.
Extend: Nokia Networks wants to make new entries into analytics and the Internet of Things. Two of the main pain points of our customers are how to reduce churn and how to generate new revenues. Nokia Networks CEM portfolio addresses the churn problem quite well.
Internet of things: We know that, along with virtually every person on the planet, billions of things will also be connected – to us, or to each other – by 2020. Nokia Networks will use this growth opportunity to become a significant player in enabling the programmable world.
From a local market perspective the key opportunities are driven by spectrum opportunities opening up for operators, and consolidation activities in the local market. Over and above that, mobile penetration, and especially data services penetration rates in Africa are still very low. These also lead to new entrants, different business models including public and private partnerships and sharing activities between operators to jointly address some of these challenges. Of these provide new opportunities in the African market for our product and services portfolios.
We also see more and more operators focusing on customer experience management, and this is where Nokia Networks has world-leading technology to address this challenge, and help operators have an End to End customer experience view in real time. These help operators increase revenues and reduce churn.
TS: Can you provide insights into how Nokia Networks plans to work with operators to contribute towards technological advancement and growth? What kind of advancement and growth specifically do you envision being able to achieve?
DG: There are several technology advancements and evolutions taking place in the local market. These are driven by global technology trends, OTT players, spectrum opportunities and competitive opportunities and risks. Therefore we are working with the different operators across the regional market with building and implementing strategies and technologies for:
· introducing new voice services such as Voice over LTE (VoLTE), Voice over WiFi (VoWiFi) and high definition voice (HD voice)
· technology partnership models between operators and OTT players
· cloud evolution strategies, and a cloud evolution path across operators’ networks to provide future network investment protection
· Self Optimising networks and self healing networks,
· How to use analytics and existing network data points to effectively plan and profile capacity growth areas, and using analytics and data probing correlation to build on their Customer Experience management strategies.
· Network densification and in-building capacity strategies with our world leading small cell technology
· Different technology sharing strategies. More and more we see 4G services offering operators new opportunities for sharing and we seen an increase in these business models.
TS: With regards to the Nokia Technologies division, can you elaborate on what users can expect to look forward to coming from its stable in the months to come?
DG: Nokia Technology is Nokia’s advanced technology and licensing business. Its primary activities are patent licensing, brand licensing, and the exploration of new technologies for both licensing and our own potential products. At present Nokia Technologies is not in the consumer business directly. Nokia has no plans to return to the direct manufacturing and sale of handsets. We are looking for a suitable brand-licensing partner who can take on the heavy lifting of making and selling handsets. If found, we will provide the industrial design expertise and technology differentiation along with the Nokia brand. The soonest a Nokia branded smartphone can come to market is Q4 2016, pursuant to our agreement with Microsoft.
TS: There was quite a bit of excitement following the OZO virtual reality camera announced by Nokia recently. What is your view on the virtual reality market and its potential?
DG: As an end-to-end solution, OZO aims to set a new standard as the preferred method for professional capture, editing and playback of cinematic VR content. It will provide filmmakers with tools and techniques that fuel their creative process, unlocking the true potential of their vision.
TS: The OZO announcement also begged the question whether we can expect to see more of an industry focus for products to come from Nokia. Is this the case, or would Nokia still aim to have a broad focus on consumers as well with these kinds of innovative products?
DG: As already mentioned, Nokia’s vision is to expand the human possibilities of technology through its business divisions. Nokia Technology’s primary activities are patent licensing, brand licensing, and the exploration of new technologies for both licensing and our own potential products.
TS: What is your vision for Nokia, and what is your outlook on the mobile market locally and then globally in particular (ie optimistic, guarded or negative)?
DG: New Nokia Vision: At the Capital Markets Day in London on Nov 14, 2014, we outlined our vision: to expand the human possibilities of technology. The company’s strategic pillars now are: to accelerate leadership in radio; to grow Professional Services; to win in technology transition to Telco Cloud; and target opportunities in Internet of Things and data analytics.
The company has strategies in place for each business, which have been aligned around a common vision for Nokia. That vision is all about connecting things as well as people; billions of sensors are coming online to create the Programmable World. Nokia technology is grounded in real life. It is pragmatic in its application of technology to serve people. Its innovation focuses on meeting real human need, using technology to positively impact people’s lives each day.
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