Nokia Siemens Networks’ audacious $975 million acquisition of Motorola’s wireless network assets in April last year was followed by numerous disposals. While the sale of various business divisions gave many people the impression of a company in retreat, the deals were in fact part of a well-considered plan to focus the business on mobile broadband products and services.
Igor Leprince, who leads NSN’s operations in the Middle East, an area that includes much of North Africa and Pakistan, believes that the strategy was a sound move and that other vendors may be forced to follow suit.
“The focus and the new strategy that we have developed, which we believe is very bold, is a strategy that we think a lot of other vendors will follow. The strategy is really to focus on mobile broadband – radio, core and optical – all the parts that matter in mobile broadband including customer experience management and the services related to it.
“We believe that the time for equipment suppliers to be everything for everyone is long gone,” he adds. “We don’t believe our customers really want that, a one-stop-shop, and we don’t believe this is viable for any companies to do.”
By focusing its efforts on mobile broadband, Leprince says that NSN also intends to focus “extremely strongly” on innovation and quality. “We want these areas to become differentiators. We want our customers to talk about NSN as the number-one on innovation and in quality,” he says.
A key part of NSN’s mobile broadband offering involves managed services, which now accounts for about 50% of the business, according to Leprince. Towards the end of the year, the vendor will invest further in this side of the business, with plans in place to expand its global delivery centres or GNOCs.
NSN currently manages networks of behalf of operators that cater to more than 300 million people around the world. “We see that developing. That is an area where we are putting a lot of investment in tools, processes and people to be able to manage these networks remotely,” Leprince says.
“We have three key centres in Chennai, Delhi and Lisbon. That is called our Global Network Operation Centre. We also have others in Latin America, Russia, and another couple of GNOCs planned.”
At present, NSN does not run any of its Middle East operator customers’ networks from any of it GNOCs. “It is a bit of a delicate issue sometimes in terms of security and having the data outside the countries,” Leprince says. “We do some small remote work for some of the countries but it is not a market that has developed the outsourcing and global delivery model as much as other markets. It is still at a very early stage.”
However, he believes that this will change in the coming years, not least because some of the region’s operators could benefit from such as move. “If you think about these markets they have big groups that have big multiple operations around the world and there are significant benefits for them to go into that. If you think about Etisalat, Qtel, Zain, they have multiple operations. This concept will come on the table in the next couple of years,” he says.
In terms of the benefits of running operators’ networks from GNOCs, Leprince says that there are major efficiency savings available for operators, particularly those with multiple operations across more than one region. “Clearly from these global operation centres we have sets of tools, processes, experience, scale that help them significantly. It is very difficult when there are new technologies to always scale up your tools, processes, tech and people. That is one of the big benefits. More and more operators see the benefit, especially operators that have got group or different operations around the world,” he says.
While telcos in the region have not yet embraced remote outsourcing, they are increasingly moving towards regular outsourcing, with vendors running the networks on their behalf. For example, Leprince says that NSN conducts managed services for most of its customers in Saudi Arabia.
Furthermore, he says that operator attitudes to outsourcing are changing. “There is more trust. There is also much more experience than five years ago on our side. A lot of operators see the benefit of this trend.”