After selling its struggling mobile phone business to Microsoft for about 5.4 billion euros ($7.4 billion) in April, Nokia is now looking for new challenges. The company, with Rajeev Suri as new CEO and president, is now operating three main businesses: Nokia Networks, which makes equipment and provides services for telecoms operator; the ‘HERE’ mapping software business, and a patents unit.
Igor Leprince, head of Middle East and Africa region, Networks, at Nokia Networks forecasts a significant growth for the company in the coming years in the MEA region. “It (MEA market) is very exciting because of the strong opportunity to grow. It is unbelievable how much mobile broadband development has to be done in this region,” states Leprince.
“We have a strong presence in Saudi, Qatar, UAE and Kuwait. Those are the first countries in which we are focusing,” he stated.
Nokia Networks will mainly follow its core markets, but the company is open to new opportunities. Iraq, Pakistan and Lebanon have an important broadband transition that will bring more opportunities to Nokia Networks, Leprince said.
In Africa, LTE needs to be developed in North Africa. “There are many interesting developments in Africa. For example, Libya is not going to LTE but there is not broadband at all,” Leprince added, as the company started to build up the infrastructure in January 2014. “Kenya and Nigeria are two markets that are very interesting for us and also South Africa and Tanzania.”
Leprince said that the company also wants to grow its presence in Angola and Zimbabwe.
During the first quarter of the year, Mobile Broadband, and specifically Radio business grew quickly at Nokia. The core business was LTE, and the Small Cells business was starting to grow. During the first months of the year, the company signed 138 commercial LTE deals around the world, a figure that continues growing for the company.
The company reported net profit of $170 million for the first quarter of 2014 on account of improved profitability. However, net sales of Nokia Netowrks declined 14.3% to $3.2bn, as compared to $3.7bn in Q1 of last year.
“Our revenue has gone down due to our ongoing strategy”, said Leprince. The company also stated that “the sequential decline in Nokia’s gross cash was primarily due to repayment of certain debt facilities totalling approximately EUR 1.8 billion during the first quarter 2014.
“We want to grow, we are a very efficient company and the MEA region will bring growth to our company. Here, we will sign more deals."
Nokia also planned a EUR 5 billion capital structure optimisation program which focuses on recommencing ordinary dividends, distributing deemed excess capital to shareholders, and reducing interest bearing debt, according to a company statement.
Nokia’s plans are also focused on “perfecting the customer experience”. Leprince pointed out that Nokia was one of the first companies working on Customer Experience Management.
“In this region, every CEO wants to differentiate their customers”, stressed Leprince. Nokia Netoworks wants also to bring solutions to the operators and try to solve “how to deploy, where you deploy, how do you price and how do you launch”, he added.
Leprince also added that while LTE brings many opportunities to the region, it also has some challenges. “Spectrum is a wide subject in MEA. In vision 2020, they want to have ten times more traffic, ten times more capacity and ten times more spectrum. This last part is going to be very tricky in some parts of the region,” he said. Leprince commented that regulators are part of this discussion as the development of the country also depends on thistopic.
For the time being, the major developments that the company will market will be related to radio and all the aspects of cloud. Leprince said that the company is developing its Liquid Applications, which use Nokia Radio Application Cloud Server (RACS). RACS deploys the latest cloud technology and service creation capabilities, running on standard IT middleware, into the base station. RACS provides processing and storage capabilities, together with the ability to collect real-time network data, for example radio conditions, subscriber location, direction of travel and more. This data can be exploited by applications to offer context-relevant services that transform the mobile broadband experience and directly translate that experience into value.