NEW DELHI: Nokia is now India’s top 4G LTE vendor, having bagged 120 contracts from telecom operators so far in 2016, says the Finnish telecom gear maker’s country head Sanjay Malik. In his first interview since taking charge, he tells ET’s Danish Khan that the company’s business with existing customers will only grow as they look to transform their back-end networks for delivering high-speed bandwidth services. Edited excerpts
Q1. Which areas have you decided to focus on?
We are number one in LTE (4G) market on the basis of all deals that concluded before and after the spectrum auction. Most of it has been done. We are number one in terms of circles and number of base stations which are going to be rolled out.
Our market share in 4G has been higher than 3G and 3G market share was higher than 2G.
Similarly, we are number one in VoLTE solution, with a significant lead. It's almost 100% market share. Furthermore, our managed services business in also growing.
Our deals in the existing service providers will grow with IP, optics and fixed networks requirements. We will be growing in this space at very high pace
We are expanding into segments beyond the service provider segment. We have selected five of the industry segments - energy (utility and oil and gas), transportation, public sector (railways, aviation, and smart cities), large enterprises and web scale companies. Because of digitisation, these segments require high capacity and efficient network, and that’s where our solutions are.
We are investing in the IoT (Internet of Things) lab that will help us in addressing the need of new customers and winning larger share in that market.
Q2. How many deals has Nokia won in India this year?
We have bagged 120 deals in this calendar year, which is almost double as compared to that last year.
Q3. How do you view the Indian market?
The Indian market is seeing huge data growth, and it will require both coverage and capacity, and that’s where a majority of telcos’ investment will happen. Besides 4G and building a seamless broadband experience, telcos will have to adopt IoT as well. Telcos are also looking to optimise their cost of operations to keep it at a minimum.
Our portfolio goes beyond mobility into optics, IP and fixed networks, along with applications and software, and it is much better than the competition.
Q4. Have telcos started deploying networks in the 2500 MHz band?
Contracts are being done for both FDD and TDD technologies, covering most of the bands.
When the 2300 MHz came in, we didn’t have the device ecosystem but within a couple of years, the market was flooded with supported devices. 2300 Mhz saw huge demand in recent auctions.
2500 MHz will build up very fast. The telcos will have to build up for both capacity and coverage, and this band will be used for capacity going forward.
Q5. How do you look at the competition in India?
We do fight in a competitive environment, but definitely the operators do look at the technology, which we provide through our products and solutions along with services.
Q6. Where does Nokia stand in managed services business?
We manage very large number of base stations of around 200,000 and subscribers across India. We do large managed services for operators across India. Overall services, including managed services, after sales maintenance and even the system integration, is a very substantial component for our business in India.
Beyond mobility managed services, we are now expanding into some of the adjacent managed services, such as enterprise managed services and IT managed services.
Q7. Have 2G, 3G roll-outs slowed down in India?
The whole roll-out is moving towards 4G LTE as it delivers data at much lower costs and much higher efficiency.
2G roll-out will continue, keeping rural growth in mind. From an industry perspective, more capex is going towards 4G and lesser compared to earlier on 3G. Depending upon spectrum situation and carriers, there will be a co-existence of 3G and 4G for data layer. And for carrying the voice traffic, it would be still kept with 3G.
Q8. The Nokia CEO recently warned of a shrinking telecom equipment market. Are you seeing the same trend in India?
In India, for 4G and network business, it is still in the early stages. Still a large population needs to be covered with 4G technology. 4G will go to a very significant proportion of the 2G coverage also.
Q9. Before the spectrum auctions, gear vendors were under pressure due to poor business. Has the situation changed now?
There is clarity in terms of spectrum. The spectrum scarcity problem has transformed into spectrum abundance. Now telcos know what is to be done for the next couple of years.
Q10. Is consolidation in telecom industry a boon or bane for equipment vendors?
Global trend suggests that there has to be a smaller number of telcos. Based on that increased competitive pressure, consolidation will happen. If the industry players are healthy, it is good for us. If consolidation helps in making the telcos stronger, it is good for Nokia in India.
Q11. Are telcos investing in just LTE coverage or has the capacity expansion kicked off already?
Based on digitisation and data growth, there are pockets where capacity expansion is also happening. In last year also, some capacitye xpansion happened in India. We as consumers see the coverage part. going forward, it would be both coverage and capacity.
Most of data still gets generated indoor, which is capacity, which can be addressed through capacity solutions.
Q12. Are you seeing an increased adoption of small cells and other indoor solutions?
We are seeing better adoption of small cells than it used to be. It is happening. There will be much more adoption of small cells and WiFi offload as capacity needs increase in India.
Q13. What about IP and Optics?
Telcos are driving this growth based on data uptake and requirement for bandwidth and backhaul. We have entered into the cable segment or MSO with our IP and GPON solution. Besides, we are also working with large enterprises.
Q15. Please shed some light on Nokia’s R&D and manufacturing facilities?
We have large R&D in Bengaluru and Chennai. These centers are into providing R&D for technologies like VoLTE, IoT, customer experience management and LTE. We have 6000 employees in Bengaluru only associated with high-tech solutions.
Chennai R&D center works on fixed and smart home solutions with 3000 employees. They are supporting network technologies around the globe.
We have a factory as well, which serves to global markets as well. 50% of manufacturing output is addressing global markets.
Besides, we have Global Delivery Centers in Chennai and Noida, which take care of managed services, roll out integration, after sales, hardware services along with customer experience. We are supporting networks in 86 countries out of these two locations.
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