Friday, October 26, 2018

Nokia CEO: 5G is Moving Very Fast and is Going to Have Massive Benefits

Nokia President and CEO Rajeev Suri says that 5G is moving very fast and will have massive benefits for consumers. Suri also believes that Nokia will see benefits from the 5G rollout because of their end-to-end portfolio.

“Our strategy is to benefit from the end-to-end portfolio that we have which is going to be critical to 5G because 5G is not just a step change from 4G, it is not just a radio technology,” Suri noted. “It is a change of the end-to-end architecture.”

Rajeev Suri, Nokia President, and CEO discussed 5G and how it will impact Nokia in an interview this morning:

5G is Moving Very Fast

5G is moving very fast. It started in the U.S. in this second half. After that, we will see activity in South Korea, Japan, and China during next year, also Europe at the back end of next year, some Middle Eastern countries and also Nordic and Scandinavia is starting to happen in 2019.

Our Strength is Our End-To-End Portfolio

Our strength is that we have an end-to-end portfolio. We are the only ones that have an end-to-end portfolio at scare and are operating in all countries. We did talk about some pricing pressure in regards to some customer situations in Q2 that have already reflected in our Q3 numbers. Overall, the pricing or the competitive intensity have not worsened or changed in the last few quarters. It is somewhat stable.

Our End-To-End Portfolio is Going to be Critical to 5G

Our strategy is to benefit from the end-to-end portfolio that we have which is going to be critical to 5G because 5G is not just a step change from 4G, it is not just a radio technology. It is a change of the end-to-end architecture.

First, it’s time for us to benefit from our end-to-end portfolio after the acquisition of Alcatel-Lucent. Second, we have a strong growth rival in enterprise and we’ve established a new enterprise business group and we’ve been growing at 18 percent a year in that business. Of course, with some of this software where we’ve had good growth in the quarter at 4 percent,  which is a stand-alone software business at scale. For us it’s all about driving this end-to-end, benefitting from 5G as well as enterprise and software. Our distinction, first of all, is the installed base and second is this end-to-end portfolio.

5G is Going to Have Massive Benefits

5G is going to have massive benefits, is going to have a lower cost per bit, and huge capacities for consumers. It’s going to have reliability in performance to enable all kinds of enterprise users; manufacturing, ports, transportation, energy sector, and a lot more. We’ve been getting a lot of technical first in setting the pace with that which is the benefit of our end-to-end portfolio.

Cutting €700 Million in Expenses

We believe the ones that win in this industry discipline cost management is a key competitive advantage. We are trying to get ahead of the curve and we will not slow the pace of change. We haven’t talked about the magnitude of the actual headcount numbers but we have said it’s €700 million. We have to work on headcount numbers country by country. Some of it is headcount and some of it is digitalization and automation to drive productivity.

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