On the Hot Seat with Rick Corker, head of Nokia Siemens Networks North America
On the eve of the CTIA Wireless 2013 show, Sue Marek, editor-in-chief of FierceBroadbandWireless, talked with Rick Corker, head of Nokia Siemens Networks North America about T-Mobile's network transformation, the wireless industry transition to all-IP networks and how the current uncertainty about the company's ownership structure is impacting its business. Because of NSN's growth in North America, Corker was recently appointed to the company's executive board and executive management team.
FierceBroadbandWireless: NSN recently did a customer study and found that 39 percent of customers were considering switching networks, which is quite high. This was a higher percentage than you had found on a previous study. How do these customer studies help NSN?
Rick Corker: Yes that statistic was quite high and a big increase over what we found last year. The customer studies that we do give us insight into the various markets. And we can take that information to our customers and show them trends and offer them potential solutions that may address those problems. For example we have products in customer experience management that may help with churn and help operators figure out why people are churning.
FierceBroadbandWireless: AT&T Chairman and CEO Randall Stephenson has talked about moving to an all-IP network and how LTE is much more efficient, which will result in reduced capex for operators. For a company like NSN that has to be worrisome. That doesn't sound like good news for people that sell to operators.
Corker: Yes and no. It also opens up a lot of opportunities for us. We want to focus on being the mobile broadband network, and we are proactively encouraging operators to move to an all-IP network because we need the efficiencies in the network. You can try to prevent it, but it will happen and we think it's an advantage for us to help with that transition.
At the end of the day, you still need radios on towers to build networks. But it's also about how we manage the traffic and create efficiencies for the operators. The all IP network is important for us. Virtualizing the core and virtualizing parts of the access network is part of keeping those costs down. We want to be proactive about that.
FierceBroadbandWireless: Do you also emphasize your services business now? Is that part of your strategy?
Corker: Yes, there are two areas. Global services are 50 percent of our business, and we are also focusing on professional services. There is the traditional services business, which is installation but also planning and putting the building blocks together. And the other area is software. How these networks interoperate is important. Software is increasing part of our business. How you build more capacity is through software. How do you optimize these networks? It's through software. If you look at virtualization, it is around completely independent hardware. We want the best software solutions and how we manage that is framework. We want to continue to build radios but also build software to support them.
FierceBroadbandWireless: NSN is a primary vendor for T-Mobile USA and its network modernization project. How is that progressing?
Corker: Last year we had a lot of focus on modernizing the 2G and 3G parts of the network. This year it is about rolling out LTE. Technically it's performing extremely well, and it's out-performing many networks out there. Deployment continues to build out, and we expect T-Mobile to announce more LTE markets on a regular basis.
FierceBroadbandWireless: You have focused on some of the smaller operators in North America. The big operators have already signed their deals so is the emphasis on smaller guys?
Corker: Yes we have had a lot of success with US Cellular and Canadian operators. We have had opportunities with the Tier 2 operators. We aren't very active with smaller operators because we want to have some scale and show we can support them. It's obvious that AT&T and Verizon deals were won some years back. We will work with the Tier 1s on future opportunities, but the original FD-LTE builds are done.
We continue to grow. LTE is the fastest growth area in our business, and we want to continue that focus. There are opportunities coming up with TD-LTE, and we are involved in that. The small cell arena is also an area where we can bring our expertise. We believe that is an opportunity for us as well.
FierceBroadbandWireless: Your CEO has recently said revenue from small cells will take a few years before it's really strong. Are operators buying and deploying small cells today?
Corker: I think in the last 12 months there was the hype phase, and now we are in the planning phase and figuring out how to fix the challenges such as cost to deployment, how to handle backhaul and maintain them once they are deployed.
Operators are showing a lot more interest in them. It's interesting to see the three main markets--North America, Japan and Korea--are more advanced in small cells. They are also more advanced in LTE. These are the most likely to be the first movers with VoLTE and to make sure you have a good experience you need more in-building coverage. But there are still challenges to be solved.
In 2014 we will see deployment in scale start to happen in North America. [We're] definitely getting momentum, [but] many other markets are not there yet because they haven't started building the broad based LTE network yet.
FierceBroadbandWireless: Is 5G a marketing term or is it real?
Corker: I think it's pretty much a marketing term. From our perspective, we are just trying to show the potential of LTE technology--Whether you call it 4 1/2G or not. From a technology standards perspective there is no 5G defined today. We've been doing 1.4 GB on our LTE in labs. It's around demonstrating the technology [to] allow more to happen. But it wouldn't be cost-effective to deploy it today.
FierceBroadbandWireless: There's been a lot reported on NSN's structure. The agreement between your two parents has expired. Is this uncertainty impacting your business?
Corker: No. Absolutely not. We have dialog with our customers about it, and they understand the structure quite well. The reality is that it doesn't affect how we run the company. We are self-funding. 2012 was the best year we have had. We are profitable. The operators are seeing a stronger NSN, and we continue to win big contracts. We now have 81 LTE contracts globally.