NSN CEO dismisses wholesale network model, touts LTE contracts

BARCELONA, Spain--Nokia Siemens Networks CEO Rajeev Suri is no fan of the wholesale network model. During a media briefing at the Mobile World Congress trade show here, Suri said that while "on paper" the wholesale LTE network model may look good, in reality, it's losing steam. "I think it's more hyped," he said.


That candid comment from Suri is quite a turn-around for the equipment vendor, which in 2010 was awarded an eight-year, $7 billion contract from LightSquared to build its proposed nationwide wholesale LTE network. LightSquared later reduced that contract substantially after it inked a network-sharing arrangement with Sprint Nextel (NYSE:S). Today, LightSquared's fate is in question after the FCC said it will not allow the company to build its planned LTE network because of concerns over interference between the company's proposed network and GPS receivers.

Wholesale networks may not be thriving but consumer demand for mobile data certainly is. Suri said that NSN estimates that by 2020 wireless customers globally will be using one gigabyte of data per day, an amount he compared to the equivalent of every user watching one hour of high-definition video per day.  

To accommodate that demand, Suri said that operators will move rapidly to LTE. He noted that there are 49 live LTE networks globally and said NSN equipment is involved in 22 of those networks. He also said that operators are going to become even more focused on monetizing services and keeping their networks profitable.

NSN, of course, believes that its company's Liquid Net network architecture is going to be key to helping operators address that growth and maintain their profitability. Suri noted that Liquid Net architecture has helped the company secure 52 LTE contracts globally.

While Suri admitted that NSN hasn't had as much success in North America as it has in Europe, he said that the company is a big provider to T-Mobile USA and hopes to be able to be involved in that company's recently announced plans to deploy LTE in AWS spectrum by 2013. "I'm cautiously optimistic that we will have some breakthroughs in the U.S.," Suri said.  

Suri also elaborated on NSN's progress in restructuring its business, noting that the company has already reduced its headcount by 1,000. In November, NSN said it would undergo a major restructuring to focus on mobile broadband and that it will slash up to 17,000 jobs by the end of 2013.

Related Articles:
NSN, Clearwire become casualties of Sprint's hosting deal with LightSquared
Nokia Siemens Q4 sales drop amid restructuring
NSN secures $1.56B loan to help with restructuring
NSN CEO: Parent companies will not contribute more cash to JV
Analysts: Network infrastructure spending cuts could hit Alca-Lu, NSN
Analysts: NSN's focus on mobile broadband smart move