Optical/IP Networks

Rouanne Has Ericsson in His Sights

Marc Rouanne, the new head of radio access at Nokia Networks , came out with all guns blazing today in his debut presentation to analysts and journalists at a company presentation in London, saying he aims to knock Ericsson AB (Nasdaq: ERIC) from its No. 1 market position in radio access equipment. (See Rouanne Takes 4G Role at NSN and Nokia Siemens Hires Exec.)

In classic combative Rouanne style, the former Alcatel-Lucent (NYSE: ALU) executive said that Nokia Siemens was a “strong number two” now and that he was competing to be the No. 1 vendor by revenue in radio access network equipment.

”We will compete for the number one position,” said Rouanne. “We have strong assets to compete for the number one position.” Nokia Siemens's radio access technologies range from 2G to 4G, including long-term evolution (LTE) and WiMax, and the company claims to be the market leader in EDGE. It is believed to have a market share of between 28 to 30 percent, compared with Ericsson's 33 to 35 percent.

But exactly how and when Nokia Siemens will achieve its goal to become No. 1 was less clear. For starters, Rouanne said that the company won’t seek to win deals by undercutting competitors on price.

“The path to number one will not be driven by fierce acquisition of market share at the expense of profitability,” said Rouanne. “There are a number of paths to number one.”

One of which might actually be that Ericsson could slip from its position as rivals such as Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), which are particularly strong in the high-growth emerging markets, continue to eat into the Swedish vendor’s, and other incumbent suppliers', business.

“It may take a little time, but we’re giving ourselves time for that,” said Rouanne. “”We want to be best in revenues... But it has to be good margins.” (See NSN Hunkers Down.)

Rouanne said that Nokia Siemens will build on its existing customer base of 262 mobile operators that serve 1.5 billion customers worldwide.

In terms of market expansion, Rouanne singled out the U.S. and Japan as the two key markets where he wants Nokia Siemens to have a bigger presence.

As a proof point for Nokia Siemens's ability to take the radio access top spot, the company claimed that it has replaced 18,000 base stations, both 2G and 3G, from other vendors at 22 customers in 15 countries during the past 14 months.

But that rip-and-replace process works both ways: Nokia Siemens has lately been on the receiving end of the process from its rivals, most notably Huawei and ZTE, in Italy, Hong Kong, and Singapore. (See ZTE Ousts NSN in Hong Kong , NSN's Mixed Fortunes, Huawei Partners StarHub, and NSN's Mixed Fortunes.)

But Rouanne said that the amount of Nokia Siemens base stations that have been replaced is “much less” than the amount of base stations it has replaced, though he declined to be specific about the numbers.

— Michelle Donegan, European Editor, Unstrung

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