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OSS

MWC 2011: NSN Talks Up LTE, Hints at M&A

BARCELONA -- Mobile World Congress 2011 -- Nokia Networks CEO Rajeev Suri came out fighting here Monday with talk of a rapidly expanding Long Term Evolution (LTE) business, growth prospects for 2011, a dig at Ericsson AB (Nasdaq: ERIC) and a hints of some strategic acquisitions.

Suri told press and analysts at a morning briefing that about two years ago NSN had major concerns that they "we were behind" in LTE developments, but the company now believes (along with all the other infrastructure vendors…) that it is the market leader in terms of LTE capabilities and signed deals (31 to date).

In fact, Suri said that in independent tests performed for Telia Company by the Signals Research Group, NSN's LTE infrastructure had outperformed that of its Swedish rival in terms of uplink and downlink capacity, while he also cited research that showed NSN's infrastructure provided lower latency and better performing radio resource scheduling. "People think there is little differentiation in network equipment, but these statistics show much better performance than Ericsson," boasted the CEO.

That's fightin' talk…

He also provided an update on the vendor's Business Solutions division, which is one of the largest providers of Service Provider Information Technology (SPIT) systems to operators globally but which has just lost its chief and slightly lost its way last year. (See NSN Revamps SPIT Unit.)

"Business Solutions fell short of expectations in 2010 -- getting it back on track in 2011 is a priority," stated Suri, who predicted that subscriber data management (SDM) and mobile security would be two of the biggest growth areas this year for NSN. (See SDM Finds Its Customer Face.)

He also hinted at some potential strategic M&A activity in the SPIT sector for NSN. When asked by Light Reading whether NSN had any gaps to fill in its Business Solutions portfolio, Suri noted that in OSS "we have some holes to fill -- that's all I'm saying." 'Nuff said!

He couldn't elaborate on NSN's current M&A process, the purchase of Motorola's wireless networks business -- NSN is still "working towards" a first-quarter close for that deal -- and would say only that "talks continue" about the prospects for external investment from the private equity community. (See Huawei Sues to Block Moto Sale to NSN, Huawei Wins Restraining Order Against Moto and Report: NSN In Stake Talks.)

Naturally, Suri talked of mobile broadband being a key driver for the company in 2011, when it expects to grow at a faster pace than the overall market for network systems and associated services. (See Signs of Growth at NSN.)

But he identified four key areas where NSN believes it can make headway in 2011:

  • The "smart network" -- Suri said the capability to manage increasing volumes of signaling traffic and to manage traffic from multiple access networks would be key to attracting new deals this year from operators looking to deal effectively with the demands of growing smartphone and data service use. NSN can help with its "sexy flexi base station." (Honest!)

  • Long Term Evolution Time Division Duplex (LTE TDD) -- The TDD flavor of LTE is going to be "bigger than most people think … there is a lot of unpaired spectrum" that can be used for LTE TDD deployments, said the CEO. "We saw this market coming a long time ago," and expect to see major deployments in India in 2011, followed by China and Japan in 2012, though NSN also sees opportunities in Europe, the Middle East and the U.S. (See Market Spotlight: LTE TDD.)

  • Customer experience management (CEM) -- "This is where operators will spend more money this year," said Suri. NSN research shows that "operators now put this as their number one priority, whereas a few years ago it was managing their capex. The growth in this [CEM] will outpace the overall market by a few percentage points this year," predicted the CEO, who cited NSN's move to add identity management capabilities to its subscriber data management (SDM) platform as an example of how it is evolving its offerings to operators. This move enables mobile operators to offer their customers a single sign-on for their own services and applications as well as those of their content partners, making it easier and quicker for end users to gain access to the content they want. This, said Suri, delivers increased revenue opportunities for the operators and an improved customer experience for the operator's subscribers.

  • Dealing with over-the-top (OTT) traffic -- Suri noted that some operators have "reacted in a very disappointing manner by running to the regulators" when faced with the growing tide of OTT traffic going over their networks. "That's not a strategy for success." But he didn't claim to have the ultimate solution. "If anyone says they have the perfect answer to OTT then watch to see if their nose is growing," said the CEO. "Operators can't out-Google Google, but they [operators] aren't helpless." Suri noted that the operators have a number of attributes that the OTT content providers don't possess -- an end-to-end network with quality of service controls, customer data and the trust of their subscribers. Operators can capitalize on this by becoming information and application brokers, noted Suri.

    Get all the news that matters from Barcelona at our special Mobile World Congress Show Site.

    — Ray Le Maistre, International Managing Editor, Light Reading

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