Interview

Connectivity with Efficient Business Transaction : Ajay Ranjan Mishra, Global Head Business Development – Nokia Siemens Networks, India

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“Nokia Siemens Networks assist in aligning its customer’s organisation processes and business model according to their chosen strategy, current assets and market conditions to achieve the structural and strategic changes that are competitive,” says  Ajay Ranjan Mishra, Global Head Business Development for New Growth Markets, Nokia Siemens Networks (NSN) to egov magazine

Nokia Siemens Networks is a global player in the telecommunications industry. Briefly tell us about the company’s overall success and achievements in providing solutions to its customers.

At Nokia Siemens Networks, we build the solutions focusing on four key business issues:

Connectivity: To help streamline the network technology evolution, build coverage and capacity, and reap the business benefits of a positive environmental approach, Nokia Siemens Networks offer technology-neutral solutions that deliver future-proof, end-to-end communications systems.

Efficiency: To help find the best way to reduce Operating Expenditure (OPEX) and Capital Expenditure (CAPEX), improve productivity and optimise the use of existing assets, Nokia Siemens Networks offer a proven three-step benchmarking, auditing and business optimisation process.

Revenue Growth: Nokia Siemens Networks’ end-to-end approach to business solutions helps create, test, deliver, and charge/manage innovative services that delight end-users in all the chosen markets. Our approach helps our customers’ business to drive growth; increase value and  improve profitability.

Business Transformation: Nokia Siemens Networks assist in aligning its customer’s organisation processes and business model according to their chosen strategy, current assets and market conditions to achieve the structural and strategic changes that are competitive.

The following are few of the success stories with our customers:

Bharti, India
Challenge: To provide secure power especially for sites outside the grid.

Solution: Savings of USD 14,000 per site in energy OPEX every year by hybrid solar-wind solution. Working together, Nokia Siemens Networks has helped Bharti extend the reach of their solar hybrid sites. In the state of Orissa, one of these sites is operating without diesel 95% of the time, which translates into significant savings.

VimpelCom, Russia
Challenge: To improve network and service quality while reducing costs. Solution: Higher quality, lower costs and greater customer loyalty from real-time visibility of live traffi c and subscriber activity with NetAct Traffi ca (solution of NSN). With Nokia Siemens Networks NetAct™

solution, VimpelCom can trace different phone types, usage and problems in real time,  making it possible to speed up trouble-shooting and manage service quality more cost effectively.

Hutchison Telecom, Indonesia

Challenge: To build service delivery machinery quickly from the ground up as effi ciently as possible.

Solution: NSN launched a competitive service offering, supported by tailored service delivery  platform and managed services for daily operations. From the very start, Hutchison matched their competitors for value and exceeded their own internal predictions for subscriber acquisition.

Geographical Information System (GIS)

Challenge: To offer reliable and cost-effective network coverage, capacity and operations to most challenging schedules and performance requirements

Solution: Fast rollout and launch of nationwide shared Universal Mobile Telecommunication  System (UMTS) network, operated from our network operations centre. As a result, 3GIS was  among the fi rst service providers to launch 3G services. To reduce CAPEX and meet  regulatory and coverage timetables, 3GIS decided to implement a network sharing solution in  Sweden. Another priority for 3GIS was to focus on their core business of serving customers.  Nokia Siemens Networks’ comprehensive solution has enabled them to meet their challenging  objectives for speed, cost effi ciency and service coverage in their rollout and operations.

Please tell us about how the New Growth Markets are addressing consumer needs. What is Nokia Siemens Networks plan of action in this regard?

Nokia Siemens Networks analysis of global income shows that 2.7bn people earn 2 USD or less  per day, and have a budget of 3 USD per month or less to spend on Information and  Communication Technology (ICT). Slightly higher up the income scale, we fi nd that 2.8bn  people have an income of between 4 USD and 40 USD per month. Addressing the affordability  challenges for these income groups is a fundamental consideration.

Affordability is linked directly to the Total Cost of Ownership (TCO) for the consumer. TCO    includes the service fees, taxes and mobile handset price. High TCO is a major user growth barrier for accessing ICTs through mobile communications. A TCO of less than 5 USD per month would enable the majority of people in emerging markets to access and use mobile services. Nokia TCO study, November 2007 of consumer TCO across 80 emerging market countries found that only four countries have achieved the limit of 5 USD.

A major part of achieving lower consumer TCO is the deployment of a mix of innovative technology and novel business models to minimise the communications service providers’ (CSP) OPEX and CAPEX.   For example, networks and their support functions typically account for more than 50% of net OPEX in emerging markets. There must also be a sharp focus on issues like reducing the power consumption of base station sites, sharing site infrastructure to reduce capital costs, and solutions that cut backhaul costs.

With lower costs, the CSP is in a stronger position to offer lower-priced services to its customers and still remain profi table in its business. End-user costs  are also widely reduced by the sharing of devices. Recent studies have shown that 81% of  lower income consumers in India do not own a handset, yet 55% can get to a phone within fi  ve minutes  LIRNEAsia study on Teleuse@BOP in Pakistan, India, Sri Lanka, Philippines,      Thailand, 2006). Transparency of costs and giving consumers control over what they spend are also vital for building confi dence. While developed markets have experienced rapid growth in data use driven by fl at-rate pricing tariffs that are easy to understand, these are typically pitched too high for lower-income end users in emerging markets. Communications service providers need to fi nd new and innovative pricing models that work with low Average Revenue Per User (ARPU) markets.

Communications services providers can help to create a better market by offering more  services that can generate economic benefi ts for users. They can build greater trust with  their customers that will generate long term growth and bring other benefi ts such as lower  churn. But enabling affordable connectivity takes a united effort between different players in  the ecosystem, particularly through public-private partnerships, so governments also have a  clear role in actively helping the business ecosystem to develop.

Nokia Siemens Networks helps provide solutions for communications service providers, one of  them being the village connection. The company is also active in many other fronts. For  instance, it has commissioned a study (with Professor Waverman from London Business  School) aiming at understanding how well ICT investments are being used. The connectivity  scorecard is being expanded already to come up with more detailed insights and more  countries: the work is done in co-operation with national governments and multinational  institutions.

Providing affordable communications to the unconnected is a prime motto of Nokia Siemens Networks. Please elaborate on the success rate of ‘Village Connection’ solution that NSN has developed.

Nokia Siemens Networks Village Connection is an awardwinning Global System for Mobile  Communications (GSM) and Internet Protocol (IP) – based system that is one example of a solution that extends mobile voice and data coverage into rural villages.

Village Connection is deployed in four states of India today – and trials are ongoing with the operator Vodacom in Tanzania. In addition, trials are ongoing in several countries across APAC, Africa and Latin America.

Village Connection won a top innovation award at the Indian Telecom Equipment  Manufacturers Association (TEMA) National Awards Ceremony in May 2008. According to  N.K. Goyal, Chairman Emeritus, TEMA, two key factors made Village Connection stand out in  the Innovation category. The fi rst is the system support for local subscriber management  in the villages, enabling a franchise-based business model. The second is its solution  architecture that eliminates the traditional network hierarchies for traffi c between  neighbouring villages, minimising the capital and operational expenditure for operators.

Tell us about the important fi ndings of the e-Governance survey that Nokia    Siemens Networks conducted along with the Commonwealth Telecommunications Organisation.How is NSN planning to incorporate these in its e-Governance initiatives across the globe and particularly in India?

Mobile devices have the maximum potential to stimulate the supply and demand of public  services because of their pervasiveness, interactivity, multiple functions -voice, radio,  Internet, payment, their ability to include the most marginalised people in society, their  potential to reduce opportunity costs associated with traveling or corrupt practices. Despite  these observations, the report found that few of the stakeholders consulted recognised the  importance of mobile communications, while only a minority of users thought it was  important to receive e-Content through the mobile phones. One implication that arises from  this is the need to raise awareness of mobile devices as tools for delivering socially-oriented content. The private sector, in particular equipment vendors, mobile device manufacturers and operators must do more to educate policymakers, civil society and users about the ability  of mobile devices to deliver services, with more examples of mobile content and service provision. Currently, policy makers, civil society and users still view mobile devices as tools  for voice and commercial Value Added Services(VAS) such as ring tones.

Another important fi nding from the report is how governments of Ghana, India and South  Africa are making efforts to provide shared access points to broadband Internet through  Personal Computers (PCs) and PC like terminals. In South Africa, some of these telecenters and  cyber labs were implemented as part of the universal service strategy and were considered expensive, dysfunctional and are under utilised.In Ghana, the fall in the number  of commercial Internet cafes, from 2,000 to 1,200 between 2003 and 2006, is seen as evidence of an unsustainable business model.

An important lesson here is the responsibility of all stakeholders (governments, private sector, civil society) to facilitate and create5 sustainable operational models for shared Internet access. NSN Village Connection Internet kiosk is taking this lesson to a concrete level by advocating a franchise based business model to its operator customers to ensure sustainability.

National e-Governance Plan (NeGP) of the Government of India is a big project, where mobile service providers have a signifi cant role to play. What is your take on this?

I think that NeGP is a step in the right direction. I also agree that mobile services providers  have a big role to play in NeGP. But in my opinion, taking connectivity to rural domain  would mean that government, regulators, private sector (telecom vendors and operators) and  Non – Government Organisations (NGOs) have to come together and work as a team to  make this plan a success and also make sure that benefi ts of connectivity are reaped by the rural population to increase their living standards and contribute in the growth of the country.

Nokia Siemens Networks have been long working on this by bringing solutions that are cost     effective and business models if applied brings win-win situation for all. Apart from this, we are already engaging in multi-stakeholder dialogue involving government, regulators, operators and NGOs. I think that getting 5 billion people connected by 2015 and making most of them reap the benefi ts of connectivity is a goal that is defi nitely achievable.

Mobile phones are a potential source of commercial
transactions. Please tell us about the opportunities and hurdles in m-Transactions.

Financial services are critical for economic development and inclusive fi nancial services for  the un-banked are essential for poverty reduction. Over the last two years, pilot programmes  in Africa and Asia have highlighted the potential for mobile phones to deliver basic fi nancial  services in developing countries. A report by Vodafone, Nokia and Nokia Siemens Networks  shows how these services provide the fi rst real opportunity for many poorer people to get on a  formal ‘banking ladder’ with benefi ts including reduced threat of crime, time saving and secure savings opportunities.

Existing banking regulation is currently inappropriate for the growth of m-Transaction schemes. Vodafone, Nokia and Siemens Networks are calling for regulators to ensure they do not restrict commercial experimentation or limit the schemes to subeconomical scale. Key suggested changes to regulation detail in the report include:

Review of deposit taking: Current regulation of deposit taking is shaped around the needs of banks and at present mobile systems are limited in the size of transactions they can undertake. Deposit taking regulation needs to allow new entry on a larger scale by mtransactions operators.
Access to the clearing system: As new entrants, m-Transactions operators must be able to access the clearing system.
Adaptation of ‘Know Your Customer’ (KYC) and antimoney laundering: KYC and anti-money laundering rules need to be adapted to conditions in developing markets where formal documentation and access to photocopiers is limited. The customer data held by mobile operators, with appropriate safeguards, offer an alternative to existing forms of regulation.
Interoperability of m-Transaction schemes: Interoperability of m-Transactions schemes must be carefully considered to enable operators to benefi t from network effects but ensure that the intensity of competition in new markets and need for innovation is not stifl ed.

The development of m-Transactions is also expected to introduce signifi cant improvements in fi nancial services, such as easier and cheaper international payments especially for remittances home, or reduced risk in domestic payments by near real-time transfers.

There is a growing digital divide between the high end users
of mobile phones and the low income subscribers. Please comment.

Most emerging markets recognise the need for infrastructure investments to be matched with  parallel educational program to increase ICT skills. The evidence shows that greater use of ICT improves people’s economic situation and their quality of life. Consumers gain more spending  power, which naturally drives up demand for services, creating a virtuous circle of growth.  Mobile access holds the key for bringing the power of the Internet to the masses in emerging  markets. While, users in developed markets see mobile Internet access as a convenient  complement to the fi xed Internet experience, in emerging markets the mobile will be the  dominant means for delivering vital services via Internet.

Nokia Outlines Initiatives Targeting Rural Markets of India

Nokia is now tapping rural markets of India in the areas of micro- fi nance, distribution and value-added services specifi cally for farmers. The company, which has forayed into Internet services on a global scale, is also looking to launch entry-level handsets to cater to the non-urban consumers.

Nokia is looking forward at micro-fi nance as a major initiative to increase mobile penetration  in India from the current 26 per cent. The company is running pilots and trials to gauge  consumer response in select markets and will soon come out with specifi c offerings to make  buying mobile phones more affordable. The company is also providing agriculture-based  solutions catering to the vast farmer community in India. Nokia is working with a host of  content providers and has started programmes for farmers, which include providing solutions from information on market prices for agricultural products to weather updates to fi nancing  options. To access diffi cult and underserved markets, Nokia aims to leverage its distribution  network to expand into rural geographies. In addition to increasing its existing fl eet of rural  vans, the company will also be reaching out to villages across India to showcase the relevant  product portfolio and solutions to create awareness on the use of mobile technology. Nokia is  simultaneously focusing on increasing its Care Service Centres in the rural geographies.  According to International Data Corporation (IDC), Nokia accounted for 52 per cent of the  handsets shipped into India during the quarter ended March 31, 2008.

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