No question about the top priority

Service providers are the front line of the communications industry. They are the ones to feel the heat of change first as end-users look for new services and the best deals matched to their own lifestyles.

“The challenges of change that service providers face will be the top priority in our mindset,” states Karl-Christoph Caselitz, who heads up the CMO organization, which is responsible for operations that directly address service providers. A big job, but Caselitz is very clear about what needs to be done to achieve success.

“Customer satisfaction, differentiation and relationships will be central to our way of working,” he says. “We have formed Customer Teams to help service providers succeed in today’s dynamic business environment. Each team will work with the service provider and look after its interests. As well as a team head and executive, these teams will comprise partners from the device business, and, most importantly, representatives from the service provider itself.

“The customer teams will meet regularly to ensure that we are cooperating closely on the service provider’s roadmap and network evolution.”

Caselitz’s long experience in communications, including his former role as President of Siemens Mobile Networks, gives him a strong insight into some of the many challenges that service providers face today. Chief among these, he says, is the need to control costs.

“Mobile and fixed service providers are focusing on their cost structure,” says Caselitz. “These efforts will probably increase as revenue and subscriber growth slows in mature markets. Most new subscribers will come in new growth markets, increasingly from the low income segment. In addition, there will be sharper competition in all markets and pressure on tariffs. And we are already seeing moves to restrict high-margin roaming revenues in some mobile markets.

“Meanwhile, fixed line service providers need to defend their existing customer base and attract new broadband subscribers. They must do this with minimal investment because new subscribers will come primarily from rural areas. This will raise pressure on operators to reduce costs to maintain profitability.”

Balancing out these pressures are great new opportunities. Operators have new scope to evolve their business model from providing bandwidth and channel providers to generating content and capturing new revenues. Sales and business models could also be adapted to address other growing markets.

In addition, over the next three years, operators and service providers will have new opportunities to boost their business with broadband wireless technologies for residential, enterprise and mobile customers.

“Part of our own challenge will be to support service providers as they search for new revenue sources from enterprise and residential subscribers, as well as from new applications,” says Caselitz. “The continuous introduction of new applications, flexible tariff schemes and new technology will be prerequisites to attracting and defending the customer base.

“Our complete portfolio in fixed, mobile and fixed-mobile convergence provides the best-in-class and most balanced experience in the industry. We will apply the knowledge gained from all world markets to each service provider individually,” he continues. “We have the capability to roll out low-cost solutions quickly and efficiently in mature and growth markets through our leading market positions in both.

“Nokia Siemens Networks will be the world market leader in all regions that show high population growth and fast subscriber growth, including Latin America, Asia Pacific, the Middle East and Africa.”

The combined networks businesses of Nokia and Siemens bring compelling benefits to service providers.

Close cooperation with Nokia, the world leader for mobile devices, puts the new organization in pole position for all mobile service providers in launching new applications. Links to Siemens, with its presence in many industry segments and nearly all markets around the world, provides understanding and competence for future expansion into new markets.

“Our strengths and differentiators can be summarized as service capability, innovation, supply chain management, with fast, lean roll-out, a complete portfolio, and leadership in applications,” Caselitz explains. “We are in the unique position of bringing together two companies with complementary strengths to form an even stronger combination: Nokia, recognized for its lean and fast business approach, and Siemens, renowned for its global presence and project management capabilities, and both companies known for their strong tradition of innovation.”

In the new and constantly changing world of communications, Caselitz sees new relationships emerging: “We will have to drive new revenue together with fixed and mobile service providers. The old ‘customer vendor’ relationship will become obsolete. Future growth will involve vendors, application providers, ISPs, terminal developers, content providers and, of course, service providers.”

In conclusion, Caselitz emphasizes that Nokia Siemens Networks offers comprehensive end-to-end capability encompassing the broadest product and service range solution.

He says: “Our Customer Teams are passionate about serving and consulting with all our service provider customers. The next few years will be decisive for driving up ARPU through new end-user experiences and applications, so the presence of a player with a complete portfolio and a close relationship with the world’s foremost device manufacturer will make a major difference.”