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Pravin Prashant

A veteran in the industry with 20 years of experience in telecom, Beresford-Wylie has been working with Nokia for the last seven years. Before joining Nokia, he worked as CEO for Modi Telstra, a JV between Modi Corp and Telstra Corporation. He was instrumental in starting the first mobile network in the country on August 13, 1995. Prior to that, he held various management positions with Telstra corporate and government business unit. In an exclusive interview with VOICE&DATA, he spoke about Nokia's India performance, global network operating centre, services, and 3G. 

Excerpts:

Voice&Data: You were instrumental in launching India's first mobile network in 1995 and it's almost ten years since the first network was deployed. How do you see the last ten years of mobile revolution in the country?
Beresford-Wylie: We were instrumental in starting the first mobile network in the country on August 13, 1995, with around 29 subscribers. The subscriber additions were less than 10 a day and only on December 1, 1995, we were able to achieve double-digit additions. It is exciting to see what Indian telecom is today as there is a lot of pent up demand for mobile.

So, you can sense how business was in 1995. It was a slow start, as price of devices where on a higher side and regulatory sector was in a development phase. But things are different today. India is the most open telecom sector in the world. The competitive dynamics allows consumer choice of low tariff in the world, if not the lowest. India feels like a different country as ten years of hard work has really paid off. We have reached 60 million subscribers and added 2.5 million subscribers last month. And the target of 250 million subscribers by 2008 is a stretched but achievable target.

V&D: Nokia is planning to set up its first global network operating centre (GNOC) in India. Tell us in detail about GNOC?
Beresford-Wylie: We have announced device manufacturing in the country where more than 2,000 people will be employed. We are planning to set up global network operating centre (GNOC) in India and plan to deploy around 100 people in phase I. The GNOC will manage network operations for operators in all geographies- the Asia Pacific, Europe, the Middle East and Africa. It will manage 2G as well as 3G networks.

We are just quite ready and in the last stages of finalizing people, computing power, and domestic and international connectivity. We are working on training and development and intelligent offerings. We plan to be operational by the end of this year and fully operational by first half of next year.

V&D: How would you rate Nokia India's performance in the last couple of years?
Beresford-Wylie: We are very successful in the Indian market with five GSM players-Bharti, BSNL, Hutchison, Idea, and BPL. And this shows the reflection of our leadership and also the bullishness of the Indian market. India is an opportunity for Nokia network in terms of cost effective product built up.

In the Indian environment, next six months are critical for greenfield operations. We are actively bidding for Idea and Hutch, and getting ready for another round for Bharti and preparing for BSNL's next RFP. We are right in the middle of three deals. In revenue terms, we are moving towards $1 billion and BSNL expansion deal will help us in reaching $1 billion.

V&D: How do you see mobile deployment worldwide and the opportunities for Nokia on the network front?
Beresford-Wylie: We are close to two billion subscribers and the industry is planning to reach three billion by 2010 thereby covering half of the total world population. It would be a remarkable achievement. Of the next billion, 900 million will come from new growth markets, 800 million from BRIC (Brazil, Russia, India, and China) countries, and 500 million from APAC-China, India, and Asia Pacific. In terms of new growth market, the market has been changing. In 1991, it was Australia and UK. In 1995, it was Thailand and the Philippines. In 2000, it was India and 2005 it is Nigeria.

Nokia will offer devices and infrastructure for connecting the new and emerging markets. Even our experience in the Indian market will help us in the African market in terms of cost effective product built up.

V&D: For Nokia, the overall operating margin target is 17 percent in the next 2-3 years. For devices, it is around 17-18 percent whereas for infrastructure it is around 14 percent. How do you plan to achieve it?
Beresford-Wylie: 14 percent in any man's language is a healthy operating margin. We have got new growth markets, services business, and new products which will help us in achieving 14 percent by the end of 2006. In the first quarter, operating margin was at around 15.4 percent and in the second quarter it was at around 12.9 percent. In the second quarter we had lower gross margin and operating profits. So, by the end of 2006 we will achieve 14 percent.

In the new growth market, there is a little bit of concern as there is lot of swapping that puts pressure on operating margin and gross profit. Service is a growing part of our business. And there is a whole range of businesses - tradational delivery services, care services, system integration services, performance management, consulting services, and managing services. And the margins in all these services vary and average gross margin is not in the 40 percent range. Services adds to the top line but gross margin is lower. But you also do not have R&D opex. So it's a good business.

V&D: Service contributes 25 percent to the overall kitty. In terms of managed services, Nokia Network has signed up with 34 clients in 28 countries. So, how do you look at managed services?
Beresford-Wylie: Managed services are different for different service provider. Managed services include delivery, care, system integration, network planning and performance. One has to take people from operator, do site acquisition, site construction, delivery and maintenance. So in the long term it is a complex pie.

V&D: What do you feel about 3G development in India and how is 3G picking up worldwide?
Beresford-Wylie: At present, we have 100 operators who have launched 3G services and there is presently around 30 million subscribers and it is growing at the rate of 10 percent per month. In Japan, there is a huge movement and in Europe there is a growing momentum. It will reach inflexion point this Christmas particularly in Italy, Germany, France, and UK.  3G is an exciting prospect for India and looks likely for the first half of next year. We are just quite ready and evaluating final stages.

Source:Voice&Data