I'm sure they wouldnt do anything to you....Jorma seems like a nice guy.
Get set to welcome the mobile internet in 5 years
Manoj Gairola
& Sharad Goel
NEW DELHI 9 FEBRUARY
THE man's superstardom is obvious. There is a sudden buzz in
the cavernous Shahjahan Hall in Hotel Taj Palace: Jorma Ollila
has arrived. For a person who's transformed Nokia, a
133-year-old sleepy Finnish conglomerate into a fast and
focused cellphone world champion with a m-cap of $200bn, the
49-year-old CEO seemed remarkably accessible. He seemed to
have time for every guest who had come for CII's IT-Asia
reception on Wednesday.
When ET button-holed him for a few words, Ollila warmed up to a
number of issues: his management style, importance of
enhancing shareholder value, role of cellphones in the
convergence revolution, the mobile-phone market in Asia, the
telecom regulatory changes in India, and, indeed, what makes
Jorma Ollila tick!
What's the role of the cellphone in the convergence
revolution?
In the last five years, two major trends have taken place ?
mobility, which we have brought about by cellphones, and the
internet. In the next five years, these two trends would converge
and mobile internet would be the thing that we all would be
working towards in the next few years. That means we would be
able to bring internet access to every pocket.
What will be the impact of the changes in the telecom
technologies on Nokia?
Nokia is driving the development of current and new
technologies. We call our vision the mobile information society,
where mobility and internet, the two dominating drivers in
communications, will converge to enable access to innovative
and easy-to-use wireless internet-based services and
applications regardless of time and place.
These wireless services are and will be designed to improve the
quality of people's lives.
Tell us how you transformed a sleepy 133-year-old
conglomerate into a focused telecom company in just over
five years?
Nokia's transformation from conglomerate to a technology
company and then to a telecom company was dictated partly by
necessity. The company was growing in too many areas which
had become difficult to manage. Secondly, international trade
barriers were falling and businesses were becoming global. It
was not possible to be globally successful in so many different
businesses we had. So, the transformation was dictated by
necessity.
But it was also driven by the fact that we felt we had some
unique know-how in the area of mobile communication ? both,
infrastructure and handset ? which would give us an opportunity
to make a global impact. These two things came together in the
early ?90s and we thought it makes sense to divest bulk of
businesses and invest heavily in mobile communications. I think
it has paid off very well, but the transformation went through a lot
of pain and it was very dramatic.
How did you change the corporate culture from one that of
indifference to shareholder value to one completely
focused on it?
I think in the ?70s, with a regulated economy and very little
international cross-border trade everybody felt happy with a
growing company and mediocre profitability. But now the
pressures of the global economy are leading us to necessarily
be focused on profitability. It was a very big cultural change for
some people.
And yet you didn't shed people?
Yes, we changed their portfolios. We are a company that likes to
grow from within and give power and leverage to young people
and that has been our strength.
What's the average age in Nokia?
The average age is 32 years. Last year we added 12,000 people
on top of the 44,000 people and if you add people in age of 21 to
28, the average age remains low and this is essential in a
business that changes very fast.
What are the developments taking place in the broad-band
wireless access?
We have concentrated on the acquisition of small technology
companies that complement the technologies we have in-house
rather than going for mergers and building too many complicated
link-ups. We are developing methods in which our network
capability and handset capability will enhance and we can link
people on cellular network to the web and enable handsets with
functionality and design to handle large amounts of data in a very
clever way. This year the it would be WAP (wireless access
protocol), the next year there would be products around GPRS
(enhanced wireless technologies) and subsequently it would be 3
Generation (technology which allows voice and data
transmission through wireless).
What would be the effect of internet appliances on the
cellphone market?
There would be different devices for accessing the net ?
hand-portables for voice, data terminals with GPRS access,
laptops with radio connections, all these multitude technologies
would have our technology embedded in them.
How fast is the mobile cellular phone market growing in
Asia? What percentage of Nokia's total revenues in ?99
came from the Asia Pacific region?
In ?99, Nokia's net sales amounted to approximately $19.9bn of
which the Asia-Pacific region, including India, accounted for 22
per cent. The wireless communications markets are growing
rapidly in all regions of the world and Asia is no exception to this
trend.
Overall, the mobile phone market grew at a rate of more than 60
per cent globally last year. In ?99, approximately 275m phones
were sold compared to 168m phones sold in ?98. In terms of
mobile phone subscribers, in ?99 there were over 475m people
using mobile phones world-wide, an increase of more than 50 per
cent over the previous year. Although the rate of adoption of
mobile services differs somewhat across countries, the growth in
Asia very much follows the strong global cellular growth patterns.
How fast do you think will developing countries like India
adapt to the new technologies?
Nokia has been extremely pleased by the take-up of
sophisticated value-added services and technologies in India. For
example, India is leading the Asia-Pacific region in terms of the
implementation of smart messaging and mobile banking
services. As we look to the future, Nokia is confident that new
technologies such as GPRS and WAP will be implemented here
at the same time as elsewhere in Asia.
What are your projections for the growth of wireless
market in India?
At the end of ?99, there were around 1.6m mobile subscribers in
India, and the popularity of mobile phones is constantly
increasing. We are confident about the significant growth
potential in the wireless market in India as in other countries in
Asia. We anticipate that the market in India will grow
considerably from 2000 following the introduction of new services
and billing solutions, such as lower tariffs and the introduction of
Calling Party Pays.
Recently, India reconstituted and strengthened its
regulator. Do you think that it will help in attracting foreign
investment in the sector?
Nokia believes that clear policies which encourage deregulation
and open competition in markets speed up growth and contribute
to the long term growth of the industry, often bringing a wider
product range at more competitive prices to consumers in
general. Foreign investment is often driven by the overall size and
is generally promoted by policies that lead to stronger growth.
The new telecom Policy (NTP) permits more than two
cellular operators in one region. Do you think there is
enough market for more than two operators in a region in
a country like India. How many operators are permitted to
provide services in other countries in Asia Pacific?
Following the deregulation and liberalisation of the
telecommunications markets, the trend towards having multiple
mobile operators in one country has become very common.
Nokia's experience is that as markets are growing and mobile
penetration rates are increasing, even small countries can
generally support three or even four operators.
For example, in Finland, we currently have two nation-wide GSM
operators and one regional operator in a country of 5m
inhabitants. The number of operators is largely determined by the
stage of market development, as well as the local service and
capacity needs. In high penetration and high growth markets
such as Hong Kong today, we have about six operators.
For India, the new national telecom policy heralds great
opportunities for the telecom industry and the mobile customers.
In India, cellular handsets attract a total duty of over 50 per
cent. Is it justified in your opinion?
As mobile phones are essentially considered as primary
personal communications tools and therefore part of people's
everyday life, handsets often don't attract heavy duties. The
current rate of duty on handsets in India is no doubt one of the
highest in the world, and a reduction would naturally drive market
growth and services adoption.
A final question ? what makes Jorma Ollila tick?
The love for challenges and the energy of the young people in
Nokia. |
