Actively Promoting 3G -Continue Customer
Loyalty, Meeting Our Commitment
Provided by Nokia (China)
Nokia has proven many people wrong over the past 18-24 months. 2 years ago it was the view of the market that companies with Internet experience would be able to challenge the GSM leadership of Nokia. It would be an opportunity for them. That has not happened. What companies now realize is that Mobility is the main competence that is needed for success in the Mobile Internet and that is the greatest strength Nokia has. That is why we are winning business in GPRS and become the leader. Based on this success and its achievement in GSM, Nokia is confident to build on current GSM market share in WCDMA.
In 1997, Nokia predicted that by the end of 2005 there would be 1 billion mobile phone users. However in 1998, Nokia predicted this figure to 1 billion by 2003. Now prediction goes to that it may happen during the first half of 2002. Many of these terminals will be able to access the Mobile Internet. The UMTS forum estimates that by 2010 there will be almost 3 billion cellular subscribers.
And Nokia doesn't only supply the technology but use it itself. Most companies have their own Intranet. Many have their corporate phone book accessible from the desktop PC. Some can access that phone book while out of the office from a laptop via their GSM phone. Few can access that phone book directly from their Mobile Phone can read and deal with their e-mail from their mobile phone. Nokia uses its own technology and solutions and already started to integrate the first 3G like services to every day business life. Nokia is not only creating the Mobile Internet future, but testing it first in its own live corporate environment.
Nokia is becoming more widely recognized as a network supplier.
The 3G War
The race has just started. Network suppliers have just left the starting grid in 3G and it will be at least 12 months before anyone can claim leadership and at the end of the day it will be 3G volume delivery capability that decides the winners. Nokia is aiming for over 35% market share. Nokia has won and delivered over 50 GPRS networks and over 10 GPRS networks have been in commercial operation today, with over 100 GSM customers globally. Nokia consistently meets its commitments and delivers better than any other GSM vendor in the industry. Nokia has a strong position in 3G with 10 references in 2000 and some confidence that can build on these. In the past, it had been added three major operator references in Orange/France Telecom, Telefonica, later in the US with AT&T Wireless Services. At the beginning of 2001, Telia, the leading Nordic telecom operator, NetCom, a leading Norwegian mobile operator, and ONE, the only mobile operator offering GPRS and HSCSD in Austria, have chosen Nokia as supplier of their 3G network. Further more, Chunghwa Telecom Labs (CHTTL), the technology development group of the state-owned telecommunication operator in Taiwan, has selected Nokia to conduct its 3rd Generation (3G) trials.
The stakes are high and no operator can afford to take the risk that their supplier cannot deliver according to its agreements. Nokia recognized the demands that operators would be placing on it over 2 years ago and has been building its manufacturing, delivery, and local area organizations in order to be the only company that is perfectly placed to quickly roll out the first WCDMA networks in 2001. Nokia has 5,300 highly trained people around the world.
They have turnkey competence and fast roll-out experience to make 3G a success for its customers. Nokia has further strengthened network implementation capabilities by selecting four internationally recognized companies ABB, Bovis Lend Lease, MKI and Wireless Facilities Inc. as main partners for turnkey implementation of 3G and GSM networks in Europe, Middle East and Africa. The Yankee Group in a recent market report believes that these alliances will enable Nokia to attract new business as it seeks to expand its global market share in 2G and 3G network deployments.
Critical Factors for Success
Nokia believes knowledge of Mobility is crucial. Mobility will change the Internet. Mobile users are willing to pay for relevant content. Content is free in the Internet but often difficult to find. If content providers can get paid for supplying mobile content this is what they will focus on - not free Internet content.
The Mobile Operator is the only company that can invoice for micro-payments since they have the billing infrastructure in place to do this. This is their strongest card in 3G. In 3G new data services will be based on Messaging, Entertainment, Location and mCommerce and this is where our initial service creation is focusing.
Nokia carries out extensive research not only on users' wants and needs but also on the market as a whole. This research is shared with our customers so that we can create a leading win-win situation.
Nokia is the first company to bring to market products like mPlatform and mCatch that will enable the Mobile Internet. We are working closely with application developer companies all over the world and closely partnering with some to bring early applications to market. So Nokia will ensure that all the elements will be in place to create an experience that not only meets user expectations but exceeds them.
The Operator As a Retailer
We all recognize that the future user and the future operator are nothing like the users or operators that we see today. User needs and expectations are growing every day and operator capabilities to deliver to those needs have to keep pace otherwise operator will be in danger of alienating customer base. Operators have to consider themselves as retailers where they have a supermarket or 3G Hypermarket business outlook. We are moving from a high revenue service to a situation where operators have many low revenue services. Operators have to create a killer cocktail of services that is personalized and relevant to me.
What I want.
The operator is moving from an organization that is focused on creating the best and most efficient and technically superior network, to an organization that needs to create the most exciting user experience in the industry. This will be a challenge since it requires not only a mentality change by also an organizational change. Things like brand, positioning, distribution channels, bundling of services, billing strategies, customer care processes, customer profiling and content creation internally and with partners will become synonymous with success. This will be a radical change in the business and we cannot wait until 3G changes. We have to start today by learning how new packet data services will be used by subscribers, which ones work and which ones don't. This is why Nokia is already creating new services like FriendsTalk to move the market one more step towards the direction of 3G.
mPlatform will be the product that is used to build trusted mobile portals in a network independent environment where developers can seamlessly create their applications. New Mobile Content can be presented, managed and then distributed with the QoS that is needed.
All these will integrate to things like billing, charging and provisioning of the services so that full end-to-end support is provided. Once this is in place operators can start to create the new user experiences that are going to drive usage of packet data.
The first major service that all operators recognize as being a high revenue service is Multimedia Messaging. This will evolve from the greatly successful SMS service we have today. In September 2000, 10 billion messages were globally sent over GSM networks.
That's almost 4,000 messages a second for every hour of every day in that month. As picture messaging evolves we believe we will see the same growth curve for Multimedia Messaging as we are seeing in SMS today.
Strategic Mobile Internet Architecture
Nokia is moving towards a more Internet looking architecture based on servers, routers, IP switches and gateways that manage the interfaces between the different building blocks.
This will enable cost savings for customers as Nokia create more standardized products and also some speciality products that manage the Mobility and Internet aspects of the network.
Nokia has recognized how complex future architectures could become. How complex things like billing, operational management, service creation and Customer Relationship Management will be in 3G. We also have to make it as simple as possible for operators to enable or facilitate content and service creation and then deliver this to users as cost effectively as possible. It is not as simple as it seems and current Internet competencies will not be enough to ensure success. Nokia has the service creation platforms in place today so that operator can start to change user behavior. Nokia is developing one of the most cost efficient delivery network architectures ever seen. Based on IP and open standards we intend to drive down costs without compromising network quality because people will not accept a reduction in service.
Nokia has been working with most of the 3G operators on their business cases using what we consider to be the most comprehensive business model in the industry. That's not just our opinion, it's the opinion of many of our customers as well.
Nokia does extensive research to validate its strategy and adapt its business structures as needed. These detailed results we share with customers proves that this business is going to be greatly profitable for operators if they adopt a user and retailer strategy. Mobile operators have unique advantages like billing and location knowledge that they have to exploit to be winners. Nokia for its part will provide all the components that are vital to make the market, like incubating the developer community, bringing the first applications to market, driving costs out of hardware, reducing the investments needed to deploy 3G networks, making end to end network management efficient and providing the advanced packet data billing solutions so that operators can make money faster and faster.
Meeting Commitments
The first release of WCDMA will still rely on circuit switched technology. That means that voice will be the same in 3G as it is in 2G today. We will reuse the GPRS core network in 3G and enhance it as the standards develop so that there is a steady transition towards more and more packet data in the network and even voice will eventually be packetized as IP Telephony becomes a reality. This will not happen overnight and there will still be a need for circuit switched components in the network.
Timing will be everything in 3G. The networks have to be in place early so that validations can be performed. Integration and multi-vendor testing has to be planned and executed.
GSM-3G-GSM handover has to be in place since people will not use a service that offers a reduction in the Quality of Service they are currently experiencing.
Next year we will see the rapid growth of GPRS and the first 3G deliveries with open standards in the 1H 2001. Large-scale volume deliveries will start in 2H as we move into volume production. Mass-market commercial launch of 3G networks will be in 2002 and this is when 3G really starts to fly. To make that happens, Nokia says, "we have to deliver on our promises". |
