@MWC: NSN exec says network needs to keep pace with traffic explosion: 'In Canada, we nailed it'

BARCELONA – Nokia Siemens Networks took the opportunity at Mobile World Congress this morning to put its relatively new CEO Rajeev Suri in front of press and analysts to give an update on its latest customer wins and strategy.
Repeating a regular theme at this year’s event, Suri wasted no time in admitting the tough year NSN went through in 2009. And yet, like any top executive worth his or her salary, Suri spun that the company’s disappointing fourth-quarter results into good news and optimism for the road ahead.
“We are relentlessly driving growth,” Suri said. “We brought our break-even point much lower than in the past” and are “continuing to optimize our cost structure.”
Financial realities aside, Suri said he and his team are particularly focused on what he referred to as the “smart device challenge,” namely their impact on wireless networks. While speed is important, Suri is convinced that operators will soon move away from marketing the speed of their networks and get deeper into customer experience.
“The whole network dimension has got a whole new life … It’s something we want our company to form around,” he said, adding that customers want more than to just talk to a technology vendor. “It’s very much about a customer-powered focused organization.”
As expected, a good portion of Suri’s presentation centered around Long Term Evolution (LTE) technology, as he rattled off a handful of LTE “firsts,” like a handoff, voice call, interoperation and more.
When asked about NSN’s North American prospects after AT&T Mobility and Verizon Wireless’ recent LTE contracts with competing infrastructure vendors, Suri said NSN is still in the running for future contracts with those carriers as they move on to their second phase and beyond.
“We are growing in North America. We’re small, but we’re growing. In Canada, we’ve nailed it,” he said.
While LTE networks are being designed and built in North America, Japan and the Nordic countries right now, Suri said he doesn’t expect European operators to jump on board until 2011.
In the mean time, the challenge for “smart devices” and wireless carriers is two-fold. Not only will network traffic continue to explode as a result of the rise of smartphones, but the traditional response to network overload makes no business sense going forward, Suri said.
“The industry cannot just hope to a add capacity on top of capacity … on the same cost structure as before because the costs are increasing” and the price of data is staying the same, he added.
To put into perspective just how much traffic a single smartphone user can pull from a network, Suri said the average YouTube clip, when downloaded to a device, is the equivalent of sending 500,000 text messages.
“By 2015, the rest of the iceberg will be 100% squarely on us,” he said. By then, projections call for mobile voice to increase by 50%, laptop data to increase by 1,000% and “smart device” data to increase by 10,000%.
All those ones and zeros add up to 23 exabytes of data per year or the equivalent of 6.3 billion people (the world’s population) downloading a digital book every single day, Suri explained.
At last year’s Mobile World Congress, NSN said it expects data revenues to increase threefold by 2015, but that growth doesn’t even come close to matching the projected traffic increase over that same period.
And it’s not just about traffic alone, it’s also about signaling, which generates absolutely no revenue for the operator. If some vendors continue as they have with signaling technology, the signaling load will bring many networks to a grinding halt.
By implementing the paging channel feature embedded in NSN’s equipment (based on the 3GPP standard), operators can reduce the overall signaling load by a factor of three, which would add up to tens of millions of dollars in savings, Suri said.
Matt Kapko can be reached at [email protected].