After selling its mobile phone business to Microsoft, Nokia Corporation named New Delhi-born Rajeev Suri as its CEO and President in May this year. The appointment was seen as a reward for Suri's contribution in turning around Nokia's telecom networks business globally. He is now been entrusted with the task of charting out the future road map for brand Nokia which was until now known for its handsets. Suri replied to a wide ranging questions from Business Line via email including the fate of the phone manufacturing factory in Chennai, opportunities in India, new business areas for Nokia and the challenges ahead.
What would be your key focus areas in driving growth for Nokia going forward?
We believe Nokia and its businesses will be deeply embedded in a world where connectivity will expand massively, linking almost all people as well as hundreds of billions of physical objects, from cars, home appliances to wearables and industrial equipment. And where billions of objects are not just connected, but adaptive, intelligent and automated in ways that will improve our everyday lives.
We are focused on three businesses - Nokia Networks, HERE and Nokia Technologies - which invest in the technologies that are vital in this connected world. Each business is a leader in its respective field and has a clear strategy of targeting growth opportunities: Nokia Networks in mobile broadband, HERE in location intelligence and Nokia Technologies in driving innovation, which we and other companies can enjoy.
The transformation process which you had undertaken for Nokia Networks has paid off for the company. How do you see this being integrated with other businesses under you such as HERE?
Our goal is to optimize each of our three businesses in order to best enable them to meet their goals. Where it makes sense to do so, we will pursue shared opportunities between the businesses, but not at the expense of focus and discipline in each. Overall, our strategy is to build on these businesses in order to create long-term shareholder value.
Of course, in the world of technology, sitting still is not an option. In each of our businesses we will continue to transform to meet changing markets and business needs. I am sure that some of that transformation will involve best practices from Nokia Networks, just as it will utilize best practices from HERE and Nokia Technologies – and from outside the company as well.
How significant is the India operation for the new Nokia?
It is incredibly important for us. India has always been one of our key strategic markets - not only because of the loyal customers we had in our former mobile phones business but also because of our close relationships with telecom operators and customers in the mapping business. With over 16,000 direct and indirect employees, India is actually our biggest country in terms of the number of employees.
Pretty much every part of our business is represented in India. We work with – almost - all the leading telecom operators, and provide the networks that are used by 300 million subscribers. We also have one of India’s largest telecom equipment manufacturing facilities. Located in Chennai, it makes the entire product line including 4G technologies. Our R&D centre in Bangalore, with 4,000 researchers, who have filed several international patents, is one of Nokia’s biggest. This country is an important innovation hub for Nokia Networks, with two large global delivery centers - in Chennai and Noida - which service operators in 86 countries and manage over 250 million subscribers.
Take the case of the recent government’s vision of smart cities in India. Our HERE business already maps traffic lights, the real-time update and patterns of traffic, school zones, parking and several such elements of what a smart city requires for all major cities in India.
It is important to recognize that India is the third largest Internet market in the world, with over 200 million Internet users, and is expected to become the second largest by 2015. This growth will be primarily driven by mobile technology, particularly uptake of 3G data, which a Nokia study shows is growing well over 150% year on year. With smart phone penetration of 67 million rising at an impressive 52% per year, India is on the cusp of a technological revolution. With all of this, how could India not be incredibly important to us?
The new Government in India is focusing heavily on things like digital India, Smart cities, manufacturing clusters. Do you see a larger role for Nokia in these projects?
We are optimistic about India’s future under the new government. I personally see great potential in the ‘Digital India’ views and ideas. I believe this initiative will help India become a connected economy and address the various challenges that India faces at present, such as the limited reach of basic healthcare and education services. We are excited by these possibilities and very much plan to contribute wherever we can. As specialists in mobile broadband and one of the largest telecom equipment manufacturers in India, we are well placed to play a leading role.
Of course, to really tap the potential of Digital India and the recent “Make in India” call by the Prime Minister, the new government needs to move fast to address the regulatory and other issues that inhibit investment and job creation. Some of these issues are the creation of the previous government, but the new government has the opportunity to swiftly make things right, to the benefit of all.
Take the issue of the mobile phone factory that we still have in Chennai, which did not transfer to Microsoft. We don’t need that factory as we are no longer in the mobile phone business. We would like to sell it so India has an opportunity to have a strong mobile manufacturing ecosystem in place. Currently, however, we can’t do so as the factory has become entangled in a tax dispute – despite the fact that we have offered to put all the proceeds of a sale into an escrow account until the tax issue is resolved. While the new government did not create this situation, it is in their power to resolve it – and, we hope they do so before it is too late. Tax policy that does not include retroactive changes and that treats software sales in a way consistent with international norms would also be a very positive step.
In your first letter to Nokia employees you said the coming changes in technology will be as profound as the creation of the Internet. What are these changes you foresee?
We believe that over the coming years billions of connected devices will converge into intelligent systems with the potential to improve lives in a vast number of areas: time and availability, transportation and resource consumption, learning and work, health and wellness, and many more. Just one example is a car that tells your alarm clock to wake you up earlier than you'd set it for in order to avoid heavy traffic.
This new world of technology will require, firstly, connectivity capable of handling massive numbers of devices and exponential increases in data traffic, and, secondly, location services that seamlessly bridge the real and virtual worlds. Finally, this new world will require innovation, including in sensing, radio and low power technologies. Our vision is to be a leader over the long term in these areas.
As an Indian heading a global organization what would you like to say to managers and executives in this country who would want to try and emulate you?
During my recent visit in India, I met colleagues at our town hall and my message to them was to dare to dream big and to focus on the long term. As a growing and fast-moving company, we also need to keep the basic market realities in mind and to ensure that the business is lean and optimized for success.
Far be it from me to give lessons to others, but I am sure every manager would agree that it is important to have ambitious goals and the determination to achieve those goals.
How has India shaped Rajeev Suri the CEO and President of Nokia?
Even though I have lived abroad for a long time and I work for a global company, I still feel the connection to India very deeply. I like to think that some of the best of India remains in me. I can be focused and engaged – even driven – but humility is very important to me, both as a personal and a Nokia trait.
Are you looking at entering any new areas to leverage the consumer connect with brand Nokia?
Nokia started almost 150 years ago with just one paper mill. Over time we have repeatedly and successfully reinvented ourselves. We may not be the same Nokia of several years ago, but we are here, we are strong, and our brand is still extremely powerful. And, do we want to find ways to keep our brand in the hearts and minds of consumers? In short, absolutely yes and are already experimenting in some areas. To give just one example, we recently released a predictive launcher app on Android devices - Z launcher. The app got 100,000 activations in the beta stage itself. We have a lot of technology we can use to recreate the new Nokia on the B2B or even the B2C side through pilots, tests and learning from our experiences.
What headwinds/challenges do you see for Nokia over the next 1-2 years?
There are always challenges in a company such as ours that is present in more than 120 countries. The current Ebola crisis is just one example of such a challenge, and certainly I hope that situation becomes under control and that those who are ill are able to recover successfully.
Beyond that, I worry about the regulatory environment and whether governments around the world take the right steps to enable the billions and billions of (euros) needed to maintain investment in the networks that enable so many things – including overall economic growth. It is no secret that in recent years, there have been regulatory challenges here in India – but you are not alone. Europe, for example, is at risk of becoming a mobile network backwater as regulators struggle to create a regulatory environment that drives ongoing network investments.