Q&A: Markus Borchert, SVP of market Europe, Nokia Networks
Markus Borchert was appointed SVP of market Europe at Nokia Networks in April. He talks to Capacity about the company’s latest data centre and cloud solutions as well as its acquisition of Alcatel-Lucent.
How does Nokia’s AirFrame data centre service help operators move to a cloud-based architecture?
The stringent requirements imposed by telco applications are fundamentally different and much stricter than what we usually have on the traditional IT domain. Topics like latency and processing power are extremely important for telco applications. To deliver on the telco requirements we will need a more distributed architecture compared to traditional IT clouds. We need to move processing power closer to where the traffic is, something that cannot be achieved with a centralised approach that is common within IT.
The solutions for the merged telco IT domain have to also be ready to serve the future requirements for telco networks, i.e. provide even lower latency and higher processing power to deal with new technologies and applications like 5G and IoT. Nokia is addressing this new market, generated by the merged Telco and IT domains, not as a direct attack on any IT player as this is not a pure IT play. This is a new market and we got there first.
How has Nokia expanded its telco cloud portfolio this year?
Operator engagement with our Radio Cloud architecture continues to grow as we further prove the concepts within the cloud portfolio expansion introduced at MWC15. Operators are very intrigued with our unique approach that bridges the gap between today’s distributed Heterogeneous Networks and tomorrow’s full cloud deployments.
Nokia Radio Cloud separates coverage from capacity, so peak hour capacity can be allocated where and when needed, to reduce the need to dimension for peak hours and to make more efficient use of radio resources. We are actively working with the leading operators in the Cloud RAN space to deliver a multilayer architecture and support multiple fronthaul types including Ethernet. Since the Nokia Radio Cloud supports multiple deployment scenarios including centralised radio cloud or distributed radio cloud or any combination, operators are learning with us how to optimise performance by enabling basic capacity to be built near cell sites so that peak capacity can be handled by having the data centres redirect resources to follow traffic demand.
Our services teams are already working with operators, taking advantage of our Cloudwise services to quantify the benefits of candidate technologies that solve issues around capacity, user experience, and new services and revenue streams.
We are providing a quantifiable, detailed view to not only provide the quantifiable benefits of Radio Cloud but also to lay the foundation for the operator business case and formulate a strategy and make the correct decisions as they deploy cloud technologies into their radio network.
How will the merger of Nokia and Alcatel-Lucent strengthen its offerings in cloud and data centre solutions for telecoms operators?
The combination of Nokia and Alcatel-Lucent will create a European champion and innovation leader in next generation technology and services for an IP connected world. The deal represents the most compelling path forward to achieving the long-term strategic vision that Nokia laid out in its 10-year strategy to be a global technology leader in the Programmable World and helps accelerate that process.
The combination is expected to create an end-to-end portfolio scope and scale player with leading global positions across software, products and services – combining complementary offerings, customers and geographic footprint. Together we will have unparalleled innovation capabilities with Alcatel Lucent’s iconic Bell Labs, Nokia’s FutureWorks as well as Nokia Technologies, which will stay as a separate entity with a clear focus on licensing and the incubation of new technologies. Together we will have a massive R&D capacity, with a spend of €4.7bn and more than 40,000 R&D employees.
This deal creates a company with a combined market cap of around €45 billion and a revenue base of around €26 billion. We will have the size, influence and expertise to drive transformation change across the ecosystem. We are not in a position to say more at this stage as the deal is expected to close in the first half of 2016 at the earliest.
What are your strategic priorities for Europe in the next 12 months?
Europe is, and has always been, a true innovation powerhouse in mobile communications. This continent has brought the incredible revolution of GSM mobile telephony to the world as the first truly global telecoms standard. Europe also played a dominant role in 3G, but when it comes to 4G, we have seen a stronger momentum in other parts of the world in the past years.
Coming from China I see a lot of potential for Europe to gain that leadership role again and it is my clear priority to support this goal with Nokia’s innovation power. Looking also beyond the next 12 months there are three main building blocks to this. Firstly, we need quicker, more harmonised and affordable spectrum to meet the services capacity and coverage needs of 4G and 5G.
Secondly, net neutrality legislation should allow operator innovation with specialised services, which will be a key for 5G. This is a necessary condition for societal innovations such as remote health care or self-driving cars. Specialised services, together with proper traffic management, incentivise optimum capacity rollout.
Thirdly, we need to create an environment that stimulates investment and innovation in the telecoms industry. As we are moving towards Industry 4.0, IoT or the Programmable world, this will be critical for the competitiveness of most industries in Europe.