Nortel sees a mobile subscription boom ahead

As Vice President of Mobility at Nortel Networks Asia, Jean-Luc Jezouin ensures that wireless Internet solutions evolve according to their requirements. With the firm belief that traditional revenues in selling airtime for voice traffic will decline, Jezouin is convinced that this paves the way for an increase in wireless subscribers - particularly in China.

Jean-Luc JezouinAs Vice President of Mobility at Nortel Networks Asia, Jean-Luc Jezouin ensures that wireless Internet solutions evolve according to their requirements. With the firm belief that traditional revenues in selling airtime for voice traffic will decline, Jezouin is convinced that this paves the way for an increase in wireless subscribers - particularly in China.

3G is the hottest buzzword now. What's Nortel's role in launching third generation networks?
Nortel Networks is already achieving significant momentum in supplying 3G solutions. We aim to play a significant role in building next-generation, high-performance 3G infrastructure for the provision of profitable anytime, anywhere Wireless Internet services.

In Europe, Nortel Networks is winning contracts with the biggest and most respected operators in the business - e.g. Deutsche Telekom, BT, Vodafone. The same is happening in the North America, where agreements have been reached with customers including AT&T.

In Asia, offering 3G services remains the goal of telecom companies, carriers and service providers. Leveraging [on] current GSM, GPRS, 1xRTT, TDMA, CDMA 2G/2.5G wireless technologies, Nortel Networks is helping these customers migrate existing networks to 3G.

Nortel Networks' end-to-end 3G solutions address head-on the industry's leading obstacle - operator profit - by leveraging our expertise in IP (internet protocol) and optical networking, and alliances with best-of-breed applications and device providers.

Nortel Networks has already helped hundreds of customers build the high performance Internet. Now we're helping them unleash the potential to profit from the Internet. We're doing this by creating and delivering best in class solutions. For example:

-Based on Nortel Networks e-mobility Internet Base Stations (iBTS) for wide area coverage, packet-based networks featuring the Passport 15000, Preside, Shasta and Alteon solutions, carriers can increase network capacity, provide flexible services and media gateway functionality, and deliver unique service offerings
- The e-mobility iBTS delivers ten times the capacity of today's typical base station and reduces operation costs by enabling 'mix and match' of 2G (GSM, TDMA, CDMA) and 3G (UMTS, EDGE, cdma2000) technologies

In terms of revenue sources, what's likely to change in light of the changing telecom industry?
The traditional revenue stream for operators - selling airtime for voice traffic - is shrinking and prices will continue to fall as airtime is commoditised. With Goldman Sachs Investment Research Service forecasting wireless subscribers to exceed 500 million by 2003, service providers must move fast to avoid being relegated to the role of pipeline providers for other's revenue-generating services.

The company is enabling a suite of applications that go beyond voice and that provide a foundation for new revenue generation for service providers:

- Services include streaming video, mobile commerce, location-based information, mobile office applications, and secure connections to Wireless VPNs
- Data has not been integrated as a Wireless application, creating a major opportunity to drive new revenue streams
- Applications help to deliver the profitable Wireless Internet by increasing average revenue per user; leveraging capital investment in core and infrastructure; and reducing subscriber turnover/attracting new subscribers

How is Nortel Networks planning to cash in on this trend?
Nortel Networks has already seen a strong demand for its Wireless Internet, 3G and Optical Internet solutions:

- Nortel Networks ranks number one in next-generation Wireless Internet infrastructure business strategy, according to The Shosteck Group (2000 and 2001) and the Yankee Group (1999)
- Nortel Networks rose to the number one position in the global telecommunications equipment market in 2000 with year-over-year growth of 41.6 percent, according to a study by Gartner Group Dataquest
- Nortel Networks has won more market share in the Wireless Internet arena than any competitor over the last three years, according to Merrill Lynch (2001) and has announced new wireless contracts estimated to be worth in excess of US$2.1 billion since January 2000

Asia is already building up some momentum. Is there any advantages in this for Nortel?
Nortel Networks aims to continue the positive momentum in Asia by working closely with customers to identify solutions that extend their competitive advantage and enhance their business performance for their respective markets.

We will utilise our expertise in the various leadership categories - Optical Internet and Wireless Internet - and build the infrastructure necessary for our customers to compete in the fiercely contested market.

What are some of the services or products that Nortel Networks is implementing/introducing in the next 12 months?

We are looking to expand significantly in Asia to all key markets this year. One key market is China. In the coming years, we believe the mainland will see a very great expansion in the number of Internet and mobile phone users.

In addition, the country is undergoing continual deregulation of its telecom infrastructure and may enter the World Trade Organisation soon. Nortel Networks is very bullish on the China market for our Optical and Wireless Internet initiatives, and we plan to continue building on our already positive momentum in that market.

We will take Optical Internet and extend its leadership in the optical backbone to metropolitan areas. At the heart of the metropolitan networks is Optical Ethernet, a new technology that combines the power of Optical and utility of Ethernet. Nortel Networks Optical Ethernet solution eliminates bottlenecks in the metro optical space, opening up a host of new uses for the network, creating new services for service providers and new ways of doing business for enterprises.

How does Asia compare to Europe?

In terms of regions, Europe is leading in the deployment of 3G networks and we can expect to see operational networks in the beginning of 2002. Asia is expected to follow shortly thereafter with deployment expected towards the end of 2002.

More about Top 20 Telecoms' Outlook.

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