Pekka Lundmark, President and CEO of Nokia, share's Nokia's vision and strategy for the future of telecom with FNTV at MWC Barcelona. Watch now!
Steve Saunders:
Pekka, it's nice to meet you at long last. We keep on missing each other for 35 years in our industry.
Pekka Lundmark:
Great to meet you as well.
Steve Saunders:
First of all, congratulations on your tenure at Nokia. You have managed the company through a difficult time after the launch of 5G. You've just completed an incredible acquisition with Infinera. The stock prices rallied over the last 12 months. I have to ask you, why are you leaving now?
Pekka Lundmark:
Well, I mean it was a very difficult decision. And it's also a very personal decision, because I love this job and I love our customers, our employees, our products and everything. This is actually addictive, but the thing is that I've been listed company CEO for 23 years. That's 92 quarters. I do not want to stop working, but I want to work in a different capacity in the future, rather being a 24/7 CEO.
Steve Saunders:
I think that makes perfect sense. For me, the biggest story in our industry at the moment isn't a technology. It's the fact that people are starting to try to use those technologies in new ways to make money in different ways. Do you agree with that? And how is the telecom industry doing on that journey?
Pekka Lundmark:
What people often forget is that trusted connectivity underpins everything. Without that, we will not be able to reap the benefits of AI and cloud. And the service providers are in an absolute key position in all this, but they have an issue today. Most service providers are not doing very well financially. And that's why we see it's our mission to help them to monetize their network, to make it cloud-native, to automate the network functions and expose the network through APIs to application developers.
Steve Saunders:
That's Network as Code?
Pekka Lundmark:
That is our Network as Code platform, where we currently have over 50 partners and customers.
Steve Saunders:
What is the biggest differentiator between Nokia and those other competitors?
Pekka Lundmark:
One big differentiator, especially when you compare us to our European and American competitors, is that we are the only vendor that can be a trusted partner for connectivity in all network domains. Obviously, of course, we are a 5G incumbent, but we are much more than that. We are a key player in data centers, in switching, in routing. Now through the acquisition of Infinera, we are becoming a very large player in optical networks as well. 70% of US broadband connections run on Nokia technology and we are expanding to new domains outside of our traditional service provider customers.
Steve Saunders:
Industry 4.0, digital industrialization, it's a huge opportunity. How important is that to the future of Nokia? And when do you think that you will start to see the benefit of it?
Pekka Lundmark:
Industry 4.0, obviously has been a promise for a long time. I remember I got first excited about it already 20 years ago, and quite little has actually happened. But we have currently now over 850 private wireless and EDGE compute customers. And we have seen great use cases where customers have actually had 100% return on investment in just a couple of years after they started to build private network connectivity. So, we are big believers in this. And we believe that outside of our traditional service provider markets, this will be one of our major growth vectors going forward.
Steve Saunders:
You took some time off from Nokia to work in energy and also you ran a very large incumbent crane manufacturer. Do you think that's influenced your view of communications? Is that one of the reasons why you're the leader in private 5G networks?
Pekka Lundmark:
It has certainly influenced my thinking and also Nokia's thinking, because having worked in those customer industries has helped us to understand how big the productivity improvement potential through digitalization and through new generation of connectivity in those traditional industries is. And this is a significant opportunity for many parts of the world, including Europe, which has a strong industrial base, but where over 90% of the industrial data that is produced actually gets totally underutilized.
Steve Saunders:
This is the first year that the 6G standardization process begins. And in the next five years, we'll see 6G start to arrive. What it will be the value of 6G to our industry, do you think?
Pekka Lundmark:
It is definitely coming. And if for no other reason, data traffic will continue to grow because of AI, because of cloud services, because of new higher quality video, because of ARVR, because of many new applications like drones, et cetera. So, more capacity will be needed, so there will be a time in the next few years when the currently allocated frequencies will have run out and then new frequencies. This is an absolute key now in the network evolution. We need to make sure that new frequencies are allocated to these services. And when new frequencies come, everybody wants to continue to push down the cost per bit. And that's why new radio modulation technologies are needed.
We need to bring new generations of silicon to slash the cost of networking again by a factor of 10. So, that's what 6G will be all about. And then, of course, the faster speeds and super low latency will allow completely new real-time applications, real-time digital twins, real-time drone management, real-time situational awareness in many places in industrial applications, potentially military applications, et cetera.