We Are Committed To Boost Make In India: Sanjay Malik, Senior VP & Head of India Market, Nokia

The PLI scheme will enable more device, sensor, component manufacturers to come to India and that will drive the uptake of 5G, opening up new opportunities, says Sanjay Malik, Senior VP & Head of India Market, Nokia in this conversation with BW Businessworld’s Noor Fathima Warsia. 

Excerpts: 

The year 2021 has been good for Nokia so far. Please share a few highlights. Given the growing Indian business, what are the new possibilities that you see here? 

From a global perspective, Nokia had a very strong Q2, where we recorded 9 per cent YoY growth and a strong operating margin at around 12.8 per cent. We launched one of our flagship 5G products portfolio based on AirScale powered by ReefShark technology which provides high capacity, high power efficiency and OpEx efficiency. From India’s perspective, we now report it as one of the separate markets and we had 75 per cent YoY growth. On the way forward, India has taken important steps towards the 5G journey with trials. Making India 5G ready will drive business. It is already driving business and it will further pick up the momentum. 

How are you seeing these trials progressing? Can it be a game-changer for enterprises and telecom customers? 

Nokia is the only company that works with all four operators and has started working on the trials. From a technology perspective, it is coming up well. In one of the trials in the Airtel Mumbai network, we recorded about 1.2 Gbps throughput, which is as per the 5G technology promise. 5G is not a technology upgrade but also a transformation of the network. From a trial perspective, the equipment has been delivered and getting installed at various places. And we have been working with quite a few partners and India-specific use cases in mobile broadband, fixed broadband, industry 4.0, etc. 5G can be a game-changer. 5G will be the first wireless technology that will enable the connectivity of things and equipment. For large enterprises, which are distributed over India, this would be the new technology to provide con nectivity, high throughput and efficiency. From enterprises, I think it would be a game-changer and we would see quite a few new kinds of applications coming up. 

How about Vodafone Idea (VIL)? It’s one of your important customers and it has been a tough year for the company in India. 

We are a large partner of VIL and also have a leadership position there and across the telecom infrastructure segments. It’s a very strong partnership and at this moment we continue to do business with them including the 5G trials and we are supporting them during this crucial phase. 

Nokia filed for a Production Linked Incentive (PLI) scheme for telecom gear and network equipment. How do you think the scheme will impact 5G in India? This is a most welcome scheme that has come from the government for boosting local production and we are committed to boost ‘Make in India’ products. We are a large manufacturer in India anyway and even before the PLI scheme, we had a large manufacturing setup in Chennai, where we manufacture the radio equipment for India and even for global exports. So, our manufacturing here is not dependent upon the PLI, but it will surely give a further boost and we will look for the opportunity of bringing more products and solutions to be manufactured in India. This scheme will and enable more device, sensor, component manufacturers to come to India and that will help in the uptake of 5G here and also provide competitive prices for the devices. But at the same time, until the availability of components doesn’t improve, the government should not increase import duty or import tariffs of any of these components. The government has increased tariffs on some of these components that, in a way, is counterproductive to PLI. 

Nokia has seen its ups and downs in India and we also have new homegrown telecom vendors jumping into the Indian marketplace. Do you think this poses a threat to Nokia’s share of business here? 

It is visionary of the government to establish and drive Atmanirbhar Bharat, and yes, we would try to be more and more Atmanirbhar from Nokia perspective as well. Nokia has been in this kind of competition for a long time. We had many more global competitors at that time than what we have now. Nokia invests about 3 billion euros in research and development (R&D) and a significant effort is put in manufacturing these products as per the standards and keeping pace with the technology change. Manufacturing these products is not easy with that kind of R&D investments and global access to the market. With only the Indian market, the scale also would be much lesser from a business perspective. It’s not going to be easy and it is going to take time for products which are competitive to us.

How is a player like Nokia prepared to bring the radical revolution with 5G network next year? Does your preparedness resonate with the operators? 

We are working with all four operators to get their transport ready for 5G, getting their core network into the cloud. For example, on the core side, 95 per cent of the VoLTE calls are already going through the Nokia network. Nokia already manufactures 5G products in India and we are ready to satisfy the requirement from our Chennai factory itself whenever required. Also, we have a large R&D base in Bangalore along with a global delivery centre in Noida, where we are already managing the 5G deployment globally. We have about 1200 people working in GDC who are trained on 5G. I would say we are kind of most advanced in supporting the operators to launch 5G next year and bring on the 5G revolution.  

Let’s discuss Nokia’s India performance in context to 5G as compared to the other markets you are present in. Any highlights on that…

Nokia is already launching 5G globally in advanced countries. We have about 230 commercial 5G agreements globally, 175 commercial 5G deals and about 68 operators who launched 5G already. We are working with many operators to launch 5G in countries like the US, Japan and Korea. We saw a big success in data growth when we launched 4G in India and it would be the same story once 5G is launched here. From a connectivity perspective, India still has growing demand and I would say it would be a big success with 5G as well.

There has been a radical technology evolution in 2021 if we see 2020 as a tech revolution. How do you see this playing out in the market and some use cases for new tech? 

Mobile broadband will pick up because India has a supply line and it will create demand. That’s what we saw in 4G. 5G will complement the fixed broadband for working from home. Within 5G, features like network slicing provide a virtual network for different enterprises on a common network. With this kind of function, enterprises will get a much better quality of service and reliable connectivity. For Industry 4.0, we have private LTE at our Chennai factory resulting in higher productivity and efficiency. The Indian enterprise needs this kind of connectivity, which 5G is going to provide. To answer your question, I see the likes of telemedicine, Tele-education, AR, VR, becoming a priority. With a large customer base and a large demographic of India, these applications will definitely pick up and bring the next level of a digital revolution.