Q&A: NSN CEO, ex-CEO stress importance of US, services

On Oct. 1 Nokia Siemens Networks (NYSE:NOK, NYSE:SI) CEO Simon Beresford-Wylie stepped down after guiding NSN through its first three years as a new entity. While Beresford-Wylie will stay on until the end of the month to ensure a smooth transition, head of NSN service’s business Rajeev Suri has taken up the CEO mantle. During a recent visit to North America, the two CEOs agreed to an interview with TelephonyOnline and Connected Planet, discussing both NSN’s past and its future. They explained the importance of North America in the global 4G race and the evolution of NSN from an infrastructure-only vendor to one driven largely by services. They addressed NSN’s failed bid for Nortel’s wireless assets and their efforts to grow NSN’s North American presence organically. And they evaluated the NSN of today, almost three years after its birth, both competitively and culturally.

To Beresford-Wylie: Why are you leaving?

Beresford-Wylie: There’s not really any more to it than what I’ve been sharing with our own people. I’ve been in the sector for 27 years. I joined Telstra in November of 1982. Back then there were about 350 million fixed-line phones around the world. Today there are more than 4 billion connected. Back then, in Australia at least, the big innovation was we were replacing dial phones with pushbutton phones. Back then, a big innovation was the Telex machines we sold that came with green screens and 50-character memory. The point here is that I’ve been around for a long time. The second thing is I’ve been on the road for 14 years. I left Australia in ’95, moved to Calcutta in India, from there to Singapore, from Singapore to New Delhi, from New Delhi to England, from England to Singapore, from Singapore to Finland. When I moved to Helsinki five years ago I said to Jorma Ollila, who was the CEO of Nokia at that time, and to my wife that I’m coming here for five years—it won’t be more; it won’t be less. Remarkably five years has passed. … It is time for me to move on, because of the length of time I’ve spent in the sector and I need to make good on the promise I made to my wife.

In the three years you have been NSN’s CEO, did you accomplish everything you wanted to?

Beresford-Wylie: No I don’t feel I’ve accomplished everything I wanted to accomplish, but that’s life. When we announced this merger back in January of 2006, the world was very different, in terms of the global economy, first, and secondly in the nature of the telecoms market, which was growing. Our operator customers were in extremely good growth then, and of course the competitive landscape was different. None of us, frankly, had any experience in a merger or integration of this size and complexity. But I think as we look back we feel we’ve done quite a good job in putting together two companies that were in many ways similar and in many ways different. In that sense: mission accomplished.

From a financial performance perspective--from which a CEO is clearly judged--I’m extremely unhappy with how particularly this year has played out. Moving toward the end of 2008, we were making good progress then ‘whammo!’ We had a number of effects on our business. On the other hand I’m proud we were able to put these two companies together and build quite a good culture and value set.

We’re at a point now where we’re transitioning. I feel very good about the services business—the bold decision we made to approach the services business differently from anyone else. We’re seeing all of the benefits of that now. As we look out to 2010 we face a different market landscape with a few new facts: the fact that the integration is behind us, the fact that restructuring is behind us, the fact that synergies have been captured. My face is very much the face of restructuring and integration. I think it is appropriate now to have someone that can build on the great success that Rajeev’s had in developing and leading our services business to take the company to its next phase.

Suri: We’re in the second phase which is a lot about renewal and transformation. Some elements of that transformation have been underway for the last year or two, but others we need to accelerate. One example of that is services, where we started with something like less than a third of our revenue. Now we’re at the 45% mark. There are other businesses that are possible growth engines, the potential of which we need to fully capture. There will be a strong focus on lead markets, these markets being North America, Japan, India and China. We will take the portfolio and build a business taking account the needs of these markets.