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00:00:53 SNEHIL GAMBHIR: Welcome to this edition of Nasscom, BCG's India Means Innovation podcast. We're excited today to have as my guest a technologist, a foodie, and a truly global citizen, Nishant Batra, who is the Chief strategy and technology officer for Nokia. Welcome Nishant through the podcast.
00:01:14 NISHANT BATRA: Very glad to be here. Thanks for having me.
00:01:16 SNEHIL GAMBHIR: Wonderful. So we're sitting today at the Nokia offices in Gurgaon, the knowledge and services hub for India. Let's maybe kick off the conversation, Nishant, with the broader view of how you see the global telecom industry evolving in the context of technological advancements and what major trends do you anticipate in the next decade?
00:01:40 NISHANT BATRA: You don't. One has to think of telecom in two different facets. There is tech that telecom uses and there is tech that telecom provides. So if you look at like every other industry, telecom feeds of tech like cloud computing. If you look at current telecom telecommunication, let's say start with terrestrial telecommunication networks, they were all built very bespoke, very, you know, verticalized. More and more they are getting horizontalized and cloud computing is pervasive for us as well. As such, you would see this in several industries, right? That is why you see huge cloud growth across the world. Another example, AI is also pervasive in telecom networks now. And when we talk about AI, we are really not talking about today, we are really not talking about the generative aspects of AI, but more classic AI and that is quite, you know, prevalent in telecommunication. So we have been early adopters of that and this will continue. So if you look at for until the rest of the decade, I think by the end of the decade, we will be a hunger for AI and cloud computing will only increase. From cloud computing perspective, today we are dependent on central large clouds more and more. This is moving towards the edge cloud and we can have a longer debate what the edge cloud really means. But from an AI perspective the classic AI hunger will not disappear, will only grow. For example, we talk about as we are defining standards for 6G, it is basically an AI driven interface versus a you know a rule based interface that we have today and so on South Forth. But we will also then adopt to generative AI aspects in telecommunications when it comes to use cases such as care, customer handling, etcetera, etcetera. And that is becoming more common now. But these two trends continue during the rest of the year. There is also a trend that we are also consumers and we also deliver is digital tuning for example, you know digital twins to occur you need to have very robust communications networks, but we are producing digital twins for our own consumption as well. So case in point, today for example, when at Nokia we are shipping a product, we are shipping it outer, for example, we ship it with a digital twin. So our customers then have an option to use the digital twin for fault analysis etcetera. We will see this digital twins then become network wide and essentially somebody sitting remotely should be able to have a real time quite transparent representation of a very complicated network somewhere else. So these technologies were adopting rather fast cloud computing, AI and some immersion using digital twinning. But then we are also at the same time, none of these three would be possible if there was number communications network.
00:04:42 SNEHIL GAMBHIR: Super. So cloud computing, AI, digital twinning and obviously the COMS protocols enable all that, right? So let's let's make it more applicable to what you see for Nokia. What is Nokia's technology vision for the future and and talk to me about what's literally around the corner and then what's a decade out?
00:05:05 NISHANT BATRA: You know, Nokia, we have a little bit of a unique situation and position in the in the comms world. We're not, we're not you know in one part of the network versus some of our competitors. We see basically if I were to list out our competitors, the list would be more than 200 because we play in the space of last mile wireless. We are market leaders in last mile wireline. We are also providing edge routing, point to point optical, you name it, right. And then huge presence in the software space as well lesser known that a lot of our patterns are used in any possible device that is in your pocket right now. So if you are using an Apple, Samsung, Oppo, we will, it is likely they are using some of our tech, right. So from our perspective, when we look at something that's around the corner, I think for now, from a wireless standpoint, 5G in most parts of the world will turn the corner to 5G advanced. And I'll explain in a second what that really means from a fixed line perspective. And we saw that in the pandemic. Let's take India as an example. It's quite common to have more than one connection at home. Almost everybody is upgrading that connection to gig and beyond. So that's just regular evolution of tech. Let's just say from a last mile perspective, 5G advance then offers a lot more option and opportunity to address more than the consumer, right? So far, 5G in India, for example, is mostly consumer driven, but it starts to offer a lot of opportunity. For example, side link, red cap, these features. I mean, for example, this device that you are all wearing would love to have 5G advanced features and so on. South Forth on the fixed side, it is really about multimodal fibers. It is about, you know, more robust connections to the hope. But this is just around the corner. This is just regular evolution. This is already on the road map, so to say. Then what we research on and research is a little bit more ambiguous because you start to look at a much wider, you know, your screen is much wider and then you select parts that you want to focus on. We have talked about some of those pervasive AI, cloud compute, but then from a pure connectivity standpoint, you also start to say that and there's a big debate in the industry, when will 6G arrive and will 6G be needed? I'm sure in your conversations you have had those with your clientele as well. And Nasscom probably thinks about that as well in in different ways. My view is very simple. The world will need 6G. If you look at traffic growth of 20 to 25%, at some point you will need something with more spectrum and higher spectral efficiency. So if there is more immersive use of networks, we will need 60. And so not around the corner, but towards the end of the decade we start to get into the era of 60. We start to get into the era of possibly 100 gig PON. We start to get into the era of edge computing, and this edge is important to define. This edge computing is not driven by the classic Helco. This edge is defined by the classic enterprise. For example, at Nokia, I have the responsibility for our digital efforts and IT efforts as well. I don't mean to put my edge on some of my workloads 300 miles away. I'll put it right next to where I need it, on the factory floor. Yeah. So my belief is that by the end of the decade, there will be huge amount of edge compute, a lot of workloads that we are today used to that go to the cloud and come back, we'll stay on the edge. So these these things I say will become commonplace by then.
00:09:03 SNEHIL GAMBHIR: And we'll come to that in a second, but let me jump to the next question. And I think I've heard you say, and I forgot where, but I'll quote you saying our tech stacks are complex and that makes us very slow. It is now time for us to simplify, elaborate on a bit on why and how this is a must do for driving innovation, both putting on your Nokia strategy hat but also putting on the hat from a strategic standpoint for the telecom industry in general.
00:09:34 NISHANT BATRA: So let's say in seven years from now, every operator is then not just monetizing that network through subscriptions, they're also doing it through API calls that enterprises use. Every slice is orchestrated at this time. The network is clearly becoming more than just one. Would you put several networks or would you create one simplified layer that you can offer to multiple? And I think that simplification is what we talk about. It's a very high level generic term, but every operator and it resonates with every customer I talk about. Yeah. And they say, yeah, actually, you know, when we started offering IoT, we put a different core just because we didn't want to impact our consumer core. Is it time to reconcile a little bit? Yeah, yes. So.
00:10:25 SNEHIL GAMBHIR: What you're saying is that the the immediate benefit obviously is cost to serve, but I think it helps drive eventually an ability to drive and improve new product introduction, maybe even rolling out and onboarding customers faster, sooner and as we move forward from an innovation angle and a time to market angle.
00:10:45 NISHANT BATRA: Right time to market and innovation you got.
00:10:47 SNEHIL GAMBHIR: I got it ], super. So you know, I guess when you're trying to advance the tech narrative, right? I'm assuming that there is a large focus you want to build in and not trying to solve for everything and to drive partnerships, right? Do you see that as a value added plate? Maybe give us a couple of examples of successful partnership from a Nokia lens that you think are worthy to these outline.
00:11:13 NISHANT BATRA: This one is a very good point and it's just not the partnerships that we aspire to. I think the entire tech world, whether it's telco, whether it's traditional software, whether it's silicon partnerships are the way to go because none of us can afford to have a fixed cost that spans everything. So there are some very, very obvious partnerships. I source my silicon from, you know, top silicon companies in the world. The foundry sits somewhere else. The substrate comes from these. These are supply chain partnerships that they exist, right? And you cannot survive without them. If you go back by the way, 30 years telecom OEM would even make their own screws that would go in the base station. Yeah, I don't think we do that anymore, right. So, but those are traditional supply chain core competence definitions and where you want to play and where you can't because the fixed cost in each component goes up now. But then there are partnerships for market addressable. We are from Nokia's perspective very dependent on the service provider market. For example, north of 80% of our top line comes from service provider. We want to expand in the enterprise, traditional enterprise, which is trillions of dollars where we have limited channel presence. We announced a partnership with Dell and we are a market leader today in private wireless, which is a nascent industry, but growing 40%. Yeah. Can I get access to that market through somebody already who has a fantastic channel into that market and is their complementarity around their partnership? So we announced that partnership with Dell and that's an example of where where where we can sort of, you know, use our product for something that is not today as widely used. Then there's a partnership for innovation. We announced the partnership, for example, here in India with Indian Institute of Sciences and they're helping us look at Indian use cases, they're helping us look at what can we do in terms of automation for 6G and so on and so forth together. So it is very clear it is now a core competence of good companies if they can have good collaborations and partnerships.
00:13:28 SNEHIL GAMBHIR: Super. Got it, got it. You know, you and I were talking before we started this about this report that BCG and Nasscom did called Vision 2030. Interestingly enough, the five mega trends that we highlighted in that report, and you touched upon few of them in the way you think of it, right? Or around digital engineering, around generative AI, around sustainability, the population and talent inversion, you know, in, in general, right? As a business leader who drives, you know, broadly strategy and and research, right for, for Nokia, what do you think are the possible additional contributions? You're looking at it from an India lens. You know, you have a very large India is an important market for you, both commercially and otherwise. But you know, when you look at the the mega trends that you think of or that you and I discussed earlier, you know, where is more room for India to play from a Nokia lens?
00:14:23 NISHANT BATRA: Yeah. And we had a good debate of about this offline as well. I mean, we, I get asked this question, what more can you do in II's, the largest service OPS country we have, it's one of the largest manufacturing locations we have. OK, good. It's also the largest R&D locations we have between Bangalore, Noida, Gurgaon. So we have done a lot. And to me now where India has proven its mettle in terms of talent and accessibility is the top of pyramid. Yeah. And over the years I have learned that is not just about offshoring for a cost arbitrage, which I think at Nokia we have done very well. Can we continue to do more of it? Yes, and that is why the Indian centres continue to grow in certain domains because there is a certain cost arbitrage. Everybody wants a great talent and a cheaper cost. But at the top of the pyramid, the talent is amazing and there is a lot of Indian students coming out of top schools, Tier 2 schools who want to stay in India. Now from my perspective, I want no care to offer that opportunity to that top talent.
00:15:36 SNEHIL GAMBHIR: Super super you know, one of the other mega trends I mentioned is sustainability, right? And obviously the history of humanity's progress is tied, you know, they directly and distinctly to our sustainability goals and our path in general to a net zero environment, right from a landscape of new energy. And you talked about silicon and talked about, you know, the consumption and you know, Gen. AI and and cloud compute, etc. What kind of investments and approaches to innovation are tied to being able to yet do it in a sustainable fashion, bringing us closer to making the planet a more, you know, ready place to to reckon and live with, you know, from a path to Net 0.
00:16:19 NISHANT BATRA: So I think there's a supply side, there's a demand side. Yeah, there's an impact side. It's important to be a triangle like this. We are the demand side. That's when we use diesel. We use other sources of energy. Our primary role as an innovator in the telecom industry is to reduce that demand. It's not easy. We have reduced that demand per bit quite significantly, massively per bit. Energy goes down from 2019 when the 1st 5G network was rolled to 2029 when the 1st 6G network is forecasted to be rolled out. If we meet our targets, we would have dropped the cost of energy per bit to 2% of what it was in the decade if we meet our targets and they're not easy to meet. So on a system level, we are responsible to make that effort. That's the demand side. There is a supply side. A lot of the base stations versus 10 years ago in India which were diesel powered are now using renewable sources of energy. There is also our responsibility to allow that innovation and supply side and both of them we own, there is an impact side and we actually call this our handprint.
00:17:41 SNEHIL GAMBHIR: Yeah.
00:17:41 NISHANT BATRA: Not our footprint. Our footprint is the demand side, correct. A handprint is when an industry, let's take an example of a mine that gets 35 productive 35% productivity and efficiency increase because they're using our tech, suddenly their footprint drops by a third because of the tech we produced. That's our impact. And we have started to measure this now actually quite actually in a very meticulous way because we've been measuring and saying how can we get the demand now? How can we get less cost of energy per bit? How can we get more renewable sources of energy? What are impact is very important now because there's tons of industry out there using our tech. If we can deploy that tech in a more efficient way for them. Food processing, one of the largest consumers of energy in the world, can we help them be more efficient with that? That's our handprint.
00:18:42 SNEHIL GAMBHIR: Got it. You know, maybe let's delve into a specific set of use cases. Right, There is this tag line I saw about R&D in particular for Nokia, right. I think it says in India, for India and the world is the tagline, right. So when you look at the journey that Nokia has been on from a from a delivery as well as from a research standpoint in India, right from moving from executing specific tasks to driving you know clear innovations. What are the R&D centric innovations that the India set of Nokia folks are truly leading now and where do you think some of the other areas they might want to or you foresee them taking a really a lead role in going forward?
00:19:27 NISHANT BATRA: Almost all of our portfolio has some presence of R&D in India. Yeah. Now that's on the product side, that's on the design side. And I talked about this earlier, the top of the pyramid sits with the research side. Can we get more of standardization? Can we get more of top and Bell Labs research here and offer, you know, offer those opportunities their top talent here? Yeah, great talent, good cost arbitrage, you know, great comms networks, works very efficiently. People have gotten used to it. But moving top and research here, I would like to pioneer that. I think we can do that, yeah.
00:20:07 SNEHIL GAMBHIR: I'm getting cues that we need to wrap up soon, so I'll try and keep a few questions and maybe request for some brief answers, right. You mentioned 6G, right? You know, what are the plans for Nokia from a 6G angle? How are things going? I know there's a 6G lab that's been set up in India. How is that coming along? Maybe a big brief bite in that.
00:20:30 NISHANT BATRA: 6G lab is up and set. We visited ISC 2 weeks ago. The partnership is fantastic there. Love the progress. 6G around the world ITU conference in December. We have the spectrum ready to be studied. It's a long journey. Now we're going to start conceptual research or we have started conceptual research. Standardization starts in a couple of years, spectrum to be allocated in 27 and the networks to be rolled out by the end of the decade. I think we're going to meet the timeline. It's not easy.
00:21:01 SNEHIL GAMBHIR: Super that that sounds very exciting similar very quick comment and we've touched upon and I know no conversation today is complete without Jenny. I right. So from a from a lens of how Nokia develops its products and services both from mobile networks, cloud and network services infra, you know, what's the adoption and the future of Gen. AI? Do we think we have just scratched the surface? Are we really far along? A quick bite in that too, please.
00:21:29 NISHANT BATRA: From an R&D perspective, we are already in thousands when we are now actually moving from trial to use of you know code assistant. And I'm very happy with the early speed we have picked up in the space on the Gen. AI for our customers. I think it's every product now is looking at how to, you know, get this language interpretation into some of our products and the natural language interface because of what I talked about ease of operations, etc.
00:22:10 SNEHIL GAMBHIR: You know, I would be remiss if I didn't get you to apply more broadly on the commercial side of the market as well, right? What's your view in general about the India telecom market from a commercial lens?
00:22:23 NISHANT BATRA: It's AI mean the market really peaked at the peak of the 50 rollouts for us now. And of course, the market since then slowed down. We are #1 in wireless, number one in optics, number one in core in the market. It's a very, very important market for us. It's a top three perpetually. So, I'm confident it will stay good for us.
00:22:45 SNEHIL GAMBHIR: Super. Let me end this podcast with a rapid fire. Maybe a fun fact kind of one word. Quick answer, Nishant, right? Favorite country to visit excluding India?
00:22:59 NISHANT BATRA: Austria.
00:23:00 SNEHIL GAMBHIR: Austria. OK, wonderful, favorite food to eat.
00:23:04 NISHANT BATRA: South Indian food.
00:23:05 SNEHIL GAMBHIR: South Indian food, Dosa? Super, and the favorite sport you follow.
00:23:11 NISHANT BATRA: Cricket.
00:23:12 SNEHIL GAMBHIR: Oh wow, still a cricket buff, huh?
00:23:13 NISHANT BATRA: Was at the India Pakistan game in New York.
00:23:16 SNEHIL GAMBHIR: Oh, my God. Awesome. Look, Nishanth, it's been a pleasure talking to you. I want to wish you and the Nokia team the very best in the innovation journey as you move forward. Thank you for being with us and great to meet you.
00:23:29 NISHANT BATRA: Same. Thank you, Snehil.
00:23:30 SNEHIL GAMBHIR: Thank you.
