1 © 2005 Nokia TKK Nokia YRaivio / / YR Research in Nokia Networks TKK T Technology Management in the Telecommunications Industry October 17th, 2006 Yrjö Raivio Principal System Specialist

2 © 2005 Nokia TKK Nokia YRaivio / / YR Outline Personal background & Research interests Research in Nokia Networks Strategy & Technology (S&T) Network Systems Research (NSR) Nokia Siemens Networks Conclusions

3 © 2005 Nokia TKK Nokia YRaivio / / YR Curriculum Vitae Nokia Networks Career path: SW engineerSDL, C Research Engineer Word Research ManagerWord, PPT Sr Research ManagerPPT, Excel Principal SpecialistExcel MSc from TKK/EE 1995 Postgraduate studies in TKK/CS from 01/2005 onwards

4 © 2005 Nokia TKK Nokia YRaivio / / YR

5 © 2005 Nokia TKK Nokia YRaivio / / YR Innovation Process – a new view: Open Innovation

6 © 2005 Nokia TKK Nokia YRaivio / / YR Demand Curve (C. Shapiro & H.R. Varian, 1999)

7 © 2005 Nokia TKK Nokia YRaivio / / YR The Long Tail (C. Anderson, 2004)

8 © 2005 Nokia TKK Nokia YRaivio / / YR Links Host Identity Protocol (HIP) – Internet Indirect Infrastructure (I3) – P2P - Distributed Hash Table (DHT) – WEB Services - Copyright vs. copyleft - (in Finnish) Open Source Software - Innovation management /TU phphttp:// /TU php Internet business - Internationalization - (in Finnish) Research Seminar on Telecom Business –

9 © 2005 Nokia TKK Nokia YRaivio / / YR Research in Nokia Networks

10 © 2005 Nokia TKK Nokia YRaivio / / YR Nokia structure Business Groups Horizontal Groups Technology Platforms Brand and design Developer support Research and venturing Business infrastructure Customer and Market Operations Mobile Phones Multimedia Enterprise Solutions Networks Corporate Functions

11 © 2005 Nokia TKK Nokia YRaivio / / YR Delivery Operations Networks / S Beresford-Wylie F&C; Strategy and Technology Unit ; Quality; Legal; HR; Communications. Customer & Market Operations Core Networks Radio Networks Services North America Latin America APACChinaCEMEAVodafoneWEWE Networks organization as of 1 July 2006

12 © 2005 Nokia TKK Nokia YRaivio / / YR Strategy & Technology mission Strategy & Technology’s mission is to add Nokia and customer value by driving NET strategic renewal World-class system competence Efficient support operations in increasing dialogue with customers.

13 © 2005 Nokia TKK Nokia YRaivio / / YR What do we do in Strategy & Technology? Run NET-wide strategies & strategy initiatives Ensure access to new technologies and competitive E2E-system functionalities Drive new business initiatives Provide efficient support for NET product creation and team operations Drive standards, regulation, IPR and environmental initiatives Research IPR Standardization

14 © 2005 Nokia TKK Nokia YRaivio / / YR Research roles NRC Time to market, Long  Short Technology risk, Higher  Lower Business risk, Higher  Lower Weight varies due to business situation R-milestones, B-milestones, E-milestones S&T NET BUs

15 © 2005 Nokia TKK Nokia YRaivio / / YR Network Systems Research – part of the S&T NSR drives renewal through systems research in order to strengthen Nokia Network’s position in its current business, and to expand into new business areas Mainstream research in current Business areas Scouting and new research topics

16 © 2005 Nokia TKK Nokia YRaivio / / YR What do we do in NSR? NSR is a part of technology unit in NET/S&T organization focusing to network systems research Our research is related to radio and core networks, and operation and automation We do scouting for new technologies, research on new and disruptive ideas, research on mainstreams technologies and create content to standardization We have cooperation with external organizations (universities, research institutes, operators’ R&D centers, …) We have close cooperation with NRC and with Nokia Business Units Our customers are e.g. product programs and management, road mapping, marketing, …

17 © 2005 Nokia TKK Nokia YRaivio / / YR Nokia Siemens Networks

18 © 2005 Nokia TKK Nokia YRaivio / / YR A new industry leader Creation of major “top three” telecom company Nokia’s Networks Business Group Siemens’ operator/carrier related business for fixed and mobile Company name: Nokia Siemens Networks partnership Shared vision and values Appointed CEO Simon Beresford-Wylie Appointed CFO Peter Schönhofer Operational headquarters in Helsinki, Finland (registered in the Netherlands) Finalization of the contract and regulatory approvals expected by year-end 2006 The financial results of Nokia Siemens Networks will be consolidated by Nokia

19 © 2005 Nokia TKK Nokia YRaivio / / YR A new leader with scale to win * Excludes Thales and enterprise business ** Unaudited calendarised numbers Carrier Business, 2005 Revenues (€ Bn) Alcatel & Lucent* Ericsson & Marconi Nokia Siemens Networks** NortelCiscoNECMotorolaHuawei

20 © 2005 Nokia TKK Nokia YRaivio / / YR Some issues Transaction subject to clearance by antitrust authorities (from EU ~ ) Cost synergies of primarily from elimination of overlapping functions consolidation and better utilization of sales and marketing organizations reduction of overhead costs sourcing benefits greater efficiencies in R&D 10-15% adjustment estimated over the next four years out of the initial combined employee base of 60,000

21 © 2005 Nokia TKK Nokia YRaivio / / YR Conclusions Telecommunications industry has big challenges ahead Bit pipe is becoming commodity – radical thinking needed Open Innovation must be taken seriously Customer relations are an advantage Research gives an excellent background for the career “Research career” = C, C++, Word, PPT, Excel Do not forget post graduate studies

22 © 2005 Nokia TKK Nokia YRaivio / / YR Thank You! Any Questions?