VanillaPlus.com

(Talking Heads:)

Exclusive Interview with = Nexus=20 Telecom's Thomas Sutter and Alain Giger

Shifting = dynamics:
dynamic=20 shifts

Here Thomas Sutter, = managing=20 director of Nexus Wireless Network Solutions and Alain Giger, =
managing=20 director of Nexus System Solutions,
reveal their insights into = the=20 current state of play
in the market to VanillaPlus editor = George=20 Malim,
and discuss how the latest wave of carrier - and vendor = -=20 consolidation could create as many opportunities as it does = challenges for=20 vendors systems.

Prior = to=20 joining Nexus, Sutter was chief executive
of P-Net AG, a = solution=20 integrator for service management solutions serving the Swiss = market.=20
He has spent his entire career involved with OSS solutions for = telecom=20 networks, having worked in several departments of Siemens AG. =

Giger has also been = involved in the IT=20 and
telecoms industry for nearly 20 years. Prior to =
joining Nexus=20 in 2003, he was chief executive
of Swisscom France and Belgium = and=20 managed
the IP start-up Nextra in France and west =
Switzerland.=20

VanillaPlus (VP): Nexus Telecom has been in the = market=20 for over a decade. How have the radical strategic and = technological shifts=20 of the last decade of telecommunications affected the way OSS/BSS=20 procurement decisions are made?

Thomas Sutter: During this decade there have = been a lot=20 of dynamics in the market. If you look at the development of Nexus = we've=20 had continuous growth of about 30% in the last four years. In the = years=20 before the big blow-out we were quite conservative so when the big = bang=20 came we were prepared to continue.

Alain Giger: At the very beginning of Nexus, = the=20 competition was not that hard. Each vendor had one or two top = customers=20 who were focused on one or two systems. In the last two years = there has=20 been a radical change and the market is now very open and very=20 competitive. There are many more products and companies in the = market than=20 in the beginning when we had a few customers with very good = relationships.=20 We now have much more customers and much more competition.

VP: The new telecoms arena is increasingly = dependent on=20 service assurance. Complex new services such as mobile content and = triple-play require an increased focus on quality of service. How = do=20 Nexus' products help carriers deliver on their service = promises?

TS: The critical point in service monitoring, = especially=20 with new services, is that you need a very sound basis. The = foundation of=20 the product is critical because if you can't get all the data from = all the=20 [network] parts its not possible to do end-to-end service = monitoring.=20 Whatever the network, you have to bring all the basics together to = acquire=20 the right data. In addition, you need to be scalable and, if you = can get=20 the database in a reasonably short time you can monitor services = quite=20 easily.

AG: We have installed a performance reporting = system on=20 Mobilkom's pure UMTS network, for example. In addition, Wind, one = of our=20 key customers, has a need for very strong management reporting. = Large=20 operators expect very good long term views and coverage of the new = technologies they want - and we provide them with those.

VP: Nexus Telecom has deployments in over 100 = countries.=20 How does it use this experience to help its customers prepare for = next=20 generation technologies?

TS: One general pattern within Nexus is that we = don't=20 develop the next generation of our product on paper. What we = normally do=20 is go into a partnership with a customer. For example with service = monitoring we have a partnership with T-Mobile Germany. This makes = sure we=20 are not developing away from what the market wants. By doing it = this way,=20 you're not always first to market, but it's the way we choose and = we=20 automatically generate references during development.

AG: The experience is very important. In next = generation=20 networks we speak about operational solutions and use the = experience of=20 our customers to gain knowledge to serve other customers. For = instance, we=20 have installed a next generation billing system for an operator in = Vietnam. This, again, is not only strongly supported by the = customer but=20 also our partners, in this project Siemens.

TS: It's important to understand that we = deliver test=20 solutions to both operators and manufacturers. The knowledge we = gain from=20 the manufacturers is then used to deliver service monitoring = products for=20 operators.

VP: When it comes to carriers acquiring = solutions, is ROI=20 still the key criteria?

AG: What's important for the industry as a = whole is that=20 the lifecycle [of a solution] is becoming shorter and shorter. = This time=20 factor is extremely sensitive and its more and more difficult to = have an=20 assured ROI. You have to be sure that investment in new services = will be=20 covered by users.

VP: Nexus Telecom has strategic partnerships = with Nortel=20 and Siemens. How important is it to have such partnerships? Are = they=20 important as a means to gain first hand knowledge of network = hardware or=20 more useful as a sales tool?

TS: We use them intensively in both ways. The = R&D way=20 to gain knowledge and for testing in an operational environment = and the=20 same relationship to aid selling.

AG: We work with partners technologically and = on the=20 marketing side. Large companies don't have all the solutions - we = are the=20 specialists and cover the parts they don't cover internally.

VP: Partnerships can mean many things - what's = Nexus=20 Telecom's partnering policy?

TS: We have to distinguish between different = partners. We=20 use many channels incuding our own sales force of 25 people. Our = policy=20 regarding channels is that once we go with a channel we like to = become=20 very close. We think that it's very important to have a long = lasting=20 relationship because only then can you construct a win-win = situation. You=20 also lose credibility if you change channels all the time. We = don't do=20 exclusive contracts but we usually work with only one partner in a = country.

AG: We only operate in three offices at Nexus = so local=20 offices and support are needed. Therefore, it=92s very important = that our=20 partners and resellers are locally present and active. Of course, = we have=20 professional services but that's very different.

TS: We have three main rules with partnerships = and=20 customers. One rule is never to walk away. Rule two is never to go = to=20 court with a customer and rule three is that we want to keep a = customer=20 forever. We try to solve any problem on the spot. If I need the = owner of=20 the company to reassure a customer, he'll be there in two days. =

VP: With the recent spate of carrier mergers = and=20 acquisitions activity in the US, the recent sale of Wind in Italy = and the=20 continued rumours surrounding O2, do you think the industry is = entering a=20 further phase of carrier consolidation? What might the = implications of=20 that be for Nexus Telecom?

TS: Yes, there is another wave of = consolidation. In Latin=20 America there is a lot of M&A but I don't know if this will = happen=20 with the same intensity worldwide. The most dramatic effect on = Nexus of=20 this is that the number of customers and the spend per customer = will be=20 reduced. In preparation for sale carriers go into cost saving = programmes=20 to raise values and it's getting harder and harder to get big = investments.=20 There will be less opportunities and customer acquisition will get = more=20 expensive with competition for good deals getting harder. This = will lead=20 to consolidation in the supply market. For instance in the = monitoring=20 market, the number of players has reduced with the Steleus/Tekelec = and=20 NetTest/Anritsu acquisitions. There are probably no more than four = reasonable players left.

AG: I believe the most significant challenge = for an=20 OSS/BSS vendor is the search and selection by carriers for group=20 solutions. The biggest challenge is to be selected for a group of = carrier=20 companies.

TS: There is an upside to this. The good thing = with=20 consolidation is that if one of our customers becomes part of a = group,=20 they have a discussion and we may get the chance to become a = supplier to=20 the larger group. For example, when Eplus became a member of KPN = they were=20 advised to use Agilent but Eplus made the technological and = economical=20 argument and we're still there. In addition, we may get the chance = to=20 tender for the wider KPN group.

VP: Consolidation is also continuing among = vendors. Does=20 Nexus Telecom see itself as a consolidator or as an acquisition=20 target?

TS: Nexus is a private company so it's really = up to us=20 whether we'd open up to such an idea. Our owner has been in this = market=20 for a very long time and I think his behaviour would be = anticyclic. There=20 are certainly no current ideas that we would be sold to another=20 player.

VP: Where do you see Nexus Telecom in five = years'=20 time?

TS: We will be one of the survivors after the=20 consolidation of the vendors. We'll be very specialised, = concentrating on=20 certain sectors and leading them.

AG: We'll be much more of a shining star in = five years=20 than we are now. We understand that Nexus is one of the smaller = players=20 and therefore our way of behaving towards our customers is our way = of=20 differentiation. As long as we do our technological homework our = success=20 will grow. Size is not everything; you have to be able to be = professional=20 on every single contract.