Mr.
Zhang Zhiqiang is currently the general manager
of the greater China region of Nokia-Siemens Networks.
From the year of 1987 when he started his professional career
to the present, Mr. Zhang has always been with Siemens Networks,
and was continuously promoted because of his preeminent
achievements, and now is one of the few Chinese in the highest
positions of Siemens throughout the world.
From October, 2005, Mr. Zhang had been the senior vice president
of Siemens (China) Communication Network Group, overseeing
the Siemens¡¯ business operation in China and Siemens¡¯ relations
with the government. And before that, Mr. Zhang had been
in the position of president and CEO of Siemens VDO Auto
Electronics of China region for as long as 7 years.
Multi-field and trans-disciplinary education laid firm basis
for Mr. Zhang¡¯s successful professional career. In 1979,
Mr. Zhang entered the Northern Jiaotong University to study
computer science. After graduation, Mr. Zhang went to Beijing
Foreign Language University, majoring in English, and then,
he studied for the master¡¯s degree of transportation system
engineering, and at last, he got the degree of MBA in Queen¡¯s
School of Business of Canada.
How did Nokia-Siemens accomplish
1+1>2?
Wang Jing:
As early as in the Siemens times, Siemens Networks had been
going all out to support TD-SCDMA Technological Forum. Once
was established, Nokia-Siemens Networks also joined this
forum in March, 2007, which was a significant support for
TD Forum and TD industry. Nokia-Siemens is a major enterprise
in the industry chain, and we are all eager to find whether
Nokia-Siemens has a clear plan to participate in the TD-SCDMA
industry, which will also be a driving force for the whole
industry. And we hope to know something through this interview
about the current conditions of Nokia-Siemens and its plan
concerning TD. And this is why we are here today.
Zhang Zhiqiang:
Thanks very much. These two parent enterprises had been
laying great emphases on TD technologies even before they
are amalgamated. Siemens as an international enterprise,
especially, has been supporting this technology in the recent
ten years. After amalgamation, the leading stratum from
the headquarters to our greater China region, also think
the development of TD is promising, and have been giving
their supports, hoping that our company will always take
the lead in the communication industry. TD-SCDMA and WCDMA
are both very good techniques, and both will satisfy customers¡¯
needs. Especially under the current conditions of China,
we are confident in TD¡¯s future. I think that we have some
common ground to discuss something on how TD will develop
in the future, how we will support each other, and how to
accomplish this job as soon as possible.
Nokia-Siemens has some ideas about TD¡¯s future development
and our mutual support, and I¡¯d love to share with you.
Wang Jing:
I remember that Nokia-Siemens came into existence in June,
2006. Is that right?
Zhang Zhiqiang:
Yes, it was announced on June 19th, 2006.
Wang Jing:
It was officially unveiled last April, and up to now, it
is nearly one year.
Zhang Zhiqiang:
Yes, it will have its first birthday on April 1st.
Wang Jing:
For two so large companies to merge there must be many difficulties
to overcome. Would you like to make a general evaluation
on this?
Zhang Zhiqiang:
Yes, of course. I¡¯d love to say when we turn back to see
our achievement, we feel satisfied.
Wang Jing:
You mean you made a right decision?
Zhang Zhiqiang:
Absolutely. From the present perspective, we¡¯ve made a right
move. In the communication industry, it is impossible for
technologies to advance without technological support. And
financial supports are also very important. Facing the changes
of the industry, we combine into one so that we can put
more funds and efforts to the next-generation technology.
If you had not made this decision, it will be hard for today¡¯s
market to prosper. I think it is clear for us all.
Wang Jing:
In fact, such moves should be made much earlier.
Zhang Zhiqiang:
Yes. I think that for this industry developing to the present,
it is a big trend to amalgamate. On the other perspective,
we find that the cultures of these two enterprises have
many very similar things. Of course, they are both European
companies. But I think what is more important is that the
company¡¯s management team, from the headquarters to our
greater regions, including the greater China region, have
been doing well in enforcing company¡¯s new cultures. From
the very beginning, we have clearly admitted that Nokia-Siemens,
as a new company, should learn to forget the past. No matter
you belonged to the ¡°former Nokia¡± or ¡°former Siemens¡±,
you are now one of the new Nokia-Siemens Networks. From
the management to the lower levels, from our business behaviors
to our cultural system, we must think from the prospective
of ¡°Nokia-Siemens¡±. In fact, at that time, we had had thousands
of employees to discuss the culture of our new company on
the Internet.
Wang Jing:
At the time of amalgamation, how many employees did you
have of the two companies added together?
Zhang Zhiqiang:
About 60 thousand.
Wang Jing:
Throughout the world?
Zhang Zhiqiang:
Yes.
Wang Jing:
How many in China?
Zhang Zhiqiang:
There were about 6,000 employees.
Wang Jing:
Does the size decrease?
Zhang Zhiqiang:
It is about the same with the early stage of amalgamation
because we invested much in R&D in the greater China
region by hiring more employees. .
Wang Jing:
So you were very successful in dealing with your work forces.
And you did not make firm requirement to reduce employees?
Zhang Zhiqiang:
Yes. It is true that some people left. But there were no
big troubles in the whole process. Firstly, we were fair
to every employee, and the employees were also fair to the
company and understood us. In the whole process, our company
had always been taking a transparent policy to do things.
If the amalgamation led to overlapping of positions, the
surplus personnel caused by organizational structure will
leave according to the requirements of law and their past
contributions. We showed our due respect and support to
everyone, and everyone admitted that.
And, of course, we are very thankful to these employees.
I think they truly understood the situations of this company,
and meanwhile, were confident in themselves¡ªI worked here,
and I learnt something. Some employees sent emails to me
when they left to say ¡°Thank you.¡± I have been in the company
for many years, even in this new company, not to mention
Siemens and Nokia of the past, although we shared a short
time working together, we have emotional connections with
this company. So, most of the employees left the company
by signing agreements.
Wang Jing:
Generally speaking, because Nokia and Siemens were complementary
in the communication industry, and their respective focus
fields to some extent overlapped but still were very different,
one being good at fixed network, the other at mobile network.
But at expected, after two companies are amalgamated, the
integration of personnel and cultures is always the biggest
trouble.
Zhang Zhiqiang:
You are right. As I just said, there were thousands of people
discussing our company culture. And at last, we recognized
five fundamental cultural factors. The first is Customer
Focus; the second is Winning Together; the third is Inspiring,
not only we ourselves need to be inspired, the customers
also need this atmosphere; the forth is Innovative; and
the last is Open Communications. Basically, we carry out
our business according to these five principles, including
the amalgamation we just mentioned, the appointments of
our personnel, our every market, and every decision. By
so doing, from the management to the ordinary employees,
everyone shall abide by these five principles in making
decisions, selecting employees, doing business. As a result,
it is difficult to form factions. In my own experience in
Siemens, there was a company of Siemens merging with another
company. It took our 3 years to do that company well because
from the very beginning there were virtually no clear directing
principles. No matter this one or that one, or all the good
ones, once they go together, they do not necessarily make
a best one. We should set the culture, policy, strategy,
company structure and organizational structure clear, and
the two sides go towards the same, not their respective,
not opposite directions.
Wang Jing:
So, we can say, from the perspective of the integration
of personnel, the amalgamation is a success?
Zhang Zhiqiang:
We think we are successful. After Nokia and Siemens were
amalgamated, we, in the global scope, and especially our
greater China region did very will in this aspect, put the
best employees in the best positions to do the most suitable
jobs.
Wang Jing:
What about your performance?
Zhang Zhiqiang:
In the aspect of performance, we also think that we did
well. The performance of a company will always go up, and
there is not a satisfying day. But in the perspective of
statistics, in the third and forth quarters of 2007, the
sale volumes grew by 20% and 30% in comparison with the
previous quarter respectively. So, I think that we grow
well due to our integration and our customers¡¯ acceptance.
But it is inevitable for the customers to wonder that after
you put two companies together, which one is your future
direction, what your advantages are, and in which fields
you will invest. It will take some time for the customers
to understand. Through our promotions and introductions,
the customers begin to accept Nokia-Siemens as the leading
company of this industry. And our order rolls, our sale
volumes, and our new project agreements show that the customers
are recognizing our company. In the perspective of the employees,
since the company took a leading position in the market,
they are very confident to stay and to work for the company.
The best employees will stay to form a strong team, so that
the customers will be more confident in us. I think the
present situation conforms to our plans, or at least is
very near to our plans. We put two companies together, and
we accomplished 1+1£¾2. In general, we are content with the
present condition.
Nokia-Siemens¡¯ Understanding of the Present China
Market
Wang Jing:
Nokia and Siemens both had some advantages in China 2G and
fixed networks before they were merged. After the year of
2007, how does Nokia-Siemens think of the current market,
and what challenges does it confront?
Zhang Zhiqiang:
Challenges surely exist, and will be much more and severe.
Firstly because this industry develops very fast, there
will be more and more new technologies; secondly, the domestic
enterprises are becoming more competitive. In such a situation,
we prefer to become a domestic company, for example, our
testing mode in China is in conformity with the customers¡¯
requirements to meet their needs. Although we are a foreign-funded
company, we can understand the projects of the government,
just as the domestic companies do. Therefore, the challenges
we have to be confronted with, the domestic companies such
as ZTE, Datang and Huawei also have to face. This industry
is full of competitions, if you do not advance, you will
be defeated. It is always this case.
Wang Jing:
You did not consider yourself as a foreign company?
Zhang Zhiqiang:
Yes, we do. And we should not consider ourselves as a domestic
company. What concerns us is how to bring our advantages
to our homeland to compete with our rivalries, no matter
domestic or foreign ones. I believe when the customers make
their final decisions, their focus is on the values you
can create for him and not that you are labeled as a foreign
or a domestic company. On the other aspect, the industry
comes to the present condition, our customers themselves
are already internationalized, and they know the international
development of this industry. It is impossible for the customers
to give you too much just because you are a domestic or
a foreign company. I think such times have passed.
Wang Jing:
And it is no denying that we are confronted with the emergence
of the native companies.
Zhang Zhiqiang:
You are right. For example, the emergence of ZTE, Huawei
and Datang. It is natural and I think in one industry and
one region, there will always be domestic competitions.
For us, this is a challenge, as well as a boosting factor.
Huawei also wants to go abroad, and ZTE and Datang also
will go abroad. In the future, all of us will become internationalized
companies. We are confronted with competitions as well as
cooperation in any fields, for example, in the fields of
TD, we are cooperated with Huawei. Generally speaking, competition
is good for companies. Competition can make us run faster
and can make us be more effective.
Wang Jing:
Generally speaking, no matter Nokia, Siemens and the merged
Nokia-Siemens, they have deep understandings of China¡¯s
market. From the beginning, Siemens has been making efforts
to establish a joint venture with Huawei, so as to take
lead in the field of TD. There is no doubting that your
history has proved that you think highly of TD-SCDMA and
you are a participant of this field.
The Next Step of TD-tech Limited and Potevio-Nokia: truly
on the shoulder of a giant
Wang Jing:
Now, all the people are all concerned with the operations
of Nokia-Siemens¡¯ two joint ventures, TD-tech Limited and
Potevio-Nokia. Potevio-Nokia is said to be focused on the
production of WCDMA and TD-SCDMA, but TD-tech Limited also
undertakes the R&D, marketing and distribution of all
the products. According to the information I¡¯ve got recently,
Nokia-Siemens is still evaluating such joint ventures. And
I am wondering whether you have any plans that can be publicized
or that have any tendencies.
Zhang Zhiqiang:
This issue must have something to do with history. Just
now, you also mentioned something known to everyone. Before
the two companies were joined together, they established
joint ventures with domestic companies respectively, for
example, TD-tech Limited set up by Siemens and Huawei, making
all the end-to-end products (excluding terminals); Potevio-Nokia
set up by Potevio and Nokia. Now, we come to the times of
Nokia-Siemens. In sum, we have 9 joint ventures and 17 co-
partners in the greater China regions, not including our
sole-proprietary companies.
At present, we are talking with all the 17 co-partners about
the moves we shall take in the next step, the positions
that everyone shall occupy and how to satisfy the two parties
to continue to go ahead. In the past 10 months, we are communicating
with all of our co-partners one by one, and we have achieved
some substantial results. As to the two joint ventures we
just mentioned, we have reached agreements to introduce
the most advanced technologies to TD-tech Limited.
Wang Jing:
To increase investment?
Zhang Zhiqiang:
We have not talked about the issue of investment because
the company is still running well. What we will supply is
mostly technological, distributional and service supports,
which had been done by TD-tech Limited itself. The two parent
companies had promised to TD-tech Limited to invest more
in the aspect of marketing, distribution and services. The
customers are very familiar with the two parent companies,
but are not so familiar with TD-tech. We were aware of this
problem in the first run of bidding of TD networks.
Wang Jing:
In fact, you have changed orientation of the joint venture?
Zhang Zhiqiang:
Yes, for sure. TD-tech Limited is the R&D center, which
is essential for production. And the marketing and distribution
shall be undertaken by the parent companies. Our company
has a very large team. So does Huawei. And the customers
have confidence in both of the teams. We believe that by
so doing, we will truly let TD-tech Limited stand on the
shoulders of two giants.
Wang Jing:
Previously, it seemed making solo flying.
Zhang Zhiqiang:
Yes. Now we hope to put it on the shoulders of us two companies,
to support it and to make it develop more smoothly and rapidly.
And we have make agreements. And we are also talking with
Potevio, but have not reached a final agreement. Once we
do, we will inform you as soon as possible to give everyone
a satisfying reply. Our aim is win-win and to satisfy all
the people. At least, there should be a common plan to go
ahead together.
Wang Jing:
We¡¯ve got information from Potevio, who told us that after
they cooperated with Nokia they¡¯ve received great technological
supports, especially in product testing. And in the aspect
of product, they are doing the R&D of TD 3G base sites.
And they¡¯ve also benefited from your company. That¡¯s the
feedback we¡¯ve got.
Nokia-Siemens will not get into the fields of terminals
Wang Jing:
In the field of terminals, everyone knows Nokia, as well
as Siemens. They are both giant mobile phone makers. Now,
we find that Nokia has invested in Commit Incorporated,
which is a TD chip company. I wonder whether Nokia-Siemens
will get into the fields of terminals.
Zhang Zhiqiang:
No, we will not. Nokia is our parent company, and we will
try to supply end-to-end services for TD and on other occasions.
We communicated this with Nokia. Nokia, our mother company
is very committed to TD-SCDMA terminal development. They
will provide ease of use, high quality TD-SCDMA phones to
Chinese users in the right time.
Wang Jing:
Commit Incorporated is also a member company of TD Forum,
and we often go to Shanghai to communicate with them. What
they want most eagerly is that there is a strong terminal
maker in the upstream to support them, just as Samsung supported
T3G. They also want Nokia to play this role. And from the
perspective of product chain, from 2005, we have recognized
that it does not do to make TD-SCDMA terminals only by the
domestic companies. TD is an international standard, and
we can not close the door and play with it in our own home.
Therefore, we need world first-class makers to participate
in the field of terminals. We hope that Nokia will come
in to make terminals, so as to speed the steps forward.
The development of TD terminals is still slow. The causes
are various, but the ambiguity of the market may be the
most important factor. It is not easy for an international
maker to make a decision. They want to see the opportunities
and returns to come in.
LTE or TDD£¿
Competitions in the future will be more about the competitions
of industry chains, and not the competitions of a single
technique
Wang Jing:
You have participated in TD-SCDMA from the very beginning.
You worked for Siemens, and probably experienced more. In
general, what kind of role will Nokia-Siemens play in the
fields of TD and LTE?
Zhang Zhiqiang:
We think Nokia-Siemens will become the leader of this industry.
At present, we support both WCDMA and TD-SCDMA. In February,
when we were in Barcelona we discussed LTE TDD with China
Mobile, Vodafone and Verizon Wireless. Nokia-Siemens supports
both of these two standards. We believe that competitions
in the future will be more about the competitions of industry
chains, and will not be limited in a single technique because
all the techniques will be used in the future.
Wang Jing:
You mean Nokia-Siemens is also doing TDD LTE?
Zhang Zhiqiang:
Yes. We went to Barcelona on behalf of Nokia-Siemens to
show our support for TDD LTE.
Wang Jing:
TD Forum plans to hold a LTE conference in China at the
end of May, and we are talking with 3GPP and CCSA. In the
field of LTE, there are two opinions, one hoping to skip
3G to LTE; and the other hoping not to skip 3G, that is
to say, the present TD products and speeches still need
a certain lifecycle. Both of the opinions hold water. Our
forum will provide a platform for them to communicate their
ideas.
On May, 22nd, 3GPP will also hold an LTE conference in Europe,
and about 500 companies will attend. When I was talking
with 3GPP they said they were willing to come to China to
our conference. And we can use this platform to speak out
our opinions, so that to communicate with each other.
Zhang Zhiqiang:
We will surely support LTE, and as to what sponsored by
3GPP, Nokia-Siemens as an internationalized company will
also show its support. It is virtually impossible for the
communication industry not to be internationalized. There
will be no problem if all of us abide by the internationalized
standards and go together ahead.
Wang Jing:
One of focus of TD Forum this year is LTE, and this is also
what the board asks us to do. We are trying hard to find
some opportunities for the people to discuss how to determine
the future technological path.
Be ready for all the changes: Full-service operation
is the trend
Wang Jing:
And a last question, given such rumors and news about the
shuffle of Chinese telecom industry and operator, how do
you think Nokia-Siemens will adapt in the condition?
Zhang Zhiqiang:
I think at least one point is clear that full-service operation
is the trend. No matter what you do, this will not be wrong.
This policy shall be determined first.
Wang Jing:
So you can gain advantages by the merger?
Zhang Zhiqiang:
Right, we have advantage in this regard. We have businesses
both in landline network and in mobile. I feel the landline
network and mobile service are integral, there is seamless
connection.
Wang Jing:
The user doesn¡¯t care about whether you are mobile or fixed,
the technologies are integrated.
Zhang Zhiqiang:
This is a must. I think the orientation is right, and we
shall act quickly. As an operator, once you determine you
policy, including joint-venturing, you must act soon. If
you hesitate, you might spoil the whole cake and that will
upset everyone. I think mergers for Chinese operators are
much more complicated that ours, since we have only 60 thousand
employees. But still, this is the objective, and there is
no good in hesitating. So we determine to keep going. I
think this is beneficial for Chinese telecom industry, for
operators and for us. When determined, we will have a clear
objective, and we can organize to focus on customers and
service. If the thing can be done soon, we will also follow
in very quickly.
Wang Jing:
About the merger, did you have any difficulties in sorting
out details like who will do what?
Zhang Zhiqiang:
I think that¡¯s quite natural. The organizational structure
and personnel will be shuffle anywhere. But for us, what
we consider is how will the company develop, what its policies
and strategies will be? We need to take the strategies of
other companies in consideration will formulating our own
policy, in order to better help our development and that
of the customer. And it is not a big deal about the positioning
of John or Jack. We are a company, its strategy and market
positioning will not be determined by one or two persons.
No matter who is on which position, we shall have a comprehensive
consideration on fields like fixed network, mobile network,
transmission, customer service, etc. So, positions of specific
persons don¡¯t matter. We only need to shuffle our organizational
structure when operators have organizational change.
Wang Jing:
You have picked the direction and you¡¯ll try to do your
best in correspondence with the market development.
Zhang Zhiqiang:
The direction of development is clear. And the macroscopic
direction of industry chain in China is clear. But details
are hard to be estimated. I think the mobile business and
wireless broadband are consistent. 3G and LTE will go in
the direction. These trends are clear. If there is new change
on the market, we will adjust accordingly.
Wang Jing:
Do you have other businesses on wireless?
Zhang Zhiqiang:
We have 2G and 3G wireless businesses in Greater China region.
Our 2G products exist in several operators, and we are the
biggest supplier in Taiwan and Hong Kong on the 3G market.
We are ready no matter in technologies, personnel, products
or applications.
Wang Jing:
How about the future development of 3G in China, will there
be one technology or multiple?
Zhang Zhiqiang:
This is hard to say, however we have prepared for many scenarios
and technologies. I think, as a big company, we should have
technological preparation. We can support for multiple technologies.
Wang Jing:
Is WiMax included in your architecture?
Zhang Zhiqiang:
We have at the headquarters. WiMax is a strong technology,
we have WiMax projects around the world including Taiwan
and Hong Kong.
Wang Jing:
How about Mainland China?
Zhang Zhiqiang:
As to WiMax, we don¡¯t think it will be favored by operators.
But in other places, there might be. It is not only a competition
of technology per se.
Wang Jing:
More than technology?
Zhang Zhiqiang:
More than technology. As to technology, what one technology
can do, can be done by other technologies. If you are an
operator, you¡¯ll choose the one that suits you the most.
Wang Jing:
So your R&D of WiMax doesn¡¯t locate in China?
Zhang Zhiqiang:
We have R&D into WiMax that is compatible around the
world and are done in China. As to the large scale plantation
in China, I don¡¯t think it will be finished that quickly.
Wang Jing:
Right, I don¡¯t think there will be large scale deployment
in China, because it is not yet perfect. But as a multinational
company, I know Nokia-Siemens is very strong in terms of
WiMax.
That is all about today¡¯s questions. I think many member
enterprises are focus on recent changes in Nokia-Siemens.
We look forward to the support from Nokia-Siemens, so the
TD Forum can provide more information to all the members.
Zhang Zhiqiang:
Thank you to the TD Forum. This is a new industry, we need
support and publicizing. I really look forward that the
voice of our industry can be delivered.
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