Is Nortel committed to UMTS?
GR: The facts are obvious: We have great products but we don't have a leading share position. Can we make that great product into a leading share position or not? That's a discussion we are having. Because if you can't then what are you going to do about it? We're actually much more excited, frankly, about 4G as opposed to UMTS. I think if you look at the practical experience of the economics of 3G, one would have to say if we wound the clock back five years and this is what we got, would we be happy with all of the investments? I think by and large, no. We actually see an opportunity to continue to invest in a set of technologies around OFDM/MIMO enablement, which could get manifested in WiMax Rev C, or an LTE solution for the UMTS (market). And we think, both for the services and frankly for the backhaul benefits of some of those technologies, you're going to see a lot of value in those technologies. Our challenge is to get the time to market right in order to exploit that.
So as a recent addition to the executive team and as the chief strategy officer, what do you see as Nortel's biggest challenges?
GR: Our challenges - there's a long list of them - have been reasonably well known. We haven't been focused enough. We haven't been profitable. We haven't had alignment in terms of a vital few, a set of things we put more resources behind. We haven't gotten leverage out of technology investments and partners like we should have. And as a result, our position in certain segments is where it is. We are where we are. So those are the obvious challenges that are well known. I think the side we don't spend as much time talking about - I'm overwhelmed at the pull from both customers and partners. If you go have a conversation with a large carrier or a large enterprise customer, they're very anxious to see Nortel get back on its feet again. And our ability to deliver world class products and solutions in the past, and ability to continue to innovate in the future, gives them hope that we can return. And partners are saying that we actually have some real value to add. So we have plenty of challenges. The one I would add is the sense of urgency to act. We have said a lot of things and we are in the midst of trying to get as much change enabled as we can. It takes time to build the momentum and we're cognisant of that.
Can you start to see some decisions and some momentum build that will reassure customers, shareholders and employees that the ship is turning?
GR: There's a whole new team driving the ship going forward, a whole new set of processes that we have put in place, the business transformation. And those are starting to pay huge dividends. It'll take a little time for the full benefit but in terms of why do I feel confident that the ship is turning? It's because I can see the levers we're pulling and the impact of those levers - whether it's in people, processes or profitability improvement - it's on the horizon.
And as chief strategy officer, what are your priorities? What currently occupies your time?
GR: We have been going through a strategic review, which is largely about where are we going to place some of these bets for the long term? Where are we going to be a leader, and what is the alignment of those areas back into product and distribution and organisational implications. We've been at it for about a month and have made a lot of progress, but we've got some work still to do. In terms of where I spend my time, it's working with the cabinet, with the theatre heads, with the product group heads and with customers, the partners to figure out where can we focus to be distinctive. We have been all things to all people in many cases, and we know that can't be sustained. So a lot of my focus has been on figuring out the plan for going forward. The other half of my focus is on external dialogues, whether it's around talking to customers and what they see, partners, prospective partners - things that we could do together that would be valuable. The third is getting to know the organisation a bit better.
Nortel has had several engagements and disengagements in core routing. You're from Juniper. Any potential reengagement with Juniper for core routing?
GR: I'm not going to comment on specifics for any particular partner. To me, you've got to articulate to a customer why this would be better. So why would we add value to reselling core routers? It's not clear to me that we would. Juniper already has a set of strategic partners, as you know. If there are ways or segments where we can add distinctive value, then that's interesting. If it's just a reseller arrangement then that's not very interesting.
It's hard to imagine why or how, at this stage in the game - if you look at where Juniper or Cisco or Alcatel or Redback are - starting from another program today why we would be able to be distinct. There are other players that are going to participate in that space but that's not going to be us. On the flip side, this is why we're so excited about Metro Ethernet. We see a real opportunity, particularly on the edge and access side, to play a meaningful role as these next generation architectures get built out. Our customers are saying MPLS to the edge doesn't work. It doesn't scale, it's too costly, and it is too complex. For the last part of the access network, it's too expensive. So can we deliver a solution that has some distinctive value for that part of it that is complementary to MPLS at the core. And I think that we can.
Do you plan to acquire or partner for Ethernet access?
GR: I don't see a need for an acquisition. We have a healthy optical business, we have a healthy carrier data business, we have some pretty interesting technologies that we think can add value. In terms of the opportunity we see in front of us to do it organically, it's pretty robust.