NEC 2015 Annual Report Download - page 23

Expansion of global communications infrastructure market in the
emerging nations
Strong need to reduce capital investments and operating costs as
communications infrastructure becomes more complex
Global marketing of solutions such as TOMS and SDN that reduce
capital investments and operating costs for customers
Maintain domestic advantage through prompt response to
advanced technologies
Maturation of the Japanese market and increased competition from
global vendors
OPPORTUNITIES NEC’S RESPONSE
THREAT FACTORS
The environment for business targeting telecom carriers is expected
to be severe in Japan by a matured market in which we expect to see
a decrease in investments in network infrastructure. Furthermore,
we expect that competition will intensify as markets become
increasingly borderless.
Globally, however, the market is expected grow particularly in
emerging countries, backed by a steady increase in needs for
network infrastructure. In addition, services such as TOMS, which
contributes to reducing customers’ operating costs, are expected
to grow.
Moreover, while the market launch of SDN/NFV is delaying,
telecom operators are working steadily in commercial application of
the service, which is expected to trigger significant changes in the
telecom carrier business.
Medium-to long-term growth in the telecom carrier business relies
on an extension of steady growth in TOMS and the rapid
commercialization of SDN/NFV. We expect to see demand in the
TOMS market to grow in response to advancing network operation
controls going forward. NEC will expand business with its subsidiary
NetCracker Technology Corp.
For telecom carrier SDN/NFV, we believe that obtaining rapid
commercialization results will expand business opportunities
among global telecom carriers. To this end we will actively move
forward with proposal, and field tests for Telefónica Brasil, S.A. and
other global carriers.
Furthermore, in preparation for the full-scale commercialization of
SDN/NFV for telecom carriers going forward, we have collaborated
with NetCracker Technology in strengthening the global sales
expansion network for SDN/NFV solutions. Looking ahead,
NetCracker Technology has been delivering to more than 250
companies in 58 countries, utilizing solution selling methods
cultivated by marketing TOMS to accelerate proposal activities
directed at telecom carriers across the globe.
Amid such an operating environment, NEC will firmly maintain its
domestic advantage in the intensifying global competition by
promptly providing network devices with advanced technologies to
our customers. In the international market, we will growth in
existing businesses such as submarine cable systems and mobile
backhaul in response to the need for infrastructure expansion.
Furthermore, we have positioned TOMS and SDN/NFV as focus
fields, and we will contribute to our customers in and outside of
Japan in cutting their capital expenditures and operating costs. For
SDN/NFV, in particular, we acknowledge that establishing a
prominent position in the newly commercialized market is important
in expanding our business when the market starts to grow. To this
end, we are investing in development and sales resources to
accelerate business development.
For Future Growth
Business Environment
NEC's Issues and Responses
Medium- to Long-Term Value Creation
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NEC Corporation
Annual Report 2015
Business Activities for Value Creation