Nokia takes a critical, open approach to turnaround - Mobile World Live

Nokia takes a critical, open approach to turnaround

16 DEC 2020

Nokia revealed further details of its massive strategic overhaul, with the company charging its mobile networks unit with achieving leadership in the move to so-called critical networks and open technology, while also overtaking rivals on 5G.

Having outlined plans for a restructure in October, the company today (16 December) fleshed out its strategic priorities in a stock market announcement ahead of an analyst update event.

As expected, its Mobile Networks’ division is to focus on “executing its turnaround and regaining 5G leadership” after a turbulent period during which it lost-out on several major contracts to rivals (including US operator Verizon Wireless, lost to Samsung).

CEO Pekka Lundmark (pictured) previously admitted the company had fallen behind on delivery of the latest generation of network technology.

The division is also charged with gaining leadership in the emerging open and virtualised RAN sectors, and achieving growth in its enterprise-focused private networks business.

In terms of financial aims the unit, which is set to comprise one of four standalone customer-facing segments from January, Nokia expects an operating margin of 0 per cent in 2021 with “significant improvement over the longer term”.

Critical aims
Lundmark used the latest statement to highlight an overarching opportunity in developing “critical networks”, advanced infrastructure running mission critical services for enterprises and societies.

He expects these to be largely built using equipment from multiple vendors on open and virtualised infrastructure, in turn extending Nokia’s addressable market for “CSPs, webscales and enterprises”.

Lundmark added Nokia was well positioned to offer the cloud-native, open, virtualised core equipment, which it expects to replace “monolithic core networks”.

Business from the critical networks sector spans several of the company’s other soon-to-be formed business units.

Its Network Infrastructure division will focus on the fixed and backhaul elements; Cloud and Network Services will aid Nokia in “leading the transition to cloud-native software and as-a-service delivery models”.

The other division, Nokia Technologies, will focus on generating revenue from its IP and “pursuing other licensing opportunities”.

In addition to the revamp, the company plans to run its standalone internal corporate costs “in a lean manner”.

Lundmark told Reuters it was also set to further slim its leadership team, following details of a number of departures in recent weeks.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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