Nokia talks up positives in face of 2017 challenges - Mobile World Live

Nokia talks up positives in face of 2017 challenges

27 JUL 2017

Nokia chief Rajeev Suri claimed there are “reasons to be optimistic about Nokia’s ability to deliver”, as he acknowledged challenges ahead this year that include a deteriorating network market outlook.

The executive said Nokia’s primary addressable market – communication service providers – will be “slightly more challenging in 2017 than earlier forecast”. It now expects a decline in the range of 3 per cent to 5 per cent, compared with its earlier view of “low single digit decline”, and it expects its Networks business to “perform in-line with the market”.

On a group level, the company reported a loss of €423 million, compared with a prior-year loss of €667 million, on revenue of €5.62 billion, up 1 per cent.

Sales of its Networks business decreased 5 per cent to €4.97 billion, although operating profit increased 30 per cent to €406 million.

A decrease in mobile net sales was attributed to “radio network and converged core networks”. Small cells, on the other hand, “continued to deliver strong growth in percentage terms”.

Fixed network declines were “primarily due to broadband access and, to a lesser extent, services and digital home”. Nokia in particular noted “one specific customer which completed a large project in Asia-Pacific in the fourth quarter 2016” as having impacted the comparison.

Flat sales in Global Services was attributed to growth in network implementation, primarily relating to the timing of certain projects, partially offset by decreases in systems integration and care.

Nokia’s Technology unit saw a sharp increase in revenue, up 90 per cent to €369 million, with an increase in operating profit of 158 per cent to €230 million.

Suri said that “we look forward to continuing to expand our overall business with Apple in the coming months”, and described a tie-up with Xiaomi as a “milestone win with a Chinese smartphone vendor, setting the stage for us to engage further with other vendors in the country”.

The CEO also said that in terms of expanding business in new vertical markets, “our work is gaining further traction in terms of orders, customers and technology”.

“We saw double-digit growth in orders in most of the verticals we are targeting and added new customers at a significant faster rate than one year ago,” he continued.

Suri also said that Nokia is “seeing catalysts in the US, China and Japan that point to an acceleration of 5G and the commencement of meaningful rollouts in 2019”.

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