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Nokia’s Strategic Revamp in the Field of Mobile Networks
December 15, 2023
After Nokia lost AT&T’s open RAN contract to Ericsson, CEO Pekka Lundmark recognized the need to revisit the firm’s Mobile Networks strategy. Although AT&T’s decision was financially driven and not related to Nokia’s performance, Lundmark admits there’s space to financially improve within the company’s Mobile Networks business.
In a recent strategy update, the company modified its 2026 operating margin target from 14% to 13%. Moreover, Tommi Uitto, president of Nokia’s Mobile Networks, outlined the division’s future and highlighted key achievements.
“Following that and AT&T’s decision to concentrate its radio network around a single vendor, Mobile Networks’ net sales are assumed to decline. However, Mobile Networks assumes a low-single-digit operating margin due to the actions it is taking to reduce costs. We will not rest until we deliver better value for our shareholders.”
Nokia via Fierce Wireless
Among these is the collaboration with Fujitsu to deploy Deutsche Telekom’s open RAN network in Germany, their first engagement since 2017. Also, Nokia plans to acquire Fenix, a North American defense communications specialist, as part of its diversification strategy. Lastly, partnerships with Cisco, HPE, and Microsoft Azure are enhancing Nokia’s role in the enterprise private wireless sector.
“We have now struck partnership deals with them. We are developing the go-to-market with them and their managed service providers … their sales channel. And we have progressed very well with the interoperability testing so far. We’re ramping the sales channel, the sales capabilities through supply chain, and the pipeline is developing quite nicely.”
Tommi Uitto, president of Mobile Networks at Nokia, via Fierce Wireless
In response to losing AT&T’s 5G network deal to Ericsson, Nokia’s continued commitment to open RAN (O-RAN) technology is evident in its recent contract with Deutsche Telekom in Germany. Despite the setback, Nokia has seen a growth in its 5G market share and remains optimistic about its non-mobile sectors. The company is focused on boosting the autonomy of its business groups and pioneering advanced technologies, including 5G and 6G communications, semiconductor and optical chip design, AI, and quantum computing.
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