& cplSiteName &

Nokia to Split Mobile Biz, Rejig Management After Mobile Boss Quits

Iain Morris
3/17/2017
50%
50%

Nokia will split its mobile networks business into separate product and global service units after revealing that Samih Elhage is to quit his role as mobile networks president.

The Finnish vendor has also announced plans for a three-way carve-up of its innovation and operating unit, saying it will create an entirely new division to look after all operating activities. Innovation will then become the responsibility of the chief technology officer, while the company's chief strategy officer will be tasked with nurturing new business opportunities.

The latest overhaul seems aimed partly at helping Nokia Corp. (NYSE: NOK) to pursue the strategy it unveiled at its capital markets day last November, when CEO Rajeev Suri said Nokia would target growth in a number of enterprise markets "adjacent" to its main telecom business. (See Nokia to Create Standalone Software Biz, Target New Verticals.)

Another goal of the restructuring is to bolster efficiency at Nokia, which last year reported a 10% drop in sales, to €23.9 billion ($25.8 billion, at today's exchange rate), and a 25% fall in operating profit, to about €2.2 billion ($2.4 billion). (See Nokia Upbeat on Turnaround Despite Sales Decline.)

Like Sweden's Ericsson AB (Nasdaq: ERIC), Nokia has complained about a slowdown in the market for mobile network infrastructure and continues to face tough competition from Chinese rivals Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).

It also last year finished integrating the Alcatel-Lucent (NYSE: ALU) business with its own organization after completing a €15.6 billion ($16.8 billion) takeover of the company in January 2016.

Suri is trying to realize cost savings of about €1.2 billion ($1.3 billion) in 2018, compared with the combined operating costs of Nokia and Alcatel-Lucent in 2015 (excluding the small Nokia Technologies business, which made about €1.1 billion ($1.2 billion) in sales last year).

"These changes are designed to accelerate the execution of our strategy," he said in a company statement released earlier today. "They will strengthen our ability to deliver strong financial performance, drive growth in services, meet changing customer demands in mobile networks, achieve our cost saving and ongoing transformation goals and enable strategic innovation across our networks business."

Marc Rouanne, currently Nokia's chief operating and innovation officer, will become the new president of the mobile networks business minus its global services operation.

Elhage is leaving the company at the end of this month to pursue "new opportunities," said Nokia, but will continue to work as an advisor to the organization until the end of May.

The new global services business unit will comprise the services organization that currently sits within mobile networks as well as "company-wide managed services." Igor Leprince, the current executive vice president of global services, is to become its president.

Last year's financials indicate that Nokia made about €21.8 billion ($23.5 billion) at its networks business in 2016, with about €8.4 billion ($9.1 billion) of that coming from services.


For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.


Last September, Leprince told Light Reading that he expected growth in Nokia's services business to come from three key areas in future -- systems integration, network planning and optimization, and managed services -- as well as new market opportunities. (See Nokia's Leprince Wants to Be King of Enterprise.)

"We want to expand beyond these three areas," he said during a meeting with reporters in London. "Very clearly that means the Internet of Things and the new vertical markets that we want to develop -- that is obviously outside where we are today."

Nokia reckons its main addressable market, worth about €113 billion ($122 billion) in 2016, will grow at a compound annual growth rate (CAGR) of just 1% over the next five years. It hopes to flourish by focusing on a range of vertical markets worth €18 billion ($19 billion) last year but expected to grow at a five-year CAGR of 13%.

Other restructuring means that Monika Maurer, the chief operating officer of fixed networks, will become chief operating officer for the entire business, while Marcus Weldon, the chief technology officer, will retain his current role but take up a position in Nokia's global leadership team, reporting directly to Suri.

Chief Strategy Officer Kathrin Buvac gets additional responsibilities for what Nokia calls the "incubation" of new business opportunities.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
3/19/2017 | 1:20:11 PM
Re: Doing the Nokia shuffle....
It's interesting to see Nokia competing with the likes of ZTE and Huawei - those are some formidable competitors. 

Hopefully a restructuring will help streamline operations. 
Ray@LR
100%
0%
Ray@LR,
User Rank: Blogger
3/17/2017 | 6:51:55 AM
Doing the Nokia shuffle....
For the sake of everyone at Nokia, I hope this is the last reshuffle for a long time - the business unit/management responsibility chess game must be unsettling internally and potentially confusing to the outside world.

But at least this gives us the chance to refer to Leprince as the King of Nokia Global Services...
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Cisco: Mentoring Critical to Attract & Retain Women

7|19|17   |   6:40   |   (1) comment


Liz Centoni, senior vice president and general manager of Cisco's Computing System Product Group, shares why mentoring in all its forms is important for women and what Cisco is doing that's made a difference for women in tech.
LRTV Custom TV
Gigabit LTE With Snapdragon 835

7|12|17   |     |   (1) comment


At an event in Wembley stadium, EE used its live network to demonstrate gigabit LTE using a Sony Xperia XZ Premium smartphone with a Qualcomm Snapdragon 835 chip.
LRTV Custom TV
Implementing Machine Intelligence With Guavus

7|12|17   |     |   (0) comments


Guavus unites big data and machine intelligence, enabling many of the the largest service providers in the world to save money and drive measureable revenue. Learn how applying Machine Intelligence substantially reduces operational costs and in many cases can eliminate subscriber impact, meaning a better subscriber experience and higher NPS.
LRTV Custom TV
Unlocking Customer Experience Insights With Machine Intelligence

7|12|17   |     |   (0) comments


When used to analyze operational data and to drive operational decisions, machine intelligence reduces the number of tasks which require human intervention. Guavus invested in Machine Intelligence early. Learn about the difference between Machine Learning and Machine Intelligence.
Women in Comms Introduction Videos
Verizon VP Talks Network, Career Planning

7|12|17   |   4:49   |   (0) comments


Heidi Hemmer, vice president of Technology, Strategy & Planning at Verizon, shares how bold bets and the future of tech define her career.
Telecom Innovators Video Showcase
Masergy's NFV Journey

7|11|17   |     |   (0) comments


Ray Watson, vice president of global technology at Masergy, discusses the advantages and challenges in entering the still-maturing NFV market for the past three years.
Telecom Innovators Video Showcase
Mavenir on RCS Cloud Platform & Multi-ID

7|10|17   |     |   (0) comments


Guillaume Le Mener, head of marketing and corporate development at Mavenir, discussed RCS and the recent launch of Multi-ID, which supports T-Mobile's DIGITS, the revolutionary new technology that breaks down the limitation of one number per phone and one phone per number.
LRTV Custom TV
ADTRAN Executive Outlines Trends in Next-Generation 10-Gigabit Cable Networks

7|10|17   |     |   (0) comments


Hossam Salib, VP of Cable and Wireless Strategy at ADTRAN, outlines key trends as MSOs begin to deploy next-generation Gigabit and 10-Gigabit cable networks. In the interview, Hossam outlines the advantages of a Fiber Deep architecture, FTTH options including EPON and RFoG, and the importance of SDN and NFV in building next-generation high-bandwidth cable networks.
LRTV Interviews
Global Capacity: Bandwidth Demand Driving Ethernet Growth

7|6|17   |   6:37   |   (0) comments


At Light Reading's Big Communications Event in Austin, Texas, Global Capacity's VP of Marketing Mary Stanhope talks about how the demand for bandwidth is changing the way service providers deliver broadband services.
LRTV Interviews
Colt's Services Chief on Digital Delivery

7|5|17   |   16:12   |   (0) comments


Rogier Bronsgeest, the chief customer experience officer (chief CEO!) at Colt, discusses the way in which the service provider interacts with its customers these days and his aggressive net promoter score (NPS) targets.
Women in Comms Introduction Videos
BT VP: Women Should Fill Security Talent Gap

7|5|17   |   6:00   |   (2) comments


By 2020 there will be six security jobs for every qualified worker, and Kate Kuehn, vice president of Security for BT in the Americas, says BT wants to encourage women to fill the shortage in jobs.
LRTV Interviews
Colt Sales Exec on Services Trends

7|4|17   |   12:59   |   (0) comments


Colt's sales director for enterprise, James Kershaw, sheds some light on the services currently in demand and how network upgrades are influencing customer demand.
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Mobile to Power Online Video Consumption – Zenith
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 7/19/2017
Can Mushroom Sprout in Crowded SD-WAN Field?
Carol Wilson, Editor-at-large, 7/18/2017
AI Will Be Ubiquitous in 2020 but Overhyped in 2017 – Gartner
Sarah Thomas, Director, Women in Comms, 7/18/2017
Facing the Facebook Video Threat
Gary Miles, Chief Marketing Officer, Amdocs, 7/17/2017
Comcast Accelerates Into 15 IoT Markets
Mari Silbey, Senior Editor, Cable/Video, 7/18/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Fuzzy Quick Fix Click Here
If you can't access it, is it really broken?
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.