Finnish communications equipment giant Nokia confirmed on March 4 that current CEO Rajeev Suri will step down at the end of August after 25 years at the company, and his role will be replaced by the president and CEO of energy company Fortum. Officer Pekka Lundmark took over to revive its “shaky” 5G business.
It is worth noting that, in addition to Suri, in December last year, Nokia announced that its chairman of the board Risto Siilasmaa (Risto Siilasmaa) will also step down in April 2020, and the current vice chairman of the board of directors Sari Baldorf (Sari Baldauf) will take over the position.
As one of the earliest communication equipment companies involved in the research and development of 5G technology, Nokia began to lay out 5G patents in 2013. However, it is found that as of March 2, the total number of 5G commercial contracts disclosed by Nokia is still fixed at 67, which is less than Huawei’s 91 and Ericsson’s 81.
The company’s share price has fallen by about a third in the past 12 months as investment in 5G communications equipment shifts its focus, delaying its return to growth and profitability and hurting its competitiveness. .
Huge acquisition distracts
It is understood that Suri will continue to serve as an adviser to Nokia’s board of directors until January 1, 2021 after stepping down on August 31 this year. And Lundmark is expected to take over as CEO and president of Nokia on September 1. He served as Nokia’s executive from 1990 to 2000, including Nokia’s vice president of network strategy and business development.
Suri joined Nokia in 1995 and has worked for 25 years. On April 25, 2014, Nokia and Microsoft reached a mobile phone business deal, officially announcing its withdrawal from the mobile phone market. On the same day, Suri became Nokia’s chief executive and president.
Nokia said that Suri had previously disclosed his intention to resign to the board of directors, and they have been working hard to develop a smooth transition plan.
Suri said: “After 25 years at Nokia, I wanted to do something different. Nokia will always be a part of me, and I want to thank everyone I’ve worked with over the years for helping Nokia transform Doing better makes me a better leader.”
Previously, it was reported that Nokia was exploring a range of strategic options, including selling some of its business assets in a possible merger deal, under the pressure of fierce competition in the market.
In fact, like rivals Huawei and Ericsson, Nokia has turned its attention to building a 5G network technology and product portfolio in recent years.
Analysts say Nokia’s $16.6 billion acquisition of communications systems maker Alcatel-Lucent in 2015 distracted it from becoming a market leader in 5G products and technologies.
However, Nokia Chairman Risto Silasma said in a statement: “The acquisition of Alcatel-Lucent is a thing of the past, the 5G world is upon us, and I am delighted that Lundmark has agreed to join Nokia.”
It is reported that before Suri’s resignation, Nokia experienced a turbulent few years and poor performance. In October 2019, the company lowered its forecast for the year, as well as its 2020 profit forecast, and suspended its dividend.
As for the arrival of Lundmark, Nokia’s board said the company will have an excellent leader who can “continue to deliver strong shareholder returns, reshape the company’s strategy and position it as a powerful player in the transformation of the global energy industry. participants”.
In addition, Nokia announced in December last year that its chairman Silasma will also announce his resignation in April this year, and will be replaced by the current vice chairman of the board of directors, Baldauf. The aforementioned report said that Baldorf and Lundmark have also worked closely in recent years, with the former serving as chairman of Fortum’s board of directors from 2011 to 2018.
Competition in the 5G market is fierce
In 2014, Nokia officially withdrew from the mobile phone market after reaching a mobile phone business deal with Microsoft.
Nokia is now mainly composed of two departments, one is Nokia Innovation Technology, which is mainly engaged in new technology research and development, patent licensing, digital health and so on. The other part is Nokia Communication Technology. Its main customers are telecom operators around the world, providing them with base stations, communication equipment and other products for 5G network technology research and development, accounting for about 90% of its revenue.
With the acceleration of 5G construction progress, Nokia has also won many 5G orders. On February 10, Nokia announced that it has reached 67 5G commercial contracts worldwide, with customers covering AT&T, KDDI, Korea Telecom, LG Uplus, SK Telecom and other telecom operators. However, Nokia’s global rivals are also accelerating their quest for 5G market share.
Huawei executive Ding Yun revealed that the company has won 91 5G commercial contracts and shipped more than 600,000 5G Massive MIMO AAU (Active Antenna Unit) modules.
In addition, the official website of Ericsson, the Swedish communication equipment giant, shows that the company has signed 5G commercial agreements and contracts with 81 operators around the world, and has reached public 5G contracts with 35 operators. 5G commercial network provides equipment.
Ericsson President and CEO Borje Ekholm said: “We have regained our technological leadership, recovering lost ground in several markets and improving our performance. Today, Ericsson is leading the way in 5G. “
Data shows that Nokia has fallen behind Huawei and Ericsson in the competition for the 5G market. The company said last year that it would increase spending in response to competitive pressures in the 5G network business, which may limit future profits.