YOU ARE AT:Network InfrastructureNokia says 'reset' is behind it, acceleration and scale are ahead

Nokia says ‘reset’ is behind it, acceleration and scale are ahead

NEM impacted by Verizon 5G snub, has a ‘new baseline’ for its North American business

Nokia reported fourth-quarter and full-year earnings in line with analysts’ expectations, although its business did see an impact from Verizon’s choice of Samsung 5G equipment over Nokia’s.

Pekka Lundmark, president and CEO of Nokia, said that 2021 was “truly transformational for Nokia in many ways” and that it was a time of refocusing on and strengthening its technology leadership.

Nokia reported net sales for the fourth quarter of 6.4 billion Euros, down from 6.6 billion Euros in the year-ago quarter; in the fourth quarter, the company reported 10% growth in its network infrastructure, but a 16% drop in sales in its mobile networks business.

In its Mobile Networks group, which accounts for 43% of its revenues, sales were down 5% year-over-year, which Lundmark said was expected due to “lower market share in North America because of the decisions our customers made in 2020.” He was referring to Verizon’s decision in 2020 to award a $6.6 billion network equipment contract to Samsung, rather than Nokia.

In terms of its position in the North American market, Lundmark said noted that Nokia had secured five-year 5G deals with both T-Mobile US and AT&T, as well as wins with smaller operators that establish “a new baseline for our North American business, and that’s not a bad baseline.” He said that based on the capex plans of its key customers, Nokia sees continued strong demand, and “we have every reason to be hopeful and optimistic.”

“Largely, we can now say, and this has been confirmed by multiple customers, that we have closed the gap to competition in 5G,” he added. With an increased focus on its technology development, and in areas such as service provider routing and cloud and network services, Lundmark said that Nokia considers its “reset” behind it.

“So with the reset now behind us, it’s time to accelerate. And … then after accelerate, scale,” Lundmark said.

One of the areas in which it sees room to scale is private networks. Nokia says it has 420 private wireless customers across two segments: Wide area networks for railways, utilities and similar authorities; and campus wireless, meaning industrial campuses. Lundmark said that Nokia estimates that there are 14 million industrial campuses in the world and a “significant part of them will one way or another invest in [the] new generation of networking in the coming years,” and that therefore the company has “decided to double down our investment in campus wireless.”

Asked about supply chain constraints’ impacts on Nokia’s business, Lundmark said that the situation has “stabilized” but continues to be tight. “There are still going to be, at least in the first half of this year, situations where people live more or less hand to mouth,” he said. He said that Nokia’s top-line growth could have been a bit higher last year had more semiconductors been available. “We have managed this very challenging situation very well without any major casualties or any major customer losses,” Lundmark said. “But [the] situation continues and calls for continuous day-to-day management” and, he added, “We are not out of the woods yet.”


Kelly Hill
Kelly Hill
Kelly reports on network test and measurement, as well as the use of big data and analytics. She first covered the wireless industry for RCR Wireless News in 2005, focusing on carriers and mobile virtual network operators, then took a few years’ hiatus and returned to RCR Wireless News to write about heterogeneous networks and network infrastructure. Kelly is an Ohio native with a masters degree in journalism from the University of California, Berkeley, where she focused on science writing and multimedia. She has written for the San Francisco Chronicle, The Oregonian and The Canton Repository. Follow her on Twitter: @khillrcr

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