“Nokia is considering selling parts of its business to benefit shareholders.”
“The company wants fair access to the Indian market as it prepares for the rollout of 6G.”
“Nokia combined its sales and marketing teams with its business units, covering mobile networks, network infrastructure, cloud, and network services, in all regions. This move aims to prepare the company for future growth and save between $850 million and $1.3 billion by 2026, especially during uncertain market conditions.”
“At the Mobile World Congress last week, Nishant Batra, Nokia’s chief strategy and technology officer, mentioned that Nokia is ready to sell or move away from businesses where it can’t become a market leader.”
“We’re considering selling some businesses. We regularly review our portfolio. If we sell a business, we might keep it in some areas, but usually we’ll exit completely. However, we’re not planning to sell our main businesses,” Batra explained. “We recently sold our joint venture with Huawei in China, TD Tech.”
“If we’re not leading in a segment or know we can’t lead, we might consider moving out. However, in areas like the optical business, where we’re not the market leader but still have a strong position globally, we see potential due to good products and geopolitics,” Batra explained.
“He shared these thoughts as Nokia underwent global restructuring in the last quarter of the previous year. The company reorganized its operations, streamlined its significant network equipment business, and unfortunately had to let go of 14,000 employees.”
“Nokia combined its sales and marketing teams with its business units that handle mobile networks, network infrastructure, cloud, and network services worldwide. This move aims to prepare the company for future growth and save between $850 million and $1.3 billion by 2026 due to efficiency. Similar changes occurred in India, where approximately 200-250 employees were let go. Additionally, Tarun Chhabra, previously the head of mobile networks, was appointed as the new India head, starting April 2024.”
“The senior executive explained that these actions were aimed at benefiting shareholders. Previously, the company’s stock was undervalued because it was seen as a conglomerate. Now, with a clearer structure and the value of each business segment defined, investors can better understand its worth compared to similar companies. This approach helps eliminate what’s known as a conglomerate discount, where the market values a group of businesses less than the sum of their individual values.”
“What we aim to achieve is to grant each unit independence in both operations and disclosures. Our goal is to establish a structure where each business can be individually valued by investors,” Batra explained.
“The head executive also mentioned that the Indian government should allow the Finnish tech company to have special access to the market, where it has 19,000 employees—Nokia’s largest workforce globally—involved in local manufacturing and research and development.”
“I want to expand further in India and some other markets, but I don’t have the same opportunities everywhere. I’m keen to know what steps I need to take to achieve that, especially in the 6G sector,” Batra mentioned. Nokia established its 6G lab at its global Research and Development center in Bengaluru in November.”
“The person in charge of strategy and technology at Nokia praised India’s involvement in early talks about 6G spectrum and global standards. He mentioned that 6G rollouts are anticipated between 2029 and 2031, with standards likely a few years before. The Indian government has outlined its 6G goals by 2030 in a vision document released last year.”
He also mentioned that changes in global politics will keep benefiting Nokia as the replacement of Chinese vendors’ equipment continues in various markets. This trend is seen in countries like India, Australia, and Japan. Previously, Chinese companies like Huawei and ZTE had a significant presence in Indian networks until 2020 when the government approved a National Security Directive for the Telecommunication Sector. This directive allowed only trusted products from trusted sources to be used by Indian telecom companies, excluding Chinese equipment. Nokia and its competitor Ericsson have greatly benefited from this decision. Telecom companies like Reliance Jio and Bharti Airtel in India have deployed almost all of their 5G networks using Nokia and Ericsson equipment.
India is one of Nokia’s biggest markets, and its revenues have been increasing every year until 2022-23. This growth is mainly because Indian telecom companies have been rolling out 5G networks rapidly. Nokia’s CEO, Pekka Lundmark, has praised India’s progress in this area multiple times. However, the pace of 5G rollouts is expected to decrease in 2024.