Nokia Unveils Strategic Transformation: New Operating Model, Financial Goals, and Leadership Changes
Nokia, a global leader in connectivity, is set to embark on a significant transformation, as announced during its Capital Markets Day 2025. This strategic shift aims to position Nokia at the forefront of the AI-driven evolution of networks and capitalize on the AI supercycle. The company’s new approach includes a refined operating model, a fresh long-term financial target, strategic KPIs, and a reshuffling of its Group Leadership Team.
The strategic priorities are as follows:
- Accelerate Growth in AI & Cloud: Nokia aims to leverage AI and cloud technologies to boost growth.
- Lead the Next Era of Mobile Connectivity: With AI-native networks and 6G, Nokia seeks to stay ahead in the mobile connectivity race.
- Grow by Co-innovating with Customers and Partners: Collaboration is key to innovation and market success.
- Focus Capital Where Nokia Can Differentiate: Strategic investments will be made to maintain a competitive edge.
- Unlock Sustainable Returns: Ensuring long-term profitability and shareholder value.
Operating Segment Changes:
Nokia is reorganizing its business into two primary segments: Network Infrastructure and Mobile Infrastructure.
- Network Infrastructure: This segment will focus on rapid global AI and data center build-out, catering to telecommunications customers. It includes Optical Networks, IP Networks, and Fixed Networks, led by David Heard.
- Mobile Infrastructure: This segment will lead the industry in core and radio network technology, AI-native networks, and 6G. It comprises Core Software, Radio Networks, and Technology Standards, initially led by Justin Hotard.
Leadership Adjustments:
– Raghav Sahgal will become Nokia’s Chief Customer Officer, ensuring seamless customer experiences.
– Patrik Hammarén will continue in the Group Leadership Team as President, Technology Standards.
– Tommi Uitto will step down from the Group Leadership Team.
Portfolio Businesses Segment:
Units not considered core to the company’s future strategy will be moved to this segment, including Fixed Wireless Access CPE, Site Implementation and Outside Plant, Enterprise Campus Edge, and Microwave Radio.
Nokia Defense: Nokia Defense will be launched as an incubation unit for defense-grade solutions, building on Nokia Federal Solutions’ strengths.
Financial Targets and KPIs:
– New long-term financial target: EUR 2.7 billion to EUR 3.2 billion in comparable operating profit by 2028.
– Strategic KPIs include net sales growth, operating margins, gross margins, operating profit, and free cash flow conversion.
Provisional Financial Breakdown:
Approximate figures for Q4’24 – Q3’25 under the new segment structure are provided, offering a glimpse into Nokia’s financial trajectory.
This strategic transformation is a bold move by Nokia to adapt to the rapidly changing technology landscape and secure its position as a leader in the AI era.