Nokia to replace chief as doubt grows over 5G strategy
Nokia is replacing its chief executive as the Finnish telecoms equipment maker struggles in the battle to dominate 5G mobile networks amid fierce competition from China’s Huawei and Sweden’s Ericsson.
Pekka Lundmark, chief executive of Finnish utility Fortum, will take over as head of Nokia on September 1 from Rajeev Suri as questions have multiplied about the network gear maker’s strategy in recent months.
Nokia has failed to capitalise on Chinese suppliers such as Huawei being banned in the US over security concerns and has reported weak results in recent quarters, warning that its rivals were being aggressive in winning 5G deals.
The Finnish group said Mr Suri had indicated to the board that he wanted to step down once a succession plan was in place and his resignation means that Nokia will replace its top two officials this year, with chairman Risto Siilasmaa stepping down at April’s annual meeting.
Investors have grown increasingly sceptical of Mr Suri’s six-year tenure in charge of Nokia, during which its shares have fallen by more than a third, including a drop of a quarter in the past four-and-a-half months as shareholders have queried why rival Ericsson has performed better in early 5G deals.
Mr Siilasmaa praised Mr Lundmark’s record of “shareholder value creation at large business-to-business companies”. Before Fortum, Mr Lundmark was chief executive of Kone Cranes and spent a decade at Nokia, including in its networks business.
“Strong values, leading innovation and unflinching commitment to our customers have always been core to Nokia and I want to put this even more at our centre as we move forward,” said Mr Lundmark.
Mr Siilasmaa singled out Mr Suri’s “loyalty, commitment, and deep personal integrity” while the outgoing chief executive — who together with the chairman moved Nokia out of mobile phones and towards its current focus on making mobile network gear — said that after 25 years with the company he “wanted to do something different”.
Nokia and Ericsson enjoy a de facto duopoly in the US due to its bar on Huawei and other Chinese suppliers but the Finnish group has been unable to convert US pressure on its allies to do the same into improved financial results.