Nokia (News - Alert) is making some significant changes within its organization in an effort to better respond to changing dynamics in the cellular service provider marketplace. That includes separating its services business from its products and solutions business, and reassigning some of its leadership. In announcing the news, the company disclosed that Samih Elhage, Nokia’s Mobile Networks head, is leaving the company.
The reorganization will see the Mobile Networks business group split into the Mobile Networks, which will focus on products and solutions, and Global Services, which will focus on services.
Current CIO and COO Marc Rouanne becomes president of the Mobile Networks business group. Meanwhile, Nokia’s executive vice president of global services Igor Leprince becomes president of the new Global Services effort. And current COO of Fixed Networks Monika Maurer becomes group COO.
Nokia is also splitting its Chief Innovation and Operating Officers organization.
Operating activities will be handled by the COO of the organization. Innovation will be put under Nokia’s CTO. And incubation will be handled by the CSO.
The group leadership team changes go into effect April 1.
This change comes as the mobile networking arena becomes more challenging for suppliers given cellular service providers have completed their 4G rollouts, and as Chinese suppliers capture greater market share. Indeed, Nokia's fourth quarter 2016 networks sales declined 14 percent compared with 2015. The results were offset somewhat by savings due to the Alcatel-Lucent (News - Alert) integration and by Alcatel's submarine cable business.
Of course 5G is coming, but this new cellular technology has not yet even been standardized, so it will take a while until carriers are ready to sign contracts. Plus, 5G is expected to be rolled out over time, as opposed to all at once.
And now Nokia and the other long-time telecom network equipment giant, Ericsson (News - Alert), are having to compete against low-cost (and some sources say, in some cases, no-cost) solutions from Huawei and ZTE. Huawei in particular has been amazingly successful at capturing market share. In fact, the company several years ago overtook Ericsson as the world’s leading network equipment supplier.
Edited by Alicia Young