Nokia is in for a tough 2020. The giant vendor is already battling a tarnished reputation in the 5G radio access network (RAN) market, lost market share in 2019 (according to research firm Dell'Oro) and has become caught up in speculation about its future. (See Nokia hires 350 R&D experts to fix 5G problems, Huawei, ZTE continue their advance under US fire – Dell'Oro and Nokia hires advisers for possible asset sales or a merger – reports.)
And now its president and CEO, Rajeev Suri, has quit.
Suri has been at the helm of Nokia for more than a decade, but now he's on his way out. Nokia says this has been on the cards for some time and a replacement has been found, and unveiled, in the form of Pekka Lundmark, currently the president and CEO at Finnish energy firm Fortum. (For the full story, see Nokia CEO Suri quits after 5G setbacks.)
But while Suri's departure was announced today, he isn't vacating the CEO's office until the end of August – that's six months away – after which he will work alongside Lundmark for four months during a transition period.
On paper that might make sense: Get the news out now, let everyone get used to it and prepare. Nokia's chairman, Risto Siilasmaa, even took the opportunity today to quash the rumors that strategic options, including a possible sale of assets or a merger, are currently being considered.
But the news of Suri's will be a massive distraction for Nokia's workforce, as well as its partners and customers. Without doubt, the number one topic of conversation between Nokia employees during the next six months (even ahead of MWC's cancellation and the impact of COVID-19) will be the changes Lundmark will make to the company once he has his feet under the table. Because there will be changes.
For the next six months, Nokia staff will be wondering if they will still have a role at the company by the end of the year – whether their unit might be put up for sale in 2021 or even closed down. Even if the likelihood of that happening is remote, it's what everyone with a Nokia employment contract will be thinking.
The vendor's rivals will know this too: In the fixed broadband market, where Nokia saw its sales slip 5% in 2019, the likes of ADTRAN and Calix will likely look to capitalize. The optical and IP transport units both had a good year, but the likes of Cisco and Ciena will still look to make the most of a competitive opportunity. (See Nokia sees light at end of 5G tunnel.)
This is where Suri, his management team and the Finnish vendor's HR department will have to be on the top of their game for the next six months. Nokia's staff need to be focused on the job in hand – winning back market share, improving the company's 5G reputation, making further inroads in the telco cloud market – not worrying about their future.
The situation might look a little bleak within Nokia today, but as the chairman said on today's media call to explain Suri's departure, "it's not all doom and gloom." The company ended 2019 well, is fixing its 5G radio access network issues, and has been performing well in telco software and enterprise networks, as well as in optical and IP transport.
But the next six months need to about market focus and forward thinking, not introspection and paranoia. Suri has one last job to do before he clears his desk and that's to make sure the company doesn't get constrained by inertia before he hands over the keys to Lundmark.
— Ray Le Maistre, Editor-in-Chief, Light Reading, special to Broadband World News