The eve of last Mobile World Congress, Nokia anticipated the announcement of its new logo, with which it intends to be recognized as a B2B (business-to-business) company to distance itself from an image associated with the famous mobile phones that it manufactures and sells -under the Nokia brand – a franchised company in which it only owns a minority percentage.
Formally, it is a subtle graphic change, conceived to support the strategy with which the Finnish company seeks to increase its presence in the business segment, the fastest growing in the telecommunications market. Currently, of the 25,000 million euros that Nokia entered in 2022, 80% corresponded to its sales to operators, whose investment capacity is diminished.
In 2020, upon returning to Nokia as CEO, Pekka Lundmark proceeded to restructure it into four global business units. In charge of one of them –Network Infrastructure (NI), on which a large part of the billing to companies depends– is the Spanish executive Federico Guillén. Since then, NI has gone from 6,700 million to 9,000 million euros in turnover, 35% more: “In 2023,” Guillén advanced, interviewed during the MWC, “I hope to increase the operating profit of the division in a range of between 11% and 14%â€. Next Wednesday, the quarterly results will give a first clue.
For this mission, it has the fiber optic demand cycle. “We have spent ten years discussing whether it was better to lay fiber or continue exploiting copper, until a bloody virus brought us the answer […] With little fiber and without investing in mobile networks, with people confined and without going to work, the pandemic could have been an economic disaster, not just a human one. Nokia, in addition to the 5G infrastructure – which corresponds to another division, the best known of the company – supplies fiber optics to the operators. Both technologies complement each other –he clarifies– because if a lot of 5G traffic enters the network, the operator has to transport it, for which he will need optical access and equipment that we sell himâ€.
Also submarine cables, a technology that years ago seemed to languish, have now resurfaced thanks to globalization and the demand from cloud service providers. “It is a wave of innovation and investment that means a two-year order book and the permanent occupation of our cable ships.”
Not everything is explained by external factors. “Fortunately, these peaks in demand occur when we are best placed technologically.” Before the pandemic, Nokia had developed a new proprietary chip for its network equipment that is allowing it versatility to which it owes market shares of up to 50% in certain product lines. To which Guillén adds the boom that large data centers are experiencing.
According to his forecast, the global network infrastructure market will continue to grow, due to the insatiable need for coverage. Depending on which region you are talking about, it will grow above 25%, in some cases 50%. By the way, “there is still a long way to go until the world has plenty of fiber. And in addition to the new deployments, it will be necessary to renew the old ones and change cards, which Nokia also sells themâ€.
He is not surprised by the question about Chinese competitors, whom he describes as “very reputable.” With this note: “In mobile infrastructure, which China has deployed massively over the years, Western providers, who used to have a 40% share, now have 5%.”
