On April 30, Nokia released its Q1 2020 financial report. On the same day, Nokia’s CEO Rajeev Suri and Nokia’s CFO Kristian Pullola had a telephonic press conference, where they explained the present and the future strategy on which Nokia is holding on, and cleared some false air surrounding Nokia.
We will present all the details topic-wise, which are as follows:
Nokia’s current 5G status
Rajeev Suri said that with the recent win with Taiwan Star, Nokia has 70 5G deal wins and 21 live networks deployed.
Rajeev Suri said that in a recent development from China Unicom’s side, Nokia has been selected as the only foreign supplier for China Unicom’s 5G core, with a 10% market share, along with Huawei and ZTE. Nokia also received a 17% share in virtualized IMS.
Though he added that a return to 5G radio in China is not out of the outlook, but Kristian Pullola stressed the point that they optimized Nokia, and its 5G R&D work for the profitable markets, and maybe they did not do the local customizations required for China.
Delay in 5G in Europe
Rajeev Suri said that there could be delays in some countries in Europe where spectrum rollouts get pushed out, which is already happening in some of the markets.
Impact due to COVID-19
As per Rajeev Suri, Nokia did not see a decline in demand in the first quarter, however, an increase in supply and delivery challenges in some countries is possible, and most of the impact will be in Q2. He said that getting customer acceptance for new product deployments has been difficult, and they expect the net sales to get pushed to future periods rather than lost.
Kristian Pullola said that that they expect their primary addressable market, excluding China, to decline in 2020.
Decrease in investment in Research & Development (R&D)
Kristian Pullola said that R&D absolute spending was down a bit, because of cost measures they have been pushing through. Rajeev Suri added that despite the majority of R&D employees working from home, there is not any impact on Nokia’s roadmaps, and some key software releases are proceeding ahead of schedule.
Increased investment in 4G capacity
Rajeev Suri said that the video conferencing systems are growing by 700-800% in a matter of days, and they are mostly impacting the network. He added that this in turn could increase investments in fixed and IP (Internet Protocol) and optical and even 4G capacity.
Nokia’s views on OpenRAN (O-RAN)
Nokia believes that industry eventually will be open, and they need to play rather than hide. However, on O-RAN, it will still take some years before it becomes meaningful for anybody.
Nokia’s outlook on future and combatting COVID-19
Rajeev Suri believes that the networking industry is fairly resilient to the crisis, although not immune. He added that Nokia’s top focus areas are protecting its employees, maintaining critical network infrastructure for customers, and ensuring a strong cash position. And, Nokia has the scale necessary to stay competitive.
Feel free to share your views in the comments section below! 😉