(Bloomberg) — Investments into next-generation wireless networks will span a much longer time than the 4G cycle, giving underdog Nokia Oyj time to catch up with rivals that zoomed past it for early rollouts, according to its chief executive.
The Finnish telecommunications gear maker on Thursday presented an outline of how it plans to regain competitiveness by 2023, with Chief Executive Officer Pekka Lundmark trimming as many as 10,000 jobs in two years to pour the money saved into new hires in 5G. The actions are necessary, but not a sign that Nokia would have missed the boat, he said.
The main buildouts of fifth-generation networks will span over a time period “twice as long as the 4G peak” because of the industrial digital revolution they enable, Lundmark said in an interview on Thursday. “So no, we’re not late.”
Delays in rolling out 5G across Europe will buy Nokia time as it seeks to take back market share from Sweden’s Ericsson AB and China’s Huawei Technologies Co, which made gains early in the cycle. Missteps in designing 5G gear have largely been overcome, said Lundmark, who took over as CEO in August. Nokia is now ramping up shipments of base stations that contain its more cost-effective proprietary system-on-chip.
“We were not that successful in the first phase of 5G, our product was not ready,” he said, referring to when the cycle suddenly started in China in 2019. “It’s significantly more competitive now and we believe that when we get through this year we will have restored our competitiveness.”
Investors expressed their doubts over the plans, sending Nokia share down as much as 5.8% in Helsinki trading, the most in more than six weeks.
The initial share loss in radios was particularly visible in China as operators made their first round of equipment purchases, said Tommi Uitto, head of Mobile Networks. Nokia is participating in subsequent rounds to stem further erosion, even as it may not be able to take back meaningful share, he said.
“We believe that any risk of significant footprint loss is significantly reduced,” Uitto said.
(Adds shares, comment from Mobile Networks’ chief from sixth paragraph)
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