HELSINKI (Reuters) – Nokia’s largest investor said on Tuesday it had high expectations of new management after the Finnish telecoms equipment maker had failed to live up to its potential under previous leadership.
FILE PHOTO: Pekka Lundmark, when president and CEO of Finnish utility company Fortum, poses after a news conference in Duesseldorf, Germany, October 8, 2019. REUTERS/Thilo Schmuelgen/File Photo
“Nokia’s performance has not met our expectations in recent times and of course that is a disappointment, but we look at this over the long run,” Antti Makinen, CEO of Solidium, the Finnish government’s investment firm, told Reuters.
“The previous management had become a burden,” he added.
Pekka Lundmark, the new CEO, took over from Rajeev Suri in August, a month earlier than planned. Under Suri, Nokia last year slashed its profit outlook and halted dividend payouts, after product missteps that hurt its 5G ambitions and knocked more than a fifth off its market value.
“We believe the (CEO) exchange alone will have a good effect,” Makinen said. “We have high expectations of Nokia and the new management that the potential we see in it will be realised.”
A Nokia spokeswoman declined to comment.
Nokia in May also got a new chairwoman in Sari Baldauf, one of the most high-profile female executives in the global telecoms industry. She took over from Risto Siilasmaa who chaired the Finnish firm for eight years.
Solidium, which became an investor in Nokia in 2018 after buying a 3.3% stake, now owns more than 5%.
Rival Ericsson, which also replaced much of its top management in 2016, has been able to capitalise on the 5G rollout faster. Both firms have also benefited from U.S. moves move to ban China’s Huawei from bidding for telecom contracts.
Nokia’s financial potential had not been realised as a merger with Alcatel-Lucent took long time and 5G emerged more quickly than operators and companies expected, Makinen said “We don’t believe it will remain this way in the long run … Nokia has a good roadmap to catch up,” he added.
Reporting by Anne Kauranen in Helsinki, writing by Supantha Mukherjee in Stockholm, editing by Mark Potter