“We are open to selling certain businesses. We look at this portfolio all the time. If we sell a certain business, maybe as an exception we will keep some geography, but as a rule we will take it out, but we don’t want to sell big businesses,” Batra said. The company sold its joint venture with Huawei to Chinese wireless technology firm TD Tech.
Asked if he would exit non-leading segments, Batra said, “Either we don’t lead or we know we can’t lead. But there are businesses where we know we can lead. For example, in the optical business, we are not the market leader, the third largest globally, but the business profile is good, on the back of a good product and geopolitics,” he said.
His comments came amid Nokia’s global restructuring in the fourth quarter of last year, when it overhauled its operations, consolidated its core network equipment business and cut 14,000 jobs.
Nokia has combined its sales and marketing teams with its Mobile Networks, Network Infrastructure, Cloud and Network Services business units across all geographies, which will help position the company for longer-term growth amid market uncertainty and its order to save between $850 million and $1.3 billion by 2026. The changes are also reflected in India, where it is reported that around 200-250 people have been laid off and Tarun Chhabra, the head of mobile networks, has been appointed as the new head of India from April 2024.
The senior executive said the steps were taken in the interest of shareholders as shares receiving a conglomerate discount would now be better valued as investors would have clarity on the company’s structure as well as the value of its individual businesses in comparison with similar companies. A conglomerate discount is when markets value a group of businesses at less than the sum of its parts.
“We try to give each unit full autonomy in operations but also in detection. We are trying to arrive at a structure where every business can be valued by investors,” Batra added.
The top executive also said that the Indian government should allow the Finnish technology supplier to have preferential access to the market, where there are 19,000 people, Nokia’s biggest resource globally, who are engaged in local manufacturing and local research and developments.
“I would like to do a lot more in India and in certain markets, I don’t have equal access. I would like to understand what would take me there because for me this market is very interesting, especially for 6G,” said Batra. Nokia opened its 6G lab at its global R&D center in Bengaluru in November.
Nokia’s chief strategy and technology officer praised India’s efforts to be part of the initial discussions on 6G spectrum and setting standards globally. He noted that 6G deployment is expected between 2029 and 2031, with standards expected several years before that. The Indian government announced its plans for 6G by 2030 through a vision document last year.
He also said that geopolitical changes will continue to provide tailwinds for Nokia as equipment replacement by Chinese suppliers in various markets will continue in markets similar to developments in markets such as India, Australia and Japan. Chinese equipment makers Huawei and ZTE had a major presence on Indian networks until 2020, when the government approved the National Security Directive in the telecom sector list, which allows only trusted products from trusted sources to be used by Indian telcos. Chinese equipment is excluded from this list so far. Nokia and rival Ericsson were the main beneficiaries of this dictate. Telcos Reliance Jio and Bharti Airtel in India have almost entirely deployed their 5G networks on Nokia and Ericsson equipment.
India is among the top markets for Nokia, which is seeing annual revenue growth in 2022-23 on the back of lightning-fast 5G deployment by Indian operators, which CEO Pekka Lundmark called “remarkable” on several occasions. The rate of 5G deployment is expected to slow in 2024.
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Posted: Mar 04, 2024 8:42 PM IST
