Nokia CEO Rajeev Suri Is Stepping Down at Telecom-Equipment Maker
02 March 2020 - 9:28PM
Dow Jones News
By Parmy Olson
Nokia Corp.'s Rajeev Suri is stepping down as chief executive,
amid the Finnish telecom-equipment maker's struggle to take
advantage of a global shift to the newest generation of mobile
networking.
Mr. Suri will be replaced by Pekka Lundmark, who starts his new
role on Sept. 1, the company said. Unlike Mr. Suri, who is a
24-veteran of Nokia, Mr. Lundmark comes from outside the company.
He is currently chief executive of Finnish energy company
Fortum.
Nokia has been battling Ericsson AB of Sweden and China's Huawei
Technologies Co. to provide equipment powering the latest
generation 5G mobile networks to telecom companies globally. 5G
promises faster connection speeds and the ability to connect troves
of new devices to the internet. But its rollout has been
challenging for Nokia.
Last October, Nokia's shares dived 20% after the company
announced it would halt its dividend to help cover the growing
costs of developing, building and selling 5G equipment.
In February, the company warned of flat demand for telecom
equipment and rising competition for 5G deals in the year
ahead.
Nokia and its closest competitor, Ericsson, have fought to take
advantage of a recent campaign by U.S. officials to pressure other
countries not to integrate Huawei into their systems, alleging its
gear poses a national security threat. Huawei has denied any spying
threat from its devices.
Picking up any business that falls away from Huawei has been
seen as critical in the separate turnaround efforts at both Nokia
and Ericsson, which are the No. 2 and No. 3 telecom-gear makers by
sales, respectively, with Huawei at No. 1.
Nokia's wider difficulties stem in part from digesting its $16.6
billion acquisition of Alcatel Lucent S.A., a deal Mr. Suri oversaw
in 2015. Though the deal was aimed at growing Nokia's
communications products and creating a one-stop shop for telecom
companies, it also made it more challenging for the company to
accelerate its own efforts in 5G, according to one Nokia
executive.
Nokia's chairman, Risto Siilasmaa, alluded to the Alcatel issue
on Monday in an official statement announcing Mr. Suri's departure,
saying, "With the acquisition of Alcatel-Lucent behind us and the
world of 5G in front of us, I am pleased that Pekka has agreed to
join Nokia."
Nokia, which started life in 1865 as a paper mill concern, has
made dramatic changes to its business over the course of its
history. It was the world's biggest mobile-phone vendor by sales
through the early 2000s before becoming usurped by Apple Inc.'s
iPhone and other manufacturers like Samsung Electronics Co, which
were aligned with the Android operating system made by Alphabet
Inc.'s Google.
After selling its smartphone business to Microsoft Corp. in
2014, Nokia put Mr. Suri in the top job in April that year,
refocusing the company on becoming a wireless-only business. Mr.
Suri, 52 years old, was born in India and became a Singaporean
citizen. He had replaced Stephen Elop, a Canadian executive who
joined the company from Microsoft in 2010, until Nokia sold its
handset business to the Redmond, Washington-based company.
Write to Parmy Olson at parmy.olson@wsj.com
(END) Dow Jones Newswires
March 02, 2020 05:13 ET (10:13 GMT)
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