Nokia’s single largest investor has said it had high expectations of new direction following the Finnish telecoms gear maker had failed to meet its potential under previous direction.
“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, Chief Executive Officer of Solidium, the Finnish government’s investment company, told journalists at our partner news agency 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 intended. Beneath Suri, Nokia last year slashed its profit outlook and halted dividend payouts, following product missteps which hurt its 5G ambitions and knocked over a fifth off its market value.
“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 at Sari Baldauf, one of the very high-profile female executives in the global telecoms business. She took over from Risto Siilasmaa who chaired the Finnish company for eight decades.
Solidium, that became an investor in Nokia at 2018 after purchasing 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 companies have also profited from US 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 extended time and 5G emerged more quickly than executives and businesses anticipated, 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.