The President and CEO of Nokia, Rajeev Suri, is stepping down on August 31st after more than a decade leading the Finnish telecommunications giant. Suri is set to be replaced by Pekka Lundmark, CEO of energy company Fortum, and the news comes in the light of growing doubt surrounding Nokia’s 5G strategy.
And whilst Suri will leave his current position on August 31st 2020, he will continue to serve as an adviser to the Nokia board until January 1st 2021.
Tough 5G competition
Suri has struggled to find Nokia a 5G foothold throughout his time with the company, and Nokia has faced tough 5G competition, falling behind its rivals Ericsson and Huawei.
In order to challenge the competition, Nokia was forced to buy more expensive components for its network. These additional expenses resulted in the company suspending its dividend, and cutting its earnings predictions in October. This significantly irked investors, with Nokia shares dropping 23 cents in just a single day. And over the past 12 months, the company has lost a third of its market value.
Lundmark has “consistently delivered robust total shareholder returns, successfully renewed the company’s strategy, and positioned it to be a strong player in the transforming global energy sector”, Nokia said.
“He has a record of leadership and shareholder value creation at large business-to-business companies; deep experience in telecommunications networks, industrial digitisation, and key markets such as the United States and China; and a focus on strategic clarity, operational excellence and strong financial performance,” Risto Siilasmaa, Nokia’s board chairman, said in the statement.
It appears that Lundmark could be exactly what Nokia needs to refresh its 5G strategy and make it a success. The new CEO also has a strong track record of carrying out large deals, which Nokia needs to bag to make it a 5G threat. Hopefully, Lundmark can push the company forward, and rectify the falling share price by winning back investor confidence.