Nokia Corp. is shaking up its core telecoms-equipment unit, as it struggles with slowing demand and a raft of new competitors.
The Finnish telecommunications giant said Friday that the head of its mobile networks division is leaving the company as part of a structural and management shake-up aimed at ramping up its strategy in the face of falling sales and stiff competition.
Samih Elhage, who has been president of mobile networks since the end of 2015, will step down on April 1, remaining as an adviser until the end of May.
Nokia is one of the world’s largest sellers of telecommunications equipment, but demand for such infrastructure has slowed as phone carriers finish rolling out 4G, or the fourth-generation, wireless networks. At the same time, Nokia and longtime Swedish rival Ericsson AB face competition from relatively new Chinese heavyweights such as Huawei Technologies Co. and ZTE Corp.
While selling telecommunications equipment remains Nokia’s core business, the company has shifted focus to also build a software business that provides virtual services and helps phone carriers manage and run their networks. Nokia has also sought new revenue streams from the hardware business, licensing its brand name to a third-party mobile-phone maker and last year acquiring a company that sells digital-health devices.
Nokia’s networks sales during the final quarter of 2016 declined 14% compared with 2015, but those results were partly offset by savings and cost reductions from the Alcatel-Lucent integration, as well as strong growth in Alcatel’s submarine cable business.
In a news conference last month, Nokia Chief Executive Rajeev Suri reiterated that he believed the global networks market—the primary market in which Nokia competes—would decline to $110 billion in 2017, a decline of 2% compared with 2016, but would rise slightly to reach $120 billion in 2021.
“This year is a year of more stability, relative to last year,” Mr. Suri said in an interview last month, saying the company would focus in 2017 at growth outside its core equipment business.
The Finnish telecommunications company said Friday it will separate its mobile networks division into two organizations. One will be called mobile networks and focus on products and solutions while the other will be global services, focused on services.
In a further step, the chief innovation and operating officer role will be split, with its current operating activities moved to a newly-appointed chief operating officer, while innovation activities will be managed by Nokia’s chief technology officer, and incubation by Nokia’s chief strategy officer.
Chief innovation and operating officer Marc Rouanne becomes president of the Mobile Networks business group, while the executive vice president of Global Services, Igor Leprince, becomes president of that division.
Chief operating officer of Fixed Networks, Monika Maurer, is named group chief operating officer, and Marcus Weldon, president of Nokia Bell Labs and chief technology officer, will retain his responsibilities.
Chief strategy officer, Kathrin Buvac, takes on additional responsibilities for incubation of select new business opportunities, and Barry French, chief marketing officer, assumes additional responsibilities for health, safety, security and environment.
“These changes are designed to accelerate the execution of our strategy,” Mr. Suri said. “They will strengthen our ability to deliver strong financial performance, drive growth in services, meet changing customer demands in mobile networks, achieve our cost-saving and ongoing transformation goals, and enable strategic innovation across our networks business.”
All changes are effective from April 1, 2017, it said.