Nokia Oyj (Nokia) provides global mobile, fixed and cloud network solutions combining hardware, software and services, as well as licensing of intellectual property, including patents, technologies and the Nokia brand.
Strategy
The company’s strategies are to grow the CSP business faster than the market, expand the share of enterprise in the company’s business, actively manage its portfolio, secure business longevity in Nokia Technologies, build new business models, and develop ESG into a comp...
Nokia Oyj (Nokia) provides global mobile, fixed and cloud network solutions combining hardware, software and services, as well as licensing of intellectual property, including patents, technologies and the Nokia brand.
Strategy
The company’s strategies are to grow the CSP business faster than the market, expand the share of enterprise in the company’s business, actively manage its portfolio, secure business longevity in Nokia Technologies, build new business models, and develop ESG into a competitive advantage.
Sale of products
Nokia manufactures and sells a range of networking equipment, covering the requirements of network operators. Revenue for these products is recognized when control of the products has transferred, the determination of which may require judgment. Typically, for standard equipment sales, control transfers upon delivery. For more complex solutions, control generally transfers upon acceptance.
In some arrangements, mainly within the Submarine Networks business, Nokia’s performance does not create an asset with an alternative use, and Nokia recognizes revenue over time using the output method, which faithfully depicts the manner in which the asset is transferred to the customer, as well as Nokia’s enforceable rights to payment for the work completed to date, including margin. The output measure selected by Nokia for each contract may vary depending on the nature of the contract.
Sale of services
Nokia provides services related to the provision of networking equipment, ranging from managing a customer’s network and product maintenance services to network installation, integration, and optimization. Revenue for each separate service performance obligation is recognized as or when the customer obtains the benefits of Nokia’s performance. Service revenue is recognized over time for managed and maintenance services, as in these cases, Nokia performs throughout a fixed contract term, and the customer simultaneously receives and consumes the benefits as Nokia performs. In some cases, Nokia performs services that are subject to customer acceptance, where revenue is recognized when customer acceptance is obtained.
Sale of intellectual property licenses
Nokia provides its customers with licenses to intellectual property (IP) owned by Nokia by granting software licenses and rights to benefit from Nokia’s IP in their products. When a software license is sold, revenue is recognized upon delivery or acceptance of the software, as Nokia has determined that each software release is distinct, and the license is granted for software as it exists when control transfers to the customer.
When Nokia grants customers a license to use IP owned by Nokia, the associated license fee revenue is recognized in accordance with the substance of the relevant agreements. In the majority of cases, Nokia retains obligations to continue to develop and make available to the customer the latest IP in the licensed assets during the contract term, and therefore, revenue is recognized pro rata over the period during which Nokia is expected to perform.
Recognition of the revenue as pro rata over the term of the license is considered the most faithful depiction of Nokia’s satisfaction of the performance obligation, as the IP being licensed to the customer includes new inventions patented by Nokia that are highly interdependent and interrelated, and created through the course of continuous research and development (R&D) efforts that are relatively stable throughout the year. In some contracts, Nokia has no remaining obligations to perform after granting a license to the initial IP, and licensing fees are non-refundable. In these cases, revenue is recognized at the beginning of the license term.
Segment
Nokia has four operating and reportable segments for financial reporting purposes: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies.
Network Infrastructure
The Network Infrastructure segment serves communications service providers, enterprises, webscales, and public sector customers. It comprises the following business units: IP Networks, which provides IP networks and services for residential, mobile, enterprise, and cloud applications; Optical Networks, which provides optical transport networks for metro, regional, and long-haul applications; and Fixed Networks, which provides fiber, fixed wireless access, and copper technologies.
Mobile Networks
The Mobile Networks segment creates products and services covering all mobile technology generations. Its portfolio includes products for radio access networks (RAN) and microwave radio (MWR) links for transport networks, and solutions for network management, as well as network planning, optimization, network deployment, and technical support services.
Cloud and Network Services
The Cloud and Network Services segment provides open, fully automated, and scalable software and solutions that accelerate the journey of service providers and enterprises to autonomous networks and new value creation.
The Cloud and Network Services segment invests in technologies that are critical to its customers’ growth: 5G core, secure autonomous networks, private wireless, industrial edge, and network APIs. Delivered in a secure, Software-as-a-Service first model, these solutions help customers capture the opportunities of digitalization, AI, and cloud.
Nokia Technologies
The Nokia Technologies segment monetizes Nokia’s intellectual property, including patents, technologies, and the Nokia brand, building on Nokia’s continued innovation leadership, long-term investment into research and development, and decades of driving technology standards development. The majority of net sales and related costs and expenses attributable to licensing and patenting the patent portfolio of Nokia are recorded in Nokia Technologies, while each segment separately records its own research and development expenses.
Group Common and Other
Despite not being a reportable segment, Nokia also provides segment-level information for Group Common and Other. Group Common and Other includes Radio Frequency Systems, which had been managed as a separate entity. In addition, Group Common and Other includes certain corporate-level and centrally managed operating expenses, as well as fair value gains and losses on investments in venture funds, including investments managed by NGP Capital.
Units
The company’s business units are: Fixed Networks, IP Networks, and Optical Networks.
Fixed Networks is a leading provider of access infrastructure, in-home Wi-Fi solutions, cloud solutions, and virtualization, with the global number one position in XGS PON (fast becoming the dominant global volume technology) for the fifth consecutive year. In 2024, it extended its technology leadership in broadband, including by working with nbn on the world’s first demonstration of 10G, 25G, 50G, and 100G speeds over a live fiber broadband network; supporting HKBN in its launch of Asia’s first 25G PON broadband service; and – with Google Fiber – making the first US trial of 50G PON speeds over a live fiber broadband network. With AT&T, it is accelerating future-ready fiber broadband growth. The company is proud of its efforts to connect the underserved: in South Africa, it will expand broadband access with Fibertime. In 2024, it introduced Lightspan MF-8 – a high-capacity fiber platform supporting 10/25/50G and future 100G PON services – and extensions to its popular Corteca portfolio to help customers monetize their network investments. With 400+ fiber customers in 130 countries, the company is well placed to enable continued broadband rollout and to support coming upgrade waves.
IP Networks delivers IP routing and data center networking solutions to customers in the enterprise, webscale, cloud, and service provider segments. It led the market in 2024 for the fourth year in a row in IP edge routing, and in the third quarter of 2024 achieved the number one position in total routing in North America for the first time. Some of the company’s customers include NL-ix, for which it is creating high-performance 800 Gigabit Ethernet routing; Globe Telecom, for which it is modernizing the BNG network; and e& UAE, which selected Nokia’s cloud interconnect solution to provide connectivity services to hyperscalers. The company’s focus on data centers is already beginning to bear fruit. In November, Nokia announced a multi-year supply arrangement with Microsoft Azure for data center switching. In September, CoreWeave announced it will deploy Nokia IP and optical platforms to interconnect data centers across the US and Europe in support of high-performance AI workloads, and in the same month, it introduced its Event-Driven Automation platform – the industry’s most modern data center infrastructure automation platform, built for the AI era.
Optical Networks has established itself among the industry leaders in optical transport networks for long-haul, regional, and metro applications, holding the number one position in India and number two position in Europe and MEA. The company’s latest photonic service engine – PSE-6s – continues to set new speed, capacity, and distance records, and in 2024, it expanded its portfolio with optical network solutions, enabling network operators to scale capacity with lower power per bit, and to provide higher capacity service speeds to the metro edge. The company’s service provider customers include Türk Telekom, with which it broke the 800Gbps transmission world record on a long-haul commercial network, and Colt Technology Services, for which it collaborated with Windstream Wholesale and the company’s colleagues in IP Networks to complete the world’s first ultra-fast 800GbE optical and IP service trial, connecting London and Chicago. It is also working with SURF (an organization for IT collaboration in education and research) to prepare for a massive upgrade to CERN’s Large Hadron Collider.
Competition
The company’s competitors include Huawei and ZTE, along with Calix and Adtran (Fixed Networks), Cisco, Arista, and Juniper (IP Networks), and Ciena (Optical Networks).
Mobile Networks
Mobile Networks creates products and services covering all 3GPP mobile technology generations. Its portfolio includes products for radio access networks (RAN) and microwave radio links for transport networks, solutions for network management, as well as network planning, optimization, network deployment, and technical support services. Customers include Communication Service Providers (CSP), industrial enterprises, governments, and the defense sector.
In 2024, Mobile Networks expanded its AirScale portfolio with new market-leading energy-efficient Habrok Massive MIMO radios to support mobile traffic growth and accelerate mass 5G rollouts. It also introduced compact Tuuli outdoor baseband solutions, supporting double the cell capacity while reducing energy consumption by 40%. The company’s products are ready for the evolution to 5G-Advanced and beyond. The company’s portfolio also serves the growing demand from enterprises, public safety, and defense.
The company’s innovative all-in-one 5G small cell solution, Kolibri, complements CSP macro coverage and fulfills enterprise requirements for cost efficiency and scalability. It also expanded its Wavence microwave transport portfolio with new products for both rural and dense urban deployments.
The company introduced a new ‘extreme deep sleep’ power-saving mode for AirScale radios, which helps its customers reduce energy consumption and costs. It also launched Virtual Power Plant, a unique near-real-time control solution that enables CSPs to monetize base station backup batteries in energy markets, including the frequency regulation market.
The company completed pilots of its commercial Cloud RAN solution, verifying its feature parity, performance consistency, and interoperability with purpose-built RAN based on its anyRAN approach. Alongside cloudification, AI will be the next transformational step for RAN evolution. Nokia is a founding member of the AI-RAN Alliance and collaborates with leading companies, such as Nvidia, T-Mobile, and SoftBank to steer this transformation and develop AI-RAN to leverage platform synergies.
Nokia has AI capabilities in its market-leading MantaRay portfolio for intelligent network management and autonomous optimization. Examples of AI in the company’s services include predictive hardware analytics with up to 90% fault prediction accuracy, Nokia AI Digital Assistant, the industry’s first conversational AI chatbot, and the Hazard Detection Lens, an AR application for enhancing safety at deployment sites.
Competition
The company’s main competitors are Huawei, Ericsson, Samsung, and ZTE, but there are also a number of smaller competitors competing in specific technology or regional sub-segments, such as NEC, Fujitsu, Mavenir, Rakuten Symphony, and JMA Wireless. In microwave, the company’s key competitors include Ceragon, Aviat, and ZTE alongside Huawei and Ericsson.
Cloud and Network Services
Cloud and Network Services provides open, secure, automated, and scalable software and solutions that accelerate the journey of service providers and enterprises to autonomous networks and new value creation. Cloud and Network Services invests in technologies that are critical to its customers’ growth: 5G core, secure autonomous networks, private wireless, industrial edge, and network APIs.
In 2024, Cloud and Network Services continued to invest in the strategic growth areas of 5G Core, Private Wireless, Digital Operations, AI and Analytics, Security, and Monetization to drive the digital ecosystem that is essential to 5G value creation. The company is focused on differentiators that have the potential to bring new capabilities to its CSP and enterprise customers, including:
Network Monetization Platform: The company’s Network as Code platform enables application developers and CSPs to accelerate the work of producing software applications for new enterprise, industrial, and consumer use cases, and monetizing 5G and 4G network assets beyond basic connectivity.
Autonomous Networks: The company’s Autonomous Networks Fabric and Application Suite reduce the cost and complexity of managing the network, enable faster rollout of new apps and use cases, and provide a foundation for API programmability and monetization.
Private Wireless: Nokia continues to be considered the leading vendor of private wireless networks to enterprises. The company’s Private Wireless Campus Edge solution remains unique in the market with its extended portfolio, enabling enterprises to advance beyond connectivity into mission-critical edge cloud, AI, and Industry 4.0 digital transformation.
Software-as-a-Service (SaaS): Cloud and Network Services is investing to make the company’s go-forward products SaaS native. Nokia continues to increase the percentage of recurring revenue through new business models in Enterprise Campus Edge and SaaS.
Nokia Technologies
Nokia Technologies is responsible for managing Nokia’s patent portfolio and monetizing Nokia’s intellectual property, including patents and technologies. Nokia signed around 40 new patent license agreements and completed its smartphone license renewal cycle.
Nokia Technologies has three business areas: Patent Licensing of Nokia’s patent portfolio; Technology Licensing of Nokia’s technologies for integration into consumer devices; and brand partnerships for licensing the Nokia brand.
The company’s long-term strategy is built on Nokia’s technology leadership. Given the enabling nature of Nokia inventions in wireless communications and in multimedia, its patent portfolio remains highly relevant across multiple sectors and value chains. The emergence of new form factors and new value chains continues to open new licensing opportunities for the company.
Nokia manages the Nokia patent portfolio, working with other Nokia business groups, and continues to grow its patent licensing and monetization activities, which drive most of Nokia Technologies’ net sales. The core of its business is the mobile devices licensing program, where it has agreements with most major smartphone vendors. It also has patent licensing programs for automotive, consumer electronics, IoT devices and solutions, video services, and gaming.
In June 2024, Nokia made the world’s first immersive voice and audio call over a cellular network using the new 3GPP Immersive Voice and Audio Services (IVAS) codec, which allows consumers to hear 3D spatial sound in real time. Nokia is a leading contributor to IVAS, which is part of the upcoming 5G Advanced standard.
In 2024, it filed patent applications on a record number of more than 3,000 new inventions.
Customers
Nokia serves three customer segments: communications service providers, enterprises, and licensees.
Networks play an increasingly important role in the economy and in society. As a result, Nokia serves a growing number of customers who provide critical services to end-users. It distinguishes two primary customer segments that it serves with its hardware, software, and services portfolio: communications services providers and enterprises, including enterprise verticals and webscalers. In addition, it licenses its intellectual property to industries that benefit from its fundamental innovations, primarily in the mobile devices, automotive, consumer electronics, and IoT industries.
Patents
Nokia owns one of the broadest and strongest patent portfolios in the telecommunications sector, with a leading share of cellular Standard Essential Patents (SEPs), including over 7,000 patent families declared as essential to 5G. The company’s portfolio also covers significant multimedia assets, particularly in video compression technology.
Research and Development
The company’s research and development expenses in 2024 were EUR 4,512 million.
History
Nokia Oyj was founded in 1865. The company was incorporated in 1896.
