Nokia has announced the planned leadership and organizational structure that it intends to implement after and subject to the successful closing of the public exchange offer for Alcatel-Lucent securities announced on April 15, 2015.
With this transaction, Nokia expects to create an innovation leader in next generation technology and services for an IP connected world, and to position the combined company to create the foundation of seamless connectivity for people and things wherever they are.
“We are making very good progress on being ready to operate as a combined company when the proposed exchange offer closes,” said Rajeev Suri, President and Chief Executive Officer of Nokia. “After a thorough selection process, I am pleased to announce the company’s future organizational structure and exceptional leaders who will help chart the next steps in Nokia’s transformation.”
After the closing of the exchange offer, the Networks business would be conducted through four business groups: Mobile Networks, Fixed Networks, Applications & Analytics and IP/Optical Networks. These business groups would provide an end-to-end portfolio of products, software and services to enable the combined company to deliver the next generation of leading networks solutions and services to customers.
Alongside these, Nokia Technologies would continue to operate as a separate business group. Each business group would have strategic, operational and financial responsibility for its portfolio and would be fully accountable for meeting its targets.
The four Networks business groups would have a common Integration and Transformation Office to drive synergies and to lead integration activities. The business group leaders would report directly to Nokia’s President and Chief Executive Officer:
•Mobile Networks (MN) would include Nokia’s and Alcatel-Lucent’s comprehensive Radio portfolios and most of their converged Core network portfolios including IMS/VoLTE and Subscriber Data Management, as well as the associated mobile networks-related Global Services business.
This unit would also include Alcatel-Lucent’s Microwave business and all of the combined company’s end-to-end Managed Services business. Through the combination of these assets, Mobile Networks would provide leading end-to-end mobile networks solutions for existing and new platforms, as well as a full suite of professional services and product-attached services.
The designated President of Mobile Networks would be Samih Elhage, who currently serves as Executive Vice President and Chief Financial and Operating Officer, Nokia Networks.
•Fixed Networks (FN) would comprise the current Alcatel-Lucent Fixed Networks business, whose cutting-edge innovation and market position would be further supported through strong collaboration with the other business groups.
This business group would provide copper and fiber access products and services to offer customers ultra-broadband end-to-end solutions to transform their networks, deploying fiber to the most economical point. The designated President of Fixed Networks would be Federico Guillén, who currently serves as President of Fixed Networks, Alcatel-Lucent.
•Applications & Analytics (A&A) would combine the Software and Data Analytics-related operations of both companies. This comprehensive applications portfolio would include Customer Experience Management, OSS as distinct from network management such as service fulfilment and assurance, Policy and Charging, services, Cloud Stacks, management and orchestration, communication and collaboration, Security Solutions, network intelligence and analytics, device management and Internet of Things connectivity management platforms.
CloudBand would also be housed in this business group, which would drive innovation to meet the needs of a convergent, Cloud-centric future. The designated President of Applications & Analytics would be Bhaskar Gorti, who currently serves as President of IP Platforms, Alcatel-Lucent.
•IP/Optical Networks (ION) would combine the current Alcatel-Lucent IP Routing, Optical Transport and IP video businesses, as well as the software defined networking (SDN) start-up, Nuage, plus Nokia’s IP partner and Packet Core portfolio.
IP/Optical Networks would continue to drive Alcatel-Lucent’s technology leadership, building large scale IP/Optical infrastructures for both service providers and, increasingly, web-scale and tech-centric enterprise customers. The designated President of IP/Optical Networks would be Basil Alwan, who currently serves as President of IP Routing and Transport, Alcatel-Lucent.
•Nokia Technologies (TECH) would remain as a separate entity with a clear focus on licensing and the incubation of new technologies. Nokia Technologies would continue to have its own innovation, product development and go-to-market operations. Ramzi Haidamus would continue in his current role as President of Nokia Technologies.
Nokia expects to align its financial reporting under two key areas: Nokia Technologies and the Networks business. The Networks business would comprise the business groups of Mobile Networks, Fixed Networks, Applications & Analytics and IP/Optical Networks.
Nokia also expects to provide selective financial data separately for each of the four Networks business groups to ensure transparency for investors over the performance of each of them. Nokia expects to announce further details of the new financial reporting structure after the closing of the exchange offer.
“Our goal is to position each business group for clear leadership in its particular market and to create a combined portfolio that provides the scope and scale our customers expect, underpinned by a strong focus on innovation, quality and superb execution,” explained Suri. “We aim for all our business groups to be innovation leaders, drawing on the combined company’s unparalleled R&D capabilities to deliver leading products and services for our customers, and ultimately ensure the company’s long-term value creation.”
The combined company is expected to have a common sales organization across the business groups, except for Nokia Technologies. In addition, effective after the closing of the exchange offer, there would be six additional unit leaders within the combined company, who would report directly to the President and CEO.