Nokia President and CEO Rajeev Suri shared a bright future for telecom network vendor Nokia Networks that will be targeting its net sales to grow in 2015.
Unlike Ericsson, its main rival, Nokia is not considering any cost cutting or job elimination this time. Nokia Networks has already undertaken a massive job cut – slashing around 17,000 jobs – in the last two years.
Ericsson on Thursday announced major cost cutting initiatives including job reductions and new strategies to slash cost by $1.2 billion.
ALSO READ: Ericsson plans job cut and new strategies to save $1.2 billion
Nokia Networks vs Ericsson
Nokia with its three businesses – Nokia Networks, Technologies and HERE — will be betting on the growing connected world for future. On the other hand, Ericsson will focus on becoming a leading ICT player in the connected society concept.
Nokia said its vision is to expand the human possibilities of the connected world. Each of Nokia’s three businesses is well-placed to contribute to reaching this vision.
“The rapidly evolving world of technology provides the context for Nokia’s vision and strategy: now it’s about connecting things as well as people, and we expect to see more than 50 billion connected things – devices, modules and sensors – by 2025,” said Nokia President and CEO Rajeev Suri.
Earlier, Ericsson said it will focus on excelling in core business including radio, core and transmission, and telecom services. It wants to lead in targeted areas such as Cloud, IP networks, TV and media, OSS and BSS, as well as in Industry & Society, addressing new customer segments outside of the telecom operator domain.
Considering the long term strategies of Nokia and Ericsson, Ericsson is well ahead in the execution of the futuristic connected society business to become a leading ICT player. On the other hand, Nokia Networks will play a significant role in the connected society segment.
Both Ericsson and Nokia Networks want to grow faster than the growth of the global telecom market. While Nokia Networks said it will grow its revenue in 2015, Ericsson gave a long term growth plan for 2013-17.
Ericsson said it is targeting to grow faster than the projected total addressable market CAGR of 3-5 percent 2013-2017. Ericsson’s growth will be supported by a CAGR of approximately 10 percent in 2013-2017 in the targeted areas.
Nokia did not share specific revenue growth targets. Nokia said Nokia Networks’ net sales will grow slightly faster than the market over the long-term.
Nokia Networks growth targets
Nokia expects Nokia Networks’ non-IFRS operating margin in 2015 to be in-line with Nokia Networks’ new long-term non-IFRS operating margin range of 8 percent to 11 percent.
Nokia expects Nokia Group capital expenditures to be approximately EUR 200 million in 2015, primarily attributable to capital expenditures by Nokia Networks.
Nokia plans
The strategy of Nokia Networks is to build on its current momentum while transforming to serve the operator of the future. Nokia Networks will target to grow slightly faster than the market over the long-term by creating high quality products and services.
Nokia now targets Nokia Networks’ long-term non-IFRS operating margin range to be 8 percent to 11 percent. This compares to Nokia’s previous target for Nokia Networks’ long-term non-IFRS operating margin range to be 5 percent to 10 percent.
Nokia said its operational approach will help it execute its strategies. There will be a clear focus on operational excellence with the Nokia Business System (NBS), which provides a shared set of operating practices to create value across the three businesses.
NBS has three elements including investment optimization, performance management and talent management. Nokia also continues to target further improvement in its operations going forward, with a clear focus on efficiencies through automation and disciplined processes.
Baburajan K
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