Nokia appoints Fortum CEO Lundmark to replace Suri from September

  • Reuters
    Published: 2020-03-02 17:39:58 BdST

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Nokia's new President and CEO Pekka Lundmark shakes hands with resigning President and CEO Rajeev Suri (R) after a news conference at the Nokia headquarters in Espoo, Finland March 2, 2020. REUTERS

Nokia Chief Executive Rajeev Suri will step down in September and be replaced by Pekka Lundmark, who used to work for the Finnish company and is the current CEO of energy group Fortum, Nokia said on Monday.

Suri has been in the role for six years and was previously head of Nokia Siemens Networks.

The Finnish company has been struggling to regain investors’ confidence after it issued a surprise profit warning in October that slashed off a third of its value and forced it to admit to some delays in its 5G development.

Nokia faces intense competition from Sweden’s Ericsson and China’s Huawei [HWT.UL] in the race to deliver 5G telecoms networks to operators around the world.

While Huawei has suffered from US authorities’ decision last May to blacklist the company on security grounds, Nokia has struggled to capitalize on those restrictions.

Lundmark, CEO at Fortum since 2015, held executive positions at Nokia between 1990 and 2000, including vice president of strategy and business development at Nokia Networks. By 1998 Nokia had grown into the world’s largest mobile phone manufacturer, a position it maintained for more than a decade.

His appointment will reunite him at the top of the company with another key executive from that period, Sari Baldauf, who headed Nokia’s networks unit - now the group’s main business - between 1998 and 2005.

Nokia said in December Baldauf would replace its chairman Risto Siilasmaa.

The group’s shares were up 3% in early trade, taking its dive over the past 12 months to 33%.

“The fact that he headed strategy at Nokia Networks means he has an understanding of the telecom equipment market, albeit from a long time ago,” analysts at JP Morgan said in a note.

“That along with his CEO responsibilities at a couple of companies gives him the appropriate background to be CEO of Nokia. We also understand that Rajeev will stay for transition until September which is a positive,” they said.

Siilasmaa told a news conference on Monday Nokia has no plans to assess strategic options for the company.