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28 November 2018

Marc Rouanne is casualty of Nokia’s latest round of restructuring

The end of an era at Nokia, as veteran executive Marc Rouanne is to leave, a casualty of the Finnish firm’s latest reorganization. This one converges the fixed and mobile network businesses in a single Access Networks division, and there will be a new president for the combined operation, whose revenues currently total €8.5bn ($9.7bn).

That person is yet to be announced, but will not be Rouanne, who might have been seen as an obvious candidate, as president of mobile networks. He is now listed as president of a French spend management company called Dhatim.  He will now be replaced in that role by Tommi Uitto, another long term Nokia employee, having been at the firm for 23 years. He has headed up mobile networks product sales since the merger with Alcatel-Lucent.

A new appointment will be made for the post of head of fixed networks, since Federico Guillén, who currently occupies that role, was named president of customer operations for Africa, Asia, Europe and the Middle East, a post he will take up from January 1.

The fixed and mobile heads will both report to the president of the combined division.

Nokia CEO Rajeev Suri said: “Nokia has a unique advantage in the 5G era with its end-to-end portfolio. By creating a single Access Networks organization that includes both fixed and mobile, we can improve our customer focus, simplify our management structure, and more efficiently leverage our full portfolio.”

The restructuring is logical, given the increased number of telcos which are looking to deploy highly converged access networks in the 5G era; the interest in fixed wireless 5G to complement wireline technologies; and the operators whose fixed line systems will also support 5G backhaul and fronthaul.

Nokia, since the acquisition of Alcatel-Lucent, has had a better opportunity than Ericsson or Samsung to bundle wireline and wireless gear to boost market share and compete on price with its rivals. Of course, outside the USA, it will have to go up against Huawei in the bundling game.

But the change may also help address Nokia’s never-ending cost reduction programs. Last month, the firm announced the latest in a series that has stretched over a decade. It will axe thousands of jobs in a bid to save €700m each year by 2020.

These latest changes follow others announced last month, when Nokia said it would move the mobile core network products into the software division, as these platforms increasingly become virtualized. CFO Kristian Pullola said that would enable the mobile division to focus mainly on radio during the critical 5G period.

Rouanne has been head of the mobile division since April 2017, when he took over from Samih Elhage in a previous round of restructuring, when Nokia split the mobile business into product and services units.