Nokia names leader of networks business turnaround Rajeev Suri as CEO

Apr 29 2014, 21:55 IST
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Rajeev Suri, 46, will become the new chief executive of Finnish telecommunications gear maker Nokia from May 1. Rajeev Suri, 46, will become the new chief executive of Finnish telecommunications gear maker Nokia from May 1.
SummaryRajeev Suri, 46, is credited with turning around Nokia Solutions and Networks.

Nokia named the man who led a turnaround at its main telecoms network business Rajeev Suri as its new chief executive officer (CEO) on Tuesday, boosting investors' confidence in the future of the company following the sale of its once-dominant handset arm.

The Finnish company, which completed the 5.6 billion euro ($7.8 billion) deal to sell its mobile handset business to Microsoft on Friday, said Rajeev Suri would become CEO on May 1, replacing Microsoft-bound Stephen Elop.

It also announced forecast-beating quarterly results, driven by cost-cutting and software deals at its networks arm, formerly called NSN, and plans to return $3.1 billion to shareholders, helping to lift its share price by more than 7 percent.

"Mr. Suri has done a very commendable job in turning around NSN, in our view. Thus, we see the market being positive about his appointment," JP Morgan Cazenove analysts said.

Suri, a 46-year-old Indian national, was widely expected to lead the company after the sale of the handset business.

Nokia's networks division accounted for about 90 percent of sales from the group's continuing businesses last year. But analysts say it faces challenges, as higher research and development costs give bigger, deep-pocketed telecom equipment makers such as industry leader Ericsson and China's Huawei an advantage.

Still, Nokia beat expectations with a core operating profit margin of 9.3 percent in the first quarter, well ahead of the 5.7 percent average forecast by analysts polled by Reuters.

The margin is also expected to remain at the higher end of a 5-10 percent target for this year, the company added.

"On first-quarter results, NSN steals the show with a solid margin beat and expanded 2014 (guidance)," Jefferies analysts Lee Simpson and Robert Lamb said in a note.

Following the sale of its handset business, analysts have speculated that Nokia might seek to buy struggling rival Alcatel-Lucent, or at least its mobile products, which would boost the Finnish company's position in the United States.

Asked about potential acquisitions, Suri told Reuters in a telephone interview that small deals are possible.

"In terms of larger players, if there is something that makes sense, of course I will recommend that to the board. But ... it needs to be a wisely thought-out thing," he said.

"We will be open to the opportunities but (there's) no need to rush."

Suri said all three of Nokia's business areas - in addition to the networks unit, it has navigation and patents businesses - had opportunities for organic growth,

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