Wedoany.com Report-Nov. 21, Nokia unveiled its most extensive organizational restructuring in recent years during its Capital Markets Day event in Espoo, Finland. The initiative encompasses a refined operating framework, a fresh financial objective for 2028, revised strategic performance metrics, and modifications to the Group Leadership Team. These adjustments aim to align the company with rising needs in sophisticated connectivity, cloud services, data center expansion, and artificial intelligence applications.

Central to the transformation is a division of operations into two core segments effective January 1, 2026: Network Infrastructure and Mobile Infrastructure.

The Network Infrastructure division merges Nokia's Optical Networks, IP Networks, and Fixed Networks operations. This unit is viewed as a primary driver for expansion, capitalizing on global demands for AI infrastructure and telecommunications upgrades.

Mobile Infrastructure integrates Core Networks, Radio Networks, and Technology Standards. The consolidated structure encompasses Nokia's 3GPP mobile technology offerings, radio access solutions, and intellectual property licensing activities. This setup is intended to enhance efficiency in mobile network software, radio hardware, and standards innovation.

Leadership transitions accompany the operational shifts. Raghav Sahgal assumes the role of chief customer officer, managing client engagements throughout the restructured organization. Patrik Hammarén retains his position as president of technology standards. Tommi Uitto, a senior executive in the mobile division, will depart the leadership team by December's end.

The overhaul stems from a comprehensive evaluation of Nokia's portfolio. A new Portfolio Businesses segment now accommodates non-core activities, such as Fixed Wireless Access customer premises equipment, Site Implementation and Outside Plant operations, Enterprise Campus Edge solutions, and Microwave Radio. These generated €0.9 billion in net sales over the prior year but incurred a €0.1 billion operating loss.

Nokia established an incubation entity, Nokia Defense, to centralize research, development, and outreach for defense-related connectivity technologies. This builds on ongoing collaborations with U.S. federal entities.

Financially, Nokia introduced a 2028 target for comparable operating profit ranging from €2.7 billion to €3.2 billion, surpassing the €2.0 billion achieved in the 12 months ending Q3 2025. This metric replaces earlier aspirations, including outpacing market growth and sustaining a 13 percent operating margin.

To gauge advancement, Nokia defined key indicators: 6-8 percent compound annual growth rate in Network Infrastructure net sales from 2025-2028, 13-17 percent operating margin for Network Infrastructure, 48-50 percent gross margin for Mobile Infrastructure, and 65-75 percent free cash flow conversion. Group-wide operating expenses are slated to decrease from €350 million to €150 million by 2028.

Provisional figures under the proposed structure, covering Q4 2024 to Q3 2025, show Network Infrastructure contributing €7.8 billion in net sales and €0.8 billion in operating profit, Mobile Infrastructure delivering €11.6 billion in sales and €1.5 billion in profit, and Portfolio Businesses adding €0.9 billion in sales with a loss. Overall, the segments totaled €20.3 billion in sales and €2.0 billion in profit, factoring in the Infinera acquisition.

Nokia will adopt the new reporting format starting Q1 2026, with restated 2024 and 2025 results released early that quarter. Quarterly disclosures will detail the three segments, including sub-unit revenues within Network and Mobile Infrastructure. This streamlined approach supports Nokia's focus on AI-native networks, 6G evolution, and customer co-innovation, fostering sustainable value in a dynamic connectivity landscape.