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Nokia Appoints Intel’s Justin Hotard as New CEO, Replacing Pekka Lundmark

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Finnish telecommunications company Nokia (NOKIA.HE) announced on Monday that its current CEO, Pekka Lundmark, will step down, with Justin Hotard appointed as his successor. Hotard, who is currently the executive vice president and general manager of the Data Center & AI Group at Intel (INTC.O), will officially take on the role of Nokia’s CEO on April 1.

Telecom equipment manufacturers, including Nokia, have faced declining sales of 5G equipment and are looking to diversify into growing sectors like artificial intelligence (AI). Hotard’s extensive experience in AI and data centers makes him well-suited to lead Nokia’s next phase of growth. Nokia’s Chair Sari Baldauf praised Hotard’s track record of accelerating growth in tech companies and highlighted his expertise as key to Nokia’s future.

The announcement took the market by surprise, with JPMorgan analysts noting that Lundmark had been successful in stabilizing the company. However, they also recognized that the appointment of a new CEO indicated a shift in Nokia’s strategic direction, particularly with a focus on AI and data centers.

Analysts at Inderes echoed this view, noting the leadership change aligns with Nokia’s growing emphasis on its Network Infrastructure unit, which includes investments in AI and data centers. Last year, Nokia moved to acquire U.S. optical networking firm Infinera (INFN.O) in a $2.3 billion deal, aiming to capitalize on the expanding AI-driven data center market.

Lundmark, who has been CEO since 2020, will remain as an advisor to Hotard until the end of the year. The leadership transition had been in planning for some time, according to Nokia, after Lundmark expressed interest in moving on when the company’s repositioning efforts were more advanced.

Shares of Nokia rose 1.6% following the announcement, reflecting optimism about Hotard’s appointment. Despite a 27.85% increase in stock price over the past year, Nokia’s shares are still down more than 90% from their peak in June 2000.

Nokia and AT&T Sign Multi-Year Expansion Deal for Voice and 5G Automation

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Nokia and AT&T have signed a multi-year expansion agreement aimed at enhancing AT&T’s voice services and automating its 5G network in the U.S. This deal, announced on Tuesday, marks a significant step for Nokia, which follows a setback in 2023 when AT&T selected Swedish rival Ericsson for a major telecoms contract. Despite losing out on that $14 billion contract, which will cover 70% of AT&T’s wireless traffic by 2026, Nokia secured a smaller deal in September to build a fiber network in the U.S. and now has locked in this second agreement for cloud-based voice core applications and network automation.

Raghav Sahgal, president of Nokia’s Cloud and Network Services division, emphasized the importance of the deal, highlighting it as a reinforcement of the longstanding partnership between the two companies. The upgraded core network will integrate new voice services, leveraging AI and machine learning to offer enhanced functionality.

The specific value of the deal was not disclosed, but the partnership is seen as key for Nokia, as it continues to strengthen its foothold in the North American telecoms market. The collaboration with AT&T will focus on optimizing network operations and enabling new services that meet the evolving needs of customers.

Nokia recently reported stronger-than-expected financial results for Q4, driven by growing demand for telecom equipment in North America and India, and it is optimistic about prospects for 2025. In an effort to tap into the AI boom, Nokia also acquired Infinera in a $2.3 billion deal last year, aiming to capitalize on investments in data centers, including the significant Stargate project.

 

EU Files Complaint Against China Over High-Tech Patent Royalties at WTO

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The European Commission has filed a formal complaint with the World Trade Organization (WTO) against China, accusing the country of “unfair and illegal” practices regarding the setting of global royalty rates for European Union (EU) standard essential patents (SEPs). This dispute centers on the pressure placed on European tech companies, particularly those in the telecom sector, to lower their patent rates globally without their consent.

Key Points of the Complaint:

  • China’s Role: The European Commission claims that China’s courts have been empowered to set royalty rates for SEPs, a move that allegedly forces European companies to lower their rates, thus providing Chinese manufacturers with unfair access to European technology at lower costs.
  • SEPs and Impact on Tech: SEPs are patents that protect technologies essential for manufacturing products that meet specific standards, such as 5G technologies in mobile phones. Major European companies like Nokia and Ericsson are holders of these patents.
  • Chinese Response: China’s commerce ministry expressed regret over the EU’s decision to take the matter to the WTO, affirming that it would address the issue in accordance with WTO rules while safeguarding its rights and interests.
  • Previous Related Dispute: The case is connected to another ongoing WTO dispute filed by the EU in 2022, regarding Chinese anti-suit injunctions that hinder the ability of telecom patent holders to enforce their intellectual property rights in courts outside of China.

Steps Forward:

  • Consultations: The European Commission has requested consultations with China as the first step in WTO dispute resolution. If an agreement is not reached within 60 days, the EU may request the establishment of an adjudicating panel, which typically takes around 12 months to resolve.