Nokia sijoituskohteena (Osa 3)

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According to Nokia’s financial statement, the value added in 2024 was 10,545 million euros. The generated value was distributed such that for every euro received by a worker, capital received 39 cents. Each Nokia employee generated an average value added of 131,220 euros.

In 2023, the corresponding figures were 9,977, 1.37, and 115,090. The year 2022 yielded figures of 11,114, 1.44, and 127,900.

These figures are influenced by the number of employees, which was 80,361 (2024), 86,689 (2023), and 86,896 (2022).

In terms of productivity, Nokia has recently pulled ahead of Ericsson. Notably, staff reductions have positively impacted productivity.

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Well, here’s one project where Nokia supplies radio functions to low-Earth orbit satellites.

https://www.nokia.com/about-us/news/releases/2022/07/28/nokia-radio-technology-to-enable-ast-spacemobiles-direct-to-cell-phone-connectivity-from-space/

Eutelsat, on the other hand, is a French competitor to Space-X. I don’t know if they do everything themselves and what kind of data link they offer.

Space-X is a pioneer in its field, but apparently there are capacity issues when many users are online.

I would say that mobile 3G/4G base stations are a practical solution for the needs of the defense forces. There are also eavesdropping protection mechanisms for these. Development progresses. The old defense forces’ communication gear was from Nokia, nowadays from Bittium and who knows where else. That military sector is quite fragmented.

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@AquaVitux good addition. I completely forgot about it myself. So Nokia also has a hand in this technology.

Isn’t Nokia also involved in those mobile base stations together with Lockheed Martin? Or how does a hybrid base station differ?

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Nokia on USA:n armeijan kanssa ollut yhteistyössä.

Pentagon Looks to Commercial Sector to Support Electronic Warfare in Space

2/7/2025
By Laura Heckmann

https://www.nationaldefensemagazine.org/articles/2025/2/7/pentagon-looks-to-commercial-sector-to-support-electronic-warfare-in-space

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Things are getting tight…

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A Few Notes on Nokia’s Annual Report

Shareholders at the End of 2024

The proportion of shareholders registered in Finland was approximately 26% on December 31, 2024, and the proportion of nominee-registered shareholders was approximately 74% of the total number of shares. One could assume that the proportion of Finnish shareholders will decrease this year with the new shareholders coming from Infineran.

Employees

The average number of employees in 2024 for continuing operations only (excluding the sold Alcatel Submarine Networks) was 78,400 (-8,300), and regionally:

Europe 33,200 (-4,100)
India 17,800 (-400)
North America 9,300 (-1,100)
Greater China 8,700 (-1,700)
Asia and Pacific 3,800 (-500)
Middle East and Africa 2,900 (-200)
Latin America 2,700 (-200)

Nokia’s target for 2026 is 72,000 - 77,000 employees, which is defined as follows: “These figures represent originally planned personnel targets and do not take into account currently planned divestments or acquisitions.” Of course, in 2025, the figures will change, especially in North America, due to the acquisition of Infineran, which employs over 3,000 people worldwide, most of whom are presumably in the United States.

R&D

2024 expense in euros (% of revenue) / 2023 expense in euros (% of revenue) / change

NI: 1,207 M (18.5%) / 1,212 M (17.5%) / 0%
MN: 2,154 M (27.9%) / 2,010 M (20.5%) / +7%
CNS: 556 M (18.4%) / 577 M (17.9%) / -4%
TECH: 250 M (13.0%) / 224 M (20.6%) / +12%

It is noteworthy how high MN’s R&D expenses are, both absolutely and relative to sales (27.9%). The high proportion is, of course, partly explained by the 21% decrease in MN’s sales in 2024, but it is strange that MN actually increased its R&D activities by 7%. At the same time, NI, which is assumed to be a significant growth engine for Nokia, has significantly lower product development, and the level was kept unchanged compared to the previous year.

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Business Strategy and Organization
At the core of the Mobile Networks business group’s strategy are investments to secure technology leadership. Our goal is to provide our customers with the market’s highest-performing networks and their commercialization opportunities, supported by the transition to open cloud-native networks and 6G. We have prioritized and increased investments in research and development while redesigning our operations to achieve a sustainable cost structure. We have also revamped our go-to-market model with the aim of fostering closer connections with our customers. At the same time, we support our strategy to expand our customer base from communication service providers to the enterprise sector and defense industry.

Quote from Nokia’s annual report. These “investments” have been discussed before. Technology leadership.

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While it may be wise to keep MN as part of Nokia to enable synergies and a more complete offering, does it make sense that MN had 78% higher R&D than NI in 2024, especially knowing that Dell’Oro predicts the RAN market will stagnate over the next five years, while all three of NI’s businesses have growing markets? Or is it that MN simply requires this much larger investment and additional investment in NI would be futile?

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Even if the global RAN market were to stagnate, excluding China, there is still some growth available. On top of that, there’s market share to be gained in markets other than China.
Add to that the Enterprise + defense sector, and also consider the reasonable leverage available if margins can be improved slightly for these revenue figures.

There is also room for maneuver left, and MN’s investments do not negate the necessary investments on the Infra side.
It’s harder to gauge Huawei’s RAN investments, but it seems that even Ericsson (Erkki) is spending money on RAN development.

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Is product development cheaper at NI then, and does a larger investment than the current one not benefit? In other words, it’s puzzling that NI, with its strong profitability and moderate growth, is so far behind in investments, even though the sales difference last year was much smaller: MN 7725 million and NI 6518 million. Of course, NI’s investment is likely to grow significantly this year in Optical Networks with Infinera. On the other hand, Nokia has also announced an increase in IP network investments by 100 million per year, part of which goes to product development and part to sales promotion.

That’s right, and Nokia did not want to comment further on what proportion goes to R&D activities and what to other areas.

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I would like to believe that they make quite reasonable calculations regarding the profitability of investments.
TAM vs. investment sizes, etc.
I don’t have much understanding of the absolute R&D costs per segment and how they are distributed overall.

A large part of that 100 million additional investment seemed to go into productization and sales channels.
So the technology, so to speak, was already found in-house.

So there might also be differences in how long-term the R&D costs are in these.
On the other hand, are there more SEP patents on the RAN side?
In that case, some of the R&D costs flow into Tech’s revenues.

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Press release.

Nokia and Hetzner enhance hosting infrastructure for scalable, automated, and sustainable services across Europe

Yhteenveto by tekoäly.

Nokia päivittää Hetznerin datakeskus- ja ydinverkkoinfrastruktuurin skaalautuvammaksi, automaattisemmaksi ja energiatehokkaammaksi. Käyttöönotto on valmis Saksassa ja Suomessa, ja laajenee Eurooppaan. Nokian 7750 SR-1x -reitittimet ja kehittynyt telemetria tukevat 400G- ja 800G-yhteyksiä, varmistaen pitkän aikavälin kasvun.

Kumppanuus vahvistaa Nokian asemaa luotettavana datakeskusverkkoratkaisujen toimittajana Euroopassa.

https://www.globenewswire.com/news-release/2025/03/17/3043423/0/en/Nokia-and-Hetzner-enhance-hosting-infrastructure-for-scalable-automated-and-sustainable-services-across-Europe.html

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6G is already starting to press on. If one wants to be a leader, a lot of work needs to be done in advance. Fixed networks don’t develop as rapidly, and the mobile network as a whole is much more complex. Nokia’s salaries, compared to the IT sector, at least in Finland, are rather weak :slight_smile: A scalable tech giant will never emerge from mobile networks.

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Nokia strengthens Worldstream’s hosting security with advanced DDoS Protection in the Netherlands

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It would be nice to see some valid statistics about those salaries. I’ve been under the impression that Nokia’s salary level, and especially the extra compensation, have in turn been quite good compared to Ericsson. But I’m not in the industry, so it would be nice to hear some more specific information from someone.

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Perhaps compared to Ericsson, but not compared to the IT sector. However, Nokia has to compete for the same talent as the rest of the industry. Understandably, salaries cannot be drastically increased when profitability in the mobile network sector is what it is.

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