Here is an AI-generated summary of the discussion between Justin Hotard and François-Xavier Bouvignies of UBS on December 3, 2025, at UBS’s 2025 Global Technology and AI Conference. I read through the entire transcript and thus verified that the content is current.
💻 Summary of Nokia CEO’s Interview
The discussion covered Nokia’s strategy, focusing particularly on Network Infrastructure (NI) and Mobile Networks, as well as the company’s adaptation to market changes driven by Artificial Intelligence (AI).
🌐 Network Infrastructure (NI) and Artificial Intelligence (AI)
Hotard emphasized that most of the growth opportunities related to NI are seen in the current portfolio, especially in IP routing and optical networking. With the Infinera acquisition, the goal is to shift the focus from operators (telcos) towards companies providing AI and cloud services.
Targeted growth: The guidance for the NI business is 6–8% growth (CAGR), while the growth guidance for the IP and optical business is 10–12%.
Growth constraints: According to Hotard, the moderate guidance is due to three factors:
Fixed networks: Increased discipline in the offering of fiber network customer premises equipment (CPE) creates headwinds.
Customer structure: Nokia’s customer base is still more heavily weighted towards operators than cloud service providers, even though the AI and optical segment is growing faster.
Technology position: The company was late in 800G technology and is a small player in IP routing. It takes time to get into customers’ design cycles.
Competitive advantage in optics: Nokia sees a competitive advantage particularly in optics due to vertically integrated manufacturing, building everything from indium phosphide to line systems and software.
Capital allocation: Investments are strongly directed towards AI and cloud solutions driven by hyperscalers, but at the same time, relationships with operators are maintained, as they remain important, especially regarding sovereign cloud solutions.
Order backlog: The order backlog is strong, consisting of multiple customers, and the duration of orders has lengthened, reflecting the industry’s need for supply chain predictability. Hotard emphasized the importance of order and revenue growth over customer announcements.
Profitability in optics: The keys to improving profitability in optics are seen as achieving cost targets, pricing discipline, and scale advantage with the Infinera acquisition.
📡 Mobile Networks
Mobile networks are seen as critical infrastructure enabling the reliable and continuous connectivity required by future physical AI, robotics, autonomous vehicles, and digital twins.
Future vision: Hotard believes that the future of the business is software-driven, and radio hardware will increasingly become a commodity over time.
Goal and profitability: The business aims to achieve stable or increasing operating profit by 2028. The gross margin is expected to be 48–50%. The goal is to transform the business model from a hardware-centric model generating insufficient returns to a software-focused model.
NVIDIA partnership: The collaboration with NVIDIA is strategic and is expected to yield the first Proof-of-Concept (POC) solutions in 2026, commercial deployments in 2027, and volume in 2028. Hotard believes that Nokia can create significant value through the software stack, even if NVIDIA captures a large portion of the chip value.
Market share and margin discipline: Nokia is committed to being disciplined regarding results and revenue, meaning it is willing to let market share slip in price competition to protect margins. In swap-out projects (such as Huawei replacements), market share is not pursued unless they include a technological leap or a value-creating solution for the operator.
💼 General Management and Strategy
First significant change: Hotard mentioned that his first significant action as CEO was appointing David Heard to lead the NI business due to the energy and commercial discipline he brought.
Misconceptions about Nokia: Hotard believes that the most common misconception is recalling Nokia’s phone business. The most underestimated aspect is how critical an infrastructure provider Nokia is, for example, with its 70% share in the broadband market and its innovations in cloud services.
to the moon 