Nokia Unveils New Strategy to Lead AI-Driven Network Transformation

Nokia  held its Capital Markets Day 2025 to unveil a new strategy aimed at positioning the company as a global leader in AI-driven network transformation and to capture value from the emerging AI supercycle. The company also announced updated long-term financial targets, strategic KPIs, an evolution of its operating model, and changes to its Group Leadership Team. Central to the new strategy is a simplified operational model with two primary segments: Network Infrastructure and Mobile Infrastructure. Nokia targets growing its annual comparable operating profit to a range of EUR 2.7–3.2 billion by 2028.

“Nokia changed the world once by connecting people — and will again by connecting intelligence. As the trusted western provider of secure and advanced connectivity, our technology is powering the AI supercycle. From fixed to mobile infrastructure, we are developing technology that accelerates value for our customers. I am proud of the work Team Nokia is doing to focus and lead this critical era in connectivity.”

– Justin Hotard, President and CEO, Nokia

The company outlined five strategic priorities to guide its growth: accelerating AI and cloud adoption, leading the next era of mobile connectivity with AI-native networks and 6G, co-innovating with customers and partners, focusing capital where Nokia can differentiate, and unlocking sustainable returns. These priorities aim to simplify operations, strengthen focus, and maximize value creation.

Effective 1 January 2026, Nokia will reorganize its business into two primary operating segments. The Network Infrastructure segment, led by David Heard, will include Optical Networks, IP Networks, and Fixed Networks, targeting the rapid global build-out of AI and data center networks. The Mobile Infrastructure segment, led on an interim basis by Justin Hotard, will combine Core Software, Radio Networks, and Technology Standards, focusing on AI-native networks, 6G, and mobile technology leadership.

As part of the reorganization, several business units, including Fixed Wireless Access CPE, Site Implementation and Outside Plant, Enterprise Campus Edge, and Microwave Radio, will move to a new Portfolio Businesses segment while Nokia evaluates their long-term strategic direction. Additionally, Nokia is launching a dedicated Defense unit as an incubation hub to develop defense-grade solutions in key markets, building on the foundation of Nokia Federal Solutions.

Leadership changes include Raghav Sahgal becoming Chief Customer Officer and Patrik Hammarén continuing as President, Technology Standards. Tommi Uitto will step down from the Group Leadership Team at the end of 2025.

Nokia also announced new financial targets and KPIs. The company aims for net sales growth of 6–8% CAGR in Network Infrastructure from 2025–2028, a Network Infrastructure operating margin of 13–17%, Mobile Infrastructure gross margin of 48–50%, and free cash flow conversion of 65–75%. Under the new segment structure, Nokia will begin reporting quarterly from Q1 2026, with recast financials for 2024 and 2025 to be published in early 2026.

Provisional financial information for the new structure shows Network Infrastructure generating EUR 7.8 billion in net sales and EUR 0.8 billion in operating profit, Mobile Infrastructure EUR 11.6 billion in net sales and EUR 1.5 billion in operating profit, and Portfolio Businesses EUR 0.9 billion in net sales with a EUR 0.1 billion operating loss. These figures include proforma adjustments for the Infinera acquisition.

The new strategy, segment structure, and leadership changes are designed to strengthen Nokia’s focus on innovation, customer service, and value creation, positioning the company to lead in the evolving AI-driven connectivity landscape.