About Nokia Oyj

Nokia Oyj (Nokia) is a global provider of mobile, fixed and cloud network solutions combining hardware, software and services, as well as licensing of intellectual property, including patents, technologies and the Nokia brand. Nokia manufactures and sells a range of networking equipment, covering the requirements of network operators. Nokia provides services related to the provision of networking equipment, ranging from managing a customer’s network and product maintenance services to network installation, integration and optimization. Nokia provides its customers with licenses to intellectual property (IP) owned by Nokia by granting software licenses and rights to benefit from Nokia’s IP in their products. When Nokia grants customers a license to use IP owned by Nokia, the associated license fee revenue is recognized in accordance with the substance of the relevant agreements. In the majority of cases, Nokia retains obligations to continue to develop and make available to the customer the latest IP in the licensed assets during the contract term, and therefore revenue is recognized pro rata over the period during which Nokia is expected to perform. Segments The company operates through four segments: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies. Network Infrastructure Network Infrastructure provides fiber, fixed wireless access technologies, copper, IP routing, data center, subsea and terrestrial optical networks – along with related services – to customers including communications service providers, webscales (including hyperscalers), digital industries and governments. Network Infrastructure builds business-critical and mission-critical networks for a wide range of CSP, enterprise, and webscale customers; delivering fixed access, intellectual property (IP) routing, data center networks, and optical transport for both terrestrial and subsea applications. The company’s business divisions are: Fixed Networks, IP Networks, Optical Networks and Submarine Networks. Fixed Networks offers fiber and copper-based access infrastructure, Wi-Fi in-home solutions, the cloud and virtualization. In 2022, the company continued to advance its leading position in passive optical networks (PON) (2). The company was first-to-market with a 25G PON solution and have shown up to 100G PON proofs of concept with customers in Europe and the U.S.A. The company continues to innovate around solutions that will allow its customers to lead, while protecting their investments for the future. The company’s Lightspan MF-14 product, launched in Q4, is the world’s first generation 6 broadband platform, enabling the convergence of all services on a single fiber infrastructure. This solution has already been selected by customers building 25G capable networks in Europe, North America and Asia Pacific. The company has reinforced its market leadership (3) in 5G Fixed Wireless Access with the world’s first large-scale, long-reach 5G mmWave deployment for Australia’s National Broadcaster nbn. IP Networks is a global leader in IP access, aggregation, and edge and core routing for residential, business, mobile, cloud and digital industry applications. The company’s ability to offer high-performance and massively scalable networks is enabled though its industry-leading, in-house designed FP5 routing silicon and FP5-based routing platforms. Combined with the company’s network automation and security platforms, it further enables customers to efficiently control, manage, analyze and secure their IP networks. The company is actively driving the next generation in IP routing – 800 Gigabit Ethernet – which it has trialed with customers including BT, DE-CIX and LINX. The company’s software-defined WAN solutions bring easy, efficient network connectivity configuration among clouds and to any enterprise branch. The company’s next-generation data center fabric makes cloud environments easier to scale, adapt and operate. Optical Networks is a leader in optical transport networks for metro, regional, long-haul and ultra-long-haul applications. The company’s approach helps communications service providers (CSP) address the massive growth in bandwidth demand, while simplifying network operations through software tools and automation. This enables a more streamlined service delivery and a lower total cost of ownership. The portfolio includes coherent optical transponders, optical transport network switching, wavelength-division multiplexing, reconfigurable optical add-drop multiplexer solutions and optical line systems. The company’s successful rollout of its fifth generation of coherent optical technology, based on its in-house designed PSE-V digital signal processor, highlights its focus on and commitment to technology innovation. Submarine Networks continues to be a leader in the growing undersea telecoms networks segment and saw continued growth in demand in 2022, led by hyperscalers and driven by factors ranging from increased cloud computing to virtual reality, as well as by the need to bring the advantages of connectivity to previously underserved parts of the world. The company’s technology innovation and customer focus helped take Submarine Networks above EUR 1 billion in sales this year, a first for this business division. Competition The company’s competitors include Huawei and ZTE, along with Calix and Adtran (Fixed Networks), Cisco and Juniper (IP Networks), Ciena and Infinera (Optical Networks), and Subcom and NEC (Submarine Networks). Mobile Networks Mobile Networks creates products and services covering all network generations. Its portfolio includes products for radio access networks (RAN) and microwave radio links for transport networks, solutions for network management as well as network planning, optimization, network deployment and technical support services. In 2022, the company reached a cumulative number of 266 commercial 5G deals in the form of supply agreements, 83 of which were live 5G networks by the end of the year. Nokia has also grown its private wireless business, which has expanded to include over 560 customers, 100 of which are 5G customers. Nokia announced new, important 5G deals in the CSP market this year – including those with Bharti Airtel and Reliance Jio in India, AT&T in Mexico, Ice in Norway, and Indosat Ooredoo Hutchison and XL Axiata in Indonesia. The company also announced long-term expansion deals with existing 5G customers, including Chunghwa Telecom and Taiwan Mobile in Taiwan, and Orange and T-Mobile in Poland. In 2022, Mobile Networks continued its investment in research and development to further strengthen its 5G portfolio’s competitiveness and bring the best-performing networks to its customers. The company also completed its target of converting close to 100% of its 5G deliveries to ReefShark System-on-Chip (SoC) technology in 2022, while keeping a few selected products FPGA-based when doing so best suited the needs of the customer. In 2022, the company demonstrated first-to-market 5G features including: Three and four component carrier aggregation (3CC CA and 4CC CA), which allows for increased data speeds and extended coverage, and announced related technology agreements with A1 Austria, BT in the U.K., China Mobile, du in the UAE, Optus in Australia, Telefónica Germany, T-Mobile in the US and stc in Saudi-Arabia. Nokia also announced a RAN slicing deal with Proximus in Belgium and demonstrated a new dynamic network slicing solution with Google, as well as the world’s first commercial 5G SA network with network slicing for Fixed Wireless Access with Telia in Finland. The company also achieved an uplink speed record with Elisa and Qualcomm in Finland, leveraging millimeter wave spectrum with carrier aggregation, and the deployment of the world’s first 5G Edge Slicing solution on a live commercial network with Cellcom in Israel and Telia in Finland. In 2022, the company has also continued to invest in its Open RAN capabilities, with the majority of Nokia’s SoCs and new hardware and software platforms now being O-RAN ready. This gives the comopany the opportunity to support customers that are interested in O-RAN. Nokia also expanded its partner base for Cloud RAN solutions and added IBM, Dell and HPE to its list of partners, which also includes Amazon Web Services (AWS), Google Cloud and Microsoft Azure. The company also announced a 3GPP non-terrestrial (NTN) RAN deal with AST SpaceMobile that will enable them to offer direct-to-cell phone connectivity from space – a move which marks its entry and leadership into the emerging non-terrestrial networks (NTN) market segment. During 2022, several new products were added to the Nokia Wavence MWR portfolio. This includes a new dual-band, high-capacity outdoor transceiver. This will help to fulfil the needs of the rapidly growing rural broadband market. Nokia also trialed a live MWR backhaul connection utilizing D-Band spectrum. This will serve as an ultra-high-capacity extension for both 5G backhaul and fronthaul in dense urban environments. In services, the company continued investing in digitalization and AI/ML-based capabilities to enable faster rollouts and the speedy resolution of network faults, while maximizing network performance. With its digital services portfolio, the company is helping its customers accelerate their entire network lifecycle, from network design and optimization to deployment and technical support services. The company is upgrading approximately two million nodes for its customers per year, while designing and optimizing more than 380 000 radio sites. In addition, over 400 customers are using the company’s AI-driven Nokia Digital Assistant to help them solve network issues faster. Nokia’s technology is designed to be energy efficient and contribute towards mobile operators’ climate and environmental targets. In 2022, Nokia announced the commercial availability of its liquid cooled AirScale Baseband portfolio, which enables a reduction in cooling system energy consumption of up to 90%. The company also introduced the Intelligent RAN Operations solution for heightened 5G network management, which reduces base station energy consumption by up to 15%. Competition The company’s main competitors are Huawei, Ericsson, Samsung and ZTE, but there are also a number of smaller competitors competing in specific technology or regional sub-segments, such as NEC and Fujitsu. Smaller suppliers in the RAN market include, for example, Mavenir, Rakuten Symphony, Parallel Wireless and JMA Wireless. In MWR, the company’s key competitors include Ceragon, NEC and Aviat, alongside Huawei and Ericsson. Cloud and Network Services Cloud and Network Services enables CSPs and enterprises to deploy and monetize 5G, cloud-native software and as-a-Service delivery models. With its combined cloud, software, and services capabilities, Cloud and Network Services (CNS) serves communication service providers (CSPs), enterprises, hyperscale customers, digital developers, and partners, and is helping them navigate three major industry transitions: the introduction and monetization of 5G networks, the cloudification of communications platforms and software, and the transition to as-a-Service models. These transitions are shaping the emerging digital ecosystem. CNS is composed of four business units: Business Applications, Cloud and Cognitive Services, Core Networks, and Enterprise Solutions. The company’s emerging Software-as-a-Service (SaaS) delivery model underpins each business unit to help customers transition to greater network flexibility and achieve faster time to value. In October 2022, the company announced its Network Monetization Platform, which aims to accelerate the monetization of its open products in Business Applications, Core, and MX Industrial Edge. CNS delivers cloud-native solutions that provide network quality of service and agility; and enable customers to leverage intelligence that facilitates network efficiency, self-protection and self-healing, and energy management. The company deploys industrial solutions that drive digital transformation and Industry 4.0, and help CSPs automate network operations and manage security. The company has rebalanced its investment to accelerate and scale its portfolio growth areas of 5G core software, analytics and AI Services, digital operations, monetization, private wireless and industrial automation, and security. The company has attained marketplace leadership in private wireless networking with more than 560 customers, of which 118 included 5G 6 Software-as-a-Service offerings announced, including AVA Charging, AVA for Energy, and Core SaaS. Nokia Technologies Nokia Technologies is responsible for managing Nokia’s patent portfolio and monetizing Nokia’s intellectual property, including patents, technologies and the Nokia brand. Nokia Technologies has three business areas: Patent Licensing of Nokia’s patent portfolio, Technology Licensing of Nokia’s technologies for integration into consumer devices, and Brand Partnerships for licensing the Nokia brand. Patent Licensing: The company manages the Nokia patent portfolio, working with other Nokia business groups, and continue to grow its patent licensing and monetization activities, which drive most of Nokia Technologies’ net sales. The core of the company’s business is the mobile devices licensing program, where it has agreements with most major smartphone vendors. The company also has patent licensing programs for consumer electronics, video services, automotive and the wider IoT domain. Technology Licensing: The company licenses its OZO Audio and OZO Playback multimedia technologies to smartphone and camera manufacturers, and drive advanced audio and video research and standardization, along with product incubation for new immersive voice and video solutions. Brand Partnerships: The company licenses the Nokia brand - a global brand that is recognized by almost everyone - to HMD Global, the company behind Nokia-branded phones and tablets, and other brand partners. The company owns a leading share of Standard Essential Patents (SEPs) in every generation of cellular standards, with over 4 500 patent families declared as essential to 5G standards. The company’s portfolio also covers significant multimedia assets, particularly in video compression technology, which allows large files to be shared across the internet. The work of Nokia’s inventors in video research and standardization has been recognized with numerous prestigious awards, including five Technology & Engineering Emmy Awards. The company’s portfolio has a long lifetime, with the vast majority of patents still in force in ten years’ time. The company continues to refresh its portfolio with new inventions every year. In 2022, the company filed patent applications on more than 1 700 new inventions, enabling 5G networks, connected 5G devices and more. As it continues to invest heavily in R&D and standardization, the annual number of filings is expected to grow. Customers The company serves three customer segments: communications service providers, enterprises and licensees. Networks play an increasingly important role in the economy and in society. As a result, the comopany serves a growing number of customers who provide critical services to end-users. Communications services providers and enterprises, therein enterprise verticals and webscalers. In addition, the company licenses its intellectual property to selected industries that benefit from its innovations, primarily in the mobile devices, automotive, consumer electronics and IoT industries. Strategy To reinforce its position as a leader and enabler of digitalization, the company is confidently asserting the value it brings: Networking Expertise: The company knows that accelerating the digital transformation of every industry will be critical to unlocking massive gains in sustainability, productivity, and accessibility – its networking expertise is increasingly valuable to customers and partners as they seek to maximize their growth. Technology Leadership: The company is specialist in the technology it delivers – with a laser-focus on delivering a best of breed technology portfolio. Pioneering Innovation: Innovation runs through the company’s business – across its evolving portfolio, in the disruptive research and game-changing programs at Nokia Bell Labs, in its work to build the device and application ecosystems needed for digitalization, and through its innovation programs where it brings emerging technology to life alongside its partners. Collaborative Advantage: Collaboration is in the company’s DNA, and it is valued for the trusted relationships it builds with its customers. The company’s strategy consists of six pillars – key objectives that will define its success – and four enablers to help it get there. The key elements of the company’s strategy are to grow CSP business faster than market; expand the share of enterprise in its business; actively manage its portfolio; secure business longevity in Nokia Technologies; build new business models; develop ESG into a competitive advantage; invest in long-term research; digitalize its own operations; and refresh its brand. Patents and Licenses The company owns a leading share of Standard Essential Patents (SEPs) in every generation of cellular standards, with over 4 500 patent families declared as essential to 5G standards. The company’s portfolio also covers significant multimedia assets, particularly in video compression technology, which allows large files to be shared across the internet. The work of Nokia’s inventors in video research and standardization has been recognized with numerous prestigious awards, including five Technology & Engineering Emmy Awards. Nokia was one of the first companies in the world to achieve the globally recognized ISO 9001 certification for the company’s high-quality patent portfolio management processes. In 2022, the company filed patent applications on more than 1 700 new inventions, enabling 5G networks, connected 5G devices and more. Research and Development (R&D) The company’s research and development expenses in 2022 were EUR 4 550 million. Regulation The company complies with the Finnish Corporate Governance Code issued by the Securities Market Association. In addition, the company complies with the rules and recommendations of Nasdaq Helsinki and Euronext Paris as applicable to it due to the listing of its shares on the exchanges. Furthermore, as a result of the listing of the company’s American Depositary Shares on the New York Stock Exchange (NYSE) and its registration under the U.S. Securities Exchange Act of 1934, the company follows the applicable U.S. federal securities laws and regulations, including the Sarbanes-Oxley Act of 2002, as well as the rules of the NYSE, in particular the corporate governance standards under Section 303A of the NYSE Listed Company Manual. History Nokia Oyj was founded in 1865. The company was incorporated in 1896.