Nokia CEO thinks enterprise will be its fastest growing segment

Nokia’s Network Infrastructure unit posted strong Q3 results, with revenue growing 15% year on year – or 5% on a constant currency basis – to €2.21 billion ($2.15 billion). As the vendor looks to grow this and its other business units in the coming years, CEO Pekka Lundmark said it’s planning to broaden its customer horizons beyond service providers.

Speaking on an earnings call, Lundmark noted “One of the biggest opportunities we have in the midterm is to grow our business beyond CSPs into the Enterprise segment. We believe this will be the fastest-growing portion of our addressable market and our products are increasingly compelling.”

Indeed, enterprise sales were up 32% year on year in Q3 to €485 million, or 22% on a constant currency basis. Lundmark called out enterprise gains across its Mobile Networks and Network Infrastructure units, pointing to “great momentum” in the private wireless space and a new IP routing deal it signed in Q3 with an unnamed webscale customer. The CEO said continuing to build momentum in the enterprise space will be critical to Nokia’s ability to “deliver on our longer-term growth ambitions.”

For the time being, at least, communications service providers continued to account for the vast majority of Nokia’s sales. Of the €6.2 billion in consolidated revenue Nokia posted in Q3, CSPs delivered nearly €5.1 billion.

Zooming in on the Network Infrastructure unit, Submarine Networks posted the highest growth rate, with 17%. Meanwhile, Fixed Networks delivered 7% growth and IP Networks 3%. Optical Networks revenue was flat. Lundmark said Nokia saw strong demand in this business line, but said growth was hampered by continued supply chain issues.

While supply chain situation has improved in other areas of its business, Lundmark noted Nokia believes issues in the Optical Networking segment will persist through the first half of 2023.