Nokia CEO Pekka Lundmark hailed 2021 as a “stellar year” for the company’s Network Infrastructure division, citing double digit year-on-year growth across two of its four segments and market share gains for the Fixed Networks business.
In addition to Fixed Networks, Nokia’s Network Infrastructure division is comprised of its Optical Networks, IP Networks and Submarine Networks businesses. In Q4 2021, Network Infrastructure revenue increased 10% to nearly €2.3 billion (approximately $2.6 billion), accounting for more than a third of the €6.4 billion ($7.3 billion) in consolidated revenue Nokia reported in the quarter.
Full year consolidated revenue rose 3% to €22.2 billion ($25.3 billion) in 2021, with Network Infrastructure revenue up about 14% to nearly €7.7 billion ($8.8 billion). Quarterly profit of €680 million ($776.6 million) was up from a loss of €2.7 billion ($3.1 billion), with full year profit of €1.6 billion ($1.8 billion) up from a loss of €2.5 billion ($2.9 billion).
While Nokia didn’t provide breakout figures for segment revenue within the Network Infrastructure division, CEO Pekka Lundmark said on an earnings call the Fixed Networks unit posted 35% growth for the full year. He added the Submarine Networks segment also delivered strong performance, with 33% growth. IP and Optical Networks grew 5% and 2%, respectively.
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He touted market share gains in service provider routing and fiber optical line terminals (OLTs), noting it now has a “very high market share” of 41% in the latter. That figure is up from around 37% toward the end of 2017.
Lundmark pointed to OLTs as “the most important focus segment for us in Fixed Networks” and said it sees plenty of runway left there.
“When you look at the market development forecasts for this business going forward, it's actually pretty promising when you look at what the market research agencies are expecting about the continuous fiber rollout,” he stated. “There are still several countries, for example, in Europe, large countries where the fiber penetration or actually homes passed by fiber has not even reached 50% yet.”
For 2022, Nokia forecast revenue of between €22.6 billion and €23.8 billion ($25.8-$27.2 billion). Lundmark said on the call supply chain issues which weighed on its 2021 results have stabilized but “it continues tight. There are still going to be, at least in the first half of this year, situations where people live more or less hand to mouth.”
“We have managed this very challenging situation very well without any major casualties or any major customer losses, but situation continues and calls for continuous day-to-day management,” he concluded.