Building a global telecommunications business
A Nokia case study

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Page 2: Business focus

Nokia 4 Image 2Nokia concentrates on the key growth areas of wireline/wireless telecommunications. The Group runs global R&D programs on audiovisual signal/data processing and communications, third-generation wireless systems as well as integrated, multi-service network solutions. A pioneer in mobile telephony, Nokia is the world’s second largest manufacturer of mobile phones and a leading supplier of digital cellular networks. The Group is also a significant supplier of advanced transmission systems and access networks, multimedia equipment, satellite and cable receivers and other telecommunications related products. Nokia’s shares were first listed in Helsinki in 1915. Today, they are also traded in Stockholm, London, Paris, Frankfurt and New York.

Today, Nokia is a focused telecommunications company, but this has not always been the case. A successful company is one which can adapt to changes in its environment. The secret is to anticipate future changes and adapt appropriately in order to make the transition successfully. This process can be illustrated by highlighting some examples of company’s evolution.

1865 Nokia was established as a forest-industry enterprise.
1898 Foundation of the Finnish Rubber Works.
1912 Establishment of Finnish Cable Works.
1967 Nokia, Finnish Rubber Works and Finnish Cable Works merge to form Nokia Corporation.
1979 Nokia Mobile Phones, owned jointly by Nokia and Televa, was founded.
1982 Nokia introduced the first fully digitalised local exchange in Europe.
1991 The world’s first genuine Global System for Mobile Communications (GSM) call was made in Finland with equipment supplied by Nokia. Core skills in rubber and cable became the foundation of a cable lead telecommunications business. Once in this market, it was a natural process to become involved in building telephone exchanges and, with the global development of mobile phones, to be at the leading edge of hand-held communications.

Nokia 4 Diagram 1In the early 1990s, Nokia made a major shift in its activities by becoming a focused telecommunications company, as illustrated in the following chart. Nokia had effectively decided that the future lay in:

  • Telecommunications products ('sticking to the knitting').
  • The global rather than simply the national market (manufacturing in 11 countries to sell in 130).

In 1997, Nokia Mobile Phones accounted for 51% of Nokia’s sales and Nokia Telecommunications for 35%. Other operations, (14% of sales) included Nokia Multimedia Network Terminals and Nokia Industrial Electronics. Nokia Mobile Phones, a pioneer in the development of cellular phone products, manufactures a complete range of cellular phones for all digital and major analogue cellular phone systems. Nokia Mobile Phones are used in all 130 countries that the Group’s products are sold.

Nokia | Building a global telecommunications business