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Nokia's promising new strategy

Tuesday, April 29, 2014 - 02:16

April 29 - Nokia announces plans to return more than $3 billion to shareholders. Hayley Platt asks if the new handset-free business will flourish at a time when other Scandanavian companies are also muscling in to the market.

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Ditching its once dominant handset business to concentrate on growing its networks seems to be paying off for Nokia. Profits at its core networks unit, which last year accounted for 90 percent of sales, rose by 10 percent, beating expections. Former head of the division, Rajeev Suri has been largely credited with the success. And he's now been confirmed as the Finnish telecoms equipment maker's next CEO - taking over on May 1. The group says after years of cost cutting and ridding itself of unprofitable contracts, it's ready to grow again. Laying out plans for what it called a new world of technology. Michael Hewson, CMC Markets. SOUNDBITE: Michael Hewson, CMC Markets, saying (English): "I think if the new CEO can set out a vision for the company going forward in that particular market place. It's nearest competitors are Alcatel Lucent, Huawei and Ericsson. I think there are certainly prospects that the company can go forward from here." It could also have some competition from close neighbours. Swedish-Finnish telecoms firm TeliaSonera is joining forces with Norwegian-based Telenor. They're merging networks across all technologies to become a greater force. And they see machine-to-machine technology as a growth area. Hans Dahlberg is CEO of TeliaSonera. SOUNDBITE: Hans Dahlberg, CEO, TeliaSonera, saying (English): "I should say that when it comes to cars, healthcare applications or when you want to have control of your kids, you want to have the best possible network. So that's why coverage is very important." Machines such as a fridge or washing machine can wirelessly connect to the internet, making it possible to send messages to your phone. Student Annabell Bennekow says anything that makes life easier can't be bad. SOUNDBITE: Annabeel Bennekow, student, saying (English): "It would definitely be easier if my domestic appliances could tell me when I needed milk or the laundry was ready." Nokia hasn't said exactly what it's planning for the future. But it hasn't ruled out small acquisitions. And it will return $3 billion to shareholders through dividends and share buybacks. That - combined with its new strategy - sent shares up more than 7 percent.