INTERNATIONAL – Telecom network equipment maker Nokia kicked off a new cost-cutting programme on Thursday and repeated an ambitious profit forecast, saying operators’ demand for next-generation 5G networks would pick up pace in the remainder of the year.
The networks industry – dominated by Nokia, Sweden’s Ericsson and China’s Huawei – has been battered by years of slowing demand for existing 4G networks and mounting investor doubts over whether 5G contracts can begin to boost profitability this year.
The Finnish firm, which also reported a drop in quarterly profit, said it was targeting annual cost savings of €700 million (R11 billion) by the end of 2020, without elaborating on the scale of expected job reductions.
It is yet to complete its previous €1.2bn cost cuts, launched after its 2016 acquisition of Franco-American Alcatel-Lucent.
“We are making progress but still have more work to do get our network margins where we would like them to be,” chief executive Rajeev Suri told a conference call.