Nokia narrows search for CEO to revive fortunes

Nokia, seeking a successor to former chief executive Stephen Elop, is focusing on insiders including Rajeev Suri as it narrows a months-long search for a manager to set a new strategy at the wireless technology company, according to people familiar with the matter.

Mr Suri, the head of Nokia's network-equipment unit, is among applicants for the job, said the people, asking not to be named because the discussions are confidential. Finance chief Timo Ihamuotila has also been considered.

The new CEO will try to revive 149-year-old Nokia, whose history includes radical leaps from one industry to another and which once again faces a fresh start without a business it used to rely on.

Mr Elop helped engineer a $7.4 billion sale of Nokia's handset unit to his former employer Microsoft and is rejoining the software maker as part of the transaction.

“Nokia selling its phone business is a historic move and crafting its future strategy and picking its next leader will be critical for its future success,” said Mika Heikkinen, who helps manage €2 billion including Nokia shares at FIM Asset Management in Helsinki. “The board has one chance to get this right.”

Nokia has also considered external candidates, the people said, adding that the company is more likely to name a new CEO after completing the phone-division sale, they said.

Microsoft and Nokia have said they expect to complete the deal this quarter, and are waiting for regulatory approval from countries including China.

As part of its new structure, Nokia will probably make the network business currently headed by 46-year-old Suri, called Nokia Solutions and Networks, central to its strategy, said Teemu Peraelae, who helps manage $24.7 billion, including Nokia stock, at Alfred Berg Asset Management in Helsinki.

Excluding the phone unit, NSN accounted for 94 per cent of Nokia's third- quarter sales. That would mean Nokia becomes mainly a manufacturer vying with Ericsson AB and Huawei Technologies in selling network gear such as base stations and antennas to carriers. Its two remaining divisions are a digital-maps business and the advanced-technologies unit that licenses Nokia patents.

An alternative option would be to keep the three divisions - NSN, maps and advanced technologies - as equal units with leaders reporting to the CEO. That would give Nokia a structure akin to a holding company and signal that it seeks to be not just a network-gear maker, but a broader software and equipment supplier taking on companies from Qualcomm to Google.

The weighting chairman Risto Siilasmaa gives NSN in the new corporate structure will help determine which candidate is best suited for the CEO job, said Richard Windsor, an independent analyst at Radio Free Mobile.

“If Rajeev gets it, it’s a signal that Nokia becomes NSN,” Mr Windsor said. “If Timo gets it, it’s a sign Nokia becomes a holding company.”

Either pick would mean Nokia returning to a policy of choosing a leader from its own ranks. During Mr Elop's three-year tenure the stock lost half its value, and the handset unit's sale shocked many in Finland, where the phones are a source of national pride. (Bloomberg)