Nordic winter hits hard as Ericsson loses exec and Nokia cuts more jobs

Swedish Ericsson and Finnish Nokia both announced they’re losing people as the endless winter nights take their toll.

Ericsson’s SVP, Chief Marketing and Communications Officer and Head of Marketing and Corporate Relations, Helena Norrman, is calling it a day after 21 years at the company, with ten of those on the executive team. She’ll be hanging around for a quarter or two, to keep the transition smooth and presumably have a hand in finding her replacement.

“Helena has been instrumental in reshaping and modernizing Ericsson’s global marketing and communications strategy and function,” said Ericsson CEO Börje Ekholm. “With a deep understanding of the company’s priorities she has helped Ericsson navigate through periods of both massive change and considerable challenges. Helena has been a valued member of the Executive Team and I wish her all the best in her future ventures.”

On a personal note, I got a chance to hang out with Helena when I was over in Stockholm last summer and found her to be smart and tough, but at the same time friendly and approachable, in other words great at her job. I’m sad to see you go Helena, but wish you all the best with your next thing. Here were are getting the beers in, on a boat in Stockholm, with Helena on the right.

Ericsson tour boat beers

Over in Helsinki Nokia is trimming another 350 Finnish employees in a further dive to cut costs, as previously reported by Light Reading. “Our industry is one where a constant focus on costs is vital and the planned transformation measures are essential to secure Nokia´s long-term competitiveness,” said Tommi Uitto, Nokia’s Country Manager in Finland. “Such decisions are not easy, but we will do our utmost to support our personnel during the change process.”

“Nokia has made good progress in executing on its strategy, with momentum in providing high-performance end-to-end networks, targeting new enterprise segments and creating a standalone software business. Our early progress in 5G is strong and we continue to increase our investment in this critical technology.

“We will redouble our efforts to ensure that Nokia’s disciplined operating model remains a source of competitive advantage for us, and that we maintain our position as the industry leader in cost management, productivity and efficiency. Finland will continue to be an important country for Nokia to achieve these goals. To this end, we are also currently recruiting into key new technologies in all our campuses in Finland.”

On one hand any job loss announcement sends out the message that the company is struggling to make a profit. But as Uitto noted, this sort of thing is not uncommon among kit vendors and Ericsson has been on a massive downsizing of its own, so these 350 redundancies need to be kept in perspective. Meanwhile Norrman’s departure is a loss to Ericsson, but maybe it will take this opportunity to get someone in from the outside with a different perspective on the company.

Xiaomi unveils new strategy stressing AI, IoT and smartphones

The Chinese device maker Xiaomi has announced its new strategy will be built around two core areas: smartphone and AI+IoT.

At the company’s annual party, Lei Jun, Xiaomi’s founder and CEO, pledged an investment of CNY 10 billion ($1.5 billion) over the next five years, in a strategy it calls AIoT (meaning both “AI+IoT” and “All in IoT”). The objective is to develop this part of the business into a second core of the company’s strategy, to dovetail with its current core business: smartphones.

Xiaomi is no stranger to artificial intelligence. AI has been in the centre of Xiaomi’s marketing messages for its photo technologies on the new smartphones and the smart speakers. Nor has it been a novice in IoT. In fact, Xiaomi claims to be the world’s largest IoT company, “connecting more than 132 million smart devices (excluding mobile phones and laptops), including more than 20 million daily active devices as of September 30 (2018).” This mainly comes in its smart home category including products ranging from smart suitcases to smart scooters and everything in between.

Smartphone, on the other hand, has always been the linchpin in Xiaomi’s ecosystem. After its fast growth in China and the rapid market share gain in emerging markets like India, Xiaomi recently expanded into Europe, including choosing to debut its latest flagship smartphone in London. Additionally, Xiaomi sees in Latin America new growth opportunites. It is also one of the smartphone OEMs to endorse Qualcomm’s 5G chipset. However, as Lei recognised, “Before the proliferation of 5G technology, Xiaomi’s success in smartphone business segment lies in striving to consolidate its leading position in the smartphone markets across the world.”

As a means to continue strengthening its smartphone positions, Xiaomi also announced a dual-brand strategy. Its flagship and other high-end products will continue to come under the “Mi” brand, while the mid-range value-for-money products will carry the “Redmi” brand. Here Xiaomi may have taken a page from Huawei’s brand strategy, which has used “Honor” to address the mid-range segment while its flagship products have been branded “Huawei” and come in Mate or Pro series.

Ursula Burns officially made Veon CEO, at last

Eight months after losing its last CEO, telecoms group Veon has decided to stick with Chairman Ursula Burns in the dual role.

When Jean-Yves Charlier suddenly had his security pass revoked back in March, there was a curious silence on the matter of his replacement. That silence continued for so long that, distracted by the passing of the seasons, everyone forgot Veon didn’t officially have a CEO.

Today, what vestigial speculation there may have been was finally put to rest when Veon anointed Ursula Burns as CEO. To call this a bolt from the blue would be an exaggeration as Burns was already Chairman and had been covering the CEO role since Charlier cleared off. But sometimes these things need to be rubber-stamped.

“I am honoured to be appointed Chairman and CEO of Veon,” said Burns. “The company operates in a diverse group of markets, with growing populations and rapidly increasing smartphone ownership. This clearly presents a host of growth opportunities for Veon as we seek to build on the positive momentum that we are seeing across the business. I look forward to continuing to lead Veon towards more success and increased shareholder value.”

“The Board has been impressed with Ursula’s performance and leadership of the company,” said Veon board Director Julian Horn-Smith. “The management team are clearly working well together and focused on delivering against strategic priorities. Ursula has led Veon through a major transaction in the sale of its Italy joint venture for $2.9 billion and overseen a period of solid quarterly operational performance. We are confident that with her as Chairman and CEO there will be further improvements across the business.”

There you have it. To be fair, actually getting someone to do the job for eight months is a fairly rigorous interview process, so Horn-Smith and his fellow board member can feel pretty confident of having made as informed a decision as possible.

Nokia loses its mobile network head Marc Rouanne

Finnish kit vendor Nokia has had an executive reshuffle that resulted in yet another head of its mobile networks business group calling it a day.

Marc Rouanne is a Nokia lifer who inherited the mobile crown when Samih Elhage cleared off following the last episode of corporate musical chairs at Nokia, which saw his group diminished by the separation of its services arm into its own little silo. The move is effective immediately and Nokia has wasted little time erasing him from history, which does make you wonder how amicable this latest split was.

History seems to be repeating itself as Rouanne’s departure coincides with his group being absorbed into a larger silo called the Access Networks Division, together with the fixed network group. Nokia has yet to name the head of this new super-division, which is surprising. Maybe Rouanne was lined up for the gig but then bailed at the last minute for some reason, resulting in the embarrassment of announcing a major new corporate initiative without anyone at the top of it.

Nokia has at least managed to replace Rouanne at mobile networks, with lifer Tommi Uitto stepping up from his role as head of product sales to head up the whole group. He will report into whoever they eventually find for the access networks gig.

“Nokia has a unique advantage in the 5G era with its end-to-end portfolio,” said Nokia CEO Rajeev Suri. “By creating a single Access Networks organization that includes both fixed and mobile, we can improve our customer focus, simplify our management structure, and more efficiently leverage our full portfolio.

“Tommi is a strong leader with the right background in both sales and product development and I am pleased that he has accepted this role. He brings deep credibility from across the telecommunications industry and a proven ability to drive product leadership and business performance. I want to thank Marc for his contributions to Nokia and wish him well in the future.”

Creating an overall hardware product division makes sense, given the whole point of the Alcatel-Lucent acquisition. It’s such an obvious move, in fact, that it begs the question of why it didn’t happen sooner. This will hopefully be the last corporate reshuffle required to fully incorporate A-Lu as Nokia’s going to have to start tapping the mail room for its mobile heads if this trend persists.

TIM announces Elliot-proposed board member Gubitosi as new CEO

As anticipated by Telecoms.com last week, Telecom Italia (TIM) has appointed current board member Luigi Gubitosi as its new CEO.

Gubitosi has been given the gig less than a week after the former CEO Amos Genish was unceremoniously shown the door, having been reassured his job was safe. His replacement is a member of the TIM board nominated by Elliott, the activist investor group that wrested control of the TIM boardroom from Vivendi. Genish was a Vivendi appointee and remains on the board.

This is just the latest chapter in the battle for control of TIM with a view to extracting value from it. Last year we asked how Vivendi, with less than a quarter of TIM shares, could apparently dictate the direction of the company. Elliot clearly felt the same and successfully challenged Vivendi. But now, with less than a tenth of TIM stock, it’s trying the same move.

You don’t have to be the biggest cynic in the world to figure both parties are in it for themselves. The biggest apparent difference between their competing visions is a matter of short-termism. The rhetoric coming from the Vivendi camp is that it’s interested in the long-term health of the company, while Elliot is effectively engaged in asset-stripping in order to give it a more immediate return and exit on its investment.

The main manifestation of this is the plan to spin off TIMs network holdings into a separate company, imaginatively called Netco, that would still be wholly-owned by TIM. This feels like a cosmetic change but it would apparently free up some value, for some reason, perhaps by saddling it with loads of debt. The longer-term danger is that this would be a precursor to disposing of those assets entirely in the long term.

Genish is not a fan of this approach, and recently offered the following statement: “Any decision to break up the company, including losing control of the fixed network, must go back to the shareholders for a vote.” He will apparently seek shareholder support for an extraordinary shareholder meeting to address this, which shouldn’t be a problem if Vivendi is still backing him, but it’s not yet clear whether this will amount to an attempt to regain control of the board.

Elliot affiliation aside, Gubitosi looks pretty well qualified for the gig. He did a couple of decades at Fiat before joining MNO Wind, where he was CEO between 2007-2011. He moved on to be General Manager of state broadcaster RAI and, like any self-respecting member of the elite, is on a bunch of boards, committees and that sort of thing. His rich history of working with the Italian state might come in handy in the network spinoff process.

It’s very unlikely that Vivendi and other shareholders will take this further power grab by Elliott lying down, so this story is likely to keep giving for a while yet. Both parties will spout rhetoric about how invested they are in the future prosperity of TIM, but they only differ in their value-extraction strategies. In the meantime TIM remains hamstrung at a time when new entrant Iliad Italy is taking massive chunks of mobile subscriber share. It’s hard to see how that’s going to benefit anyone with a stake in TIM.

The two favourites for TIM CEO job revealed – source

A source close to Vivendi has revealed the names of the two people they think are most likely to get the TIM CEO job vacated this week by Amos Genish.

They are Alfredo Altavilla and Luigi Gubitosi, both current TIM board members, who were proposed by activist investor group Elliott when it purged the board after winning its struggle with Vivendi in May of this year. If Altavilla got the gig he would have the added benefit of being the Chairman of the TIM Nomination and Remuneration Committee, which sets executive pay.

The same source, who spoke to us on condition of anonymity, also advised that Genish was about to get on the plane to Korea to sign a new 5G deal with Samsung last Sunday (11/11) when he read rumours of his demise. Apparently he got in touch with TIM Chairman Fulvio Conti, also proposed by Elliott, who gave him written confirmation that they were greatly exaggerated and that no board meeting had been scheduled. On the back on this Genish got on the plane, only to be told just two days later that the meeting had taken place and that he was history.

“It is ironic that the people who worked together to oust Amos Genish are now fighting for his job and the company is in more disarray than ever,” said the source. They also advised that Genish feel betrayed by the people who conspired to get rid of him, although he plans to fight on as a board member.

If our admittedly pro-Vivendi source is correct and Elliott is successful in installing once of its people as CEO then it will have run out of scapegoats. TIM will have an Elliot board and an Elliott CEO, so the buck stops there regarding its business performance. How Vivendi reacts to such an outcome will be critical and it could push for another AGM and board vote.

We have contacted TIM for comment and are awaiting response.

Telecom Italia kicks out CEO Amos Genish

In one of the least surprising board room purges ever, Telecom Italia (or TIM for short) has got rid of its CEO Amos Genish.

“TIM’s Board of Directors met today and deliberated by a majority vote to revoke with immediate effect all powers conferred to Director Amos Genish, giving mandate to the Chairman to resolve further obligations in relation to the existing working relationship with Genish,” said a TIM announcement today.

“In accordance with the succession plan for Executive Directors adopted by TIM, the proxies revoked to Director Amos Genish were provisionally assigned to the Chairman of the Board. The Chairman of the Nomination and Remuneration Committee has called for a meeting of the latter, in compliance with its responsibility in identifying the new CEO.

“A new meeting of the Board of Directors to appoint a new CEO was convened for November 18. The Board of Directors thanks Amos Genish for the work done in the interest of the Company and all its stakeholders in these fourteen months of intense activity.”

The removal of Genish had seemed inevitable since investor group Elliott won a battle with French conglomerate Vivendi, for control of the TIM board room, back in May of this year. Genish had previously been installed as CEO while Vivendi was still calling the shots, but after winning control Elliott made all the right noises about Genish having their full confidence.

This always seemed somewhat tenuous, with Genish’s loyalties presumably under suspicion and him providing at the very least a convenient scapegoat as and when things took a bad turn at the company. That came to pass last week when TIM said it was writing down the value of its assets by €2 billion and exacerbated by a disagreement between Genish and the board over what to do about TIM’s fixed line network.

Rumours emerged early this week that Genish’s days were numbered and that the board was about to convene a special meeting to agree on his demise. Hilariously TIM issued statements to the press denying such a thing was going to happen just a day or two before it did. TIM has a rich history of deceptive press communications but this outright lie was shameless even by its standards.

“This is a shock,” Analyst Paolo Pescatore of Midia Research told Telecoms.com. “However, ongoing turmoil at the company continues to drag it down. The company is very well placed given its assets and early move to secure a leadership position in 5G. Further tussles will hand its fierce rivals a competitive edge.”

So what next? Elliott apparently has less than a week to come up with an alternative CEO that will do its bidding and the remaining Vivendi board members will presumably oppose whoever they put forward. Above everything else, however, this is another opportunity to finally appoint a CEO whose first name is Tim. Surely everyone can agree on the importance of that.

The rumours were true – Philip Jansen will be the next BT boss

A week after the news was widely leaked, BT has confirmed that its next Chief Exec will be current Worldpay boss Philip Jansen.

Various factors made the move seem plausible, including the fact that Jansen had already resigned from Worldpay and the conspicuous lack of any other viable candidates revealing themselves in the months since the search to replace Gavin Patterson commenced.

Jansen has plenty of top-table pedigree, having been the main man at Worldpay for five years, during which he took the company public and then oversaw its merger with Vantiv at the start of this year. Both moves presumably didn’t do his bank balance any harm, which does call into question his motivation for taking on such a tricky job, but these CEO types just can’t help themselves, can they?

“I’m honoured to be appointed as the next Chief Executive of BT Group,” said Jansen. “BT is a special company with a wonderful history and a very exciting future. It has built a leading position across fixed and mobile networks, creating an opportunity to deliver increasing benefits for our customers, the UK economy and our shareholders.

“In a competitive market we will need to be absolutely focused on our customers’ needs and pursue the right technology investments to help grow the business. I’m excited to get to know all the people at BT and work together to take the business forward.”

“The Board is delighted to have appointed Philip as our new Chief Executive,” said BT Chairman Jan du Plessis. “He is a proven leader with outstanding experience in managing large complex businesses. Philip’s strong leadership has inspired his teams, successfully transformed businesses across multiple industries and created significant value for shareholders. His most recent success at Worldpay, a technology-led business, means he is well suited to build on the solid foundations that are in place at BT. I look forward to working with him to position BT at the heart of the UK’s digital economy.”

Jansen will join BT at the start of next year and will spend a month shadowing Patterson to make sure he knows the ropes before the latter retreats to the life of leisure it’s tempting to assume he’s already made a head-start on. The starting salary for BT CEO is £1.1 million plus a portfolio of benefits breathtaking in its opulence, including nearly $1 million in BT shares to compensate him for whatever Worldpay options he’s no longer able to cash in.

Worldpay is an electronic payments company so Jansen will have some adjusting to do at BT, but he was MD of Telewest a while back so all the telecomsy stuff will presumably come flooding back before long. Just bang on about 5G and fibre mate – it’s easy. The Openreach problem seems to be largely resolved but there will still be plenty of Ofcom fun to be had and it will be interesting to see how his style contrasts with Patterson’s.

BT rumoured to offer top job to Worldpay CEO

Following the exit of Baywatch lookalike Gavin Patterson, everyone has had a go at guessing who will be the next BT CEO. The wait may well be over with BT reportedly offering the job to Philip Jansen.

According to Bloomberg, BT have been in private discussions with Jansen for some time now, with the rumours of his ascension emerging in September. People familiar with the matter suggest an offer has been made, with BT potentially making the official announcement on November 1, alongside its financial results for Q3.

Irrelevant as to whether the rumours prove true, the new boss will have a tough job turning around a business which has faced several scandals over the last 12 months, profit warnings and a turbulent relationship with UK telco watchdog Ofcom. The team also need to fix a heavy pension deficit, while also finding additional funds to ensure both its broadband and mobile networks remain competitive. Over the last three years, share price has dropped roughly 59%, with it currently being the lowest for six years. Jansen might be heading into one of the toughest jobs in telco.

Adding to the rumours of the Jansen discussions is his resignation from Worldpay which was announced last month. Jansen will remain in the role until the end of the year, though the stars do seem to align.

While there have been several names thrown around, Jansen does make a compelling case. During his tenure, Jansen oversaw the $10.4 billion acquisition and merger of Worldpay rival Vantiv, adding a few interesting bullet points to his CV. With the EE purchase still to pay dividends, perhaps a fresh set of eyes, with experience in significant M&A is an attractive idea.

MegaFon CEO calls it a day, again

The boss of Russia’s second-largest MNO has decided to hand over the reins once more, having previously done so six years ago.

Sergey Soldatenkov started his current tenure as CEO of MegaFon in 2016 after Ivan Tavrin resigned in order to pursue other interests. This marked the reversal of the move four year earlier in which Tavarin stepped in as CEO, with Soldatenkov moving up to the Chairman position. The fact that he had to move back into the CEO office suggests Tavarin’s departure may have been somewhat sudden.

Soldatenkov’s second tenure as CEO was expected to last three years but that too has been cut short with MegaFon Executive Director Gevork Vermishian stepping up to the plate. There is no mention of Soldatenkov returning to the Chairman role so it looks like he’s just decided to call it a day at MegaFon.

“I have decided that the time has come to hand the reins to Gevork,” said Soldatenkov. “I have been involved with the company since its creation, almost 20 years ago. Throughout this time we have been at the forefront of innovation.

“However, we have been conscious for a long time of the need for a management succession plan. With this in mind, we asked Gevork to take on the role of Executive Director last October, with a view to having me focus on strategy and government relations and having Gevork take on operational issues. In this way it was possible to gradually transition responsibilities to Gevork, and I believe that he is now ready to take over my responsibilities as well and assume full control of the management of the Company.

“I want to thank Sergey Vladimirovich for his huge contribution to the company over the years,” said Ivan Streshinsky, CEO of holding company USM Management. “He is a unique person – he has spent his entire career in telecoms, and as a result he understands the sector better than anyone else. Our decision in 2016 to ask him to return to the position of CEO clearly paid off handsomely.”

MegaFon has 29% of Russian mobile subscribers according to Ovum’s WCIS, just behind MTS with 30% or so.