Nokia’s Capital Markets Day 2025: A Tough but Necessary Reality Check for Private Cellular—with a Brighter Future in Sight

At its recent Capital Markets Day, Nokia unveiled a major strategic realignment to capitalize on the Artificial Intelligence (AI)-driven network “supercycle,” reorganizing into two core segments: Network Infrastructure and Mobile Networks, while moving non-core units into a new “Portfolio Businesses” category for future review. Within this context, Nokia reaffirmed its commitment—after some initial confusion—to mission-critical private wireless solutions for sectors such as energy, transportation, and public safety, which remain strategically important.

However, the company announced that its Enterprise Campus Edge (ECE) unit, including integration-heavy offerings like the Digital Automation Cloud (DAC), will transition into the Portfolio Businesses segment. This shift indicates that ECE is no longer core and will be evaluated for potential divestment or partnerships by 2026. Going forward, Nokia’s private cellular strategy will focus on delivering connectivity hardware (radios and core) and supporting enterprise deployments primarily through telco and systems integrator channels, rather than direct integration services.

Nokia’s decision follows a clear logic and a careful analysis of successful Go-to-Market (GTM) strategies that we have also seen at ABI Research. While the telco industry has a strong channel into the mission-critical connectivity sector (look at Nokia’s recent acquisitions in the defense sector in the United States or engagements with rail operators around the world as examples), the channel for enterprise campus connectivity always has been a fragile one, although the value proposition of private cellular for industrial enterprise use cases remains incredibly strong. The high reliability and guaranteed network availability allows enterprises to digitize and automate even their highly critical applications (which otherwise would have had to remain manually operated).  This becomes even more pertinent as the enterprise connectivity landscape changes considerably with the emergence of Artificial Intelligence (AI) and enterprise AI applications. Enterprises increasingly require local fine-tuning and inference at the edge to ensure data integrity, reduce latency, and maintain compliance with regulatory and sovereignty requirements. This shift, in turn, increases the requirements toward the underlying connectivity layer to transmit these workloads, which Wi-Fi and other best- effort connectivity technologies will struggle to deliver on a reliable basis.

Enterprises prioritize turnkey, end-to-end applications over individual connectivity technologies, requiring private cellular providers to build strong ecosystems of application, device, and automation partners. The telco industry, however, has traditionally focused on delivering only the connectivity layer, leaving a critical gap in meeting enterprise expectations for integrated solutions. Consequently, industrial enterprises (with Operational Technology (OT)-heavy use cases) have been constantly reluctant to work with what they perceive as “the telco industry,” including infrastructure vendors, network operators, and telco-focused system integrators (e.g., Wipro, Tata Consultancy Services, or World Wide Technology). This fragile GTM channel of the telco industry ultimately resulted in a very timid adoption of private cellular (at least outside China and other advanced economies in the Asia-Pacific region).

We can conclude that the proclaimed value proposition of private cellular as a “globally-dominant” enterprise connectivity solution has been somewhat arrogant, as it neglected the fragmentation of different enterprise verticals and their respective supply chains, and the strength of existing enterprise digitization vendor relationships with the resulting immense incumbent advantage. Consequently, for campus enterprise private cellular connectivity, a horizontally-focused player like the approach of all of the telco infrastructure vendors or any of the Global System Integrators (GSI) will struggle to deliver on this vertical-specific private cellular value proposition. At the same time, system integrators and industrial automation vendors without any networking/connectivity expertise will also find it difficult to integrate private cellular into their offering, as the deployment operation and management requires a very specific skillset and capabilities to map and translate enterprise requirements into technology specifications.

This dynamic makes vertically-specialized system integrators and industrial automation vendors with networking expertise (e.g., Siemens and others) compelling candidates for a future home of Nokia’s ECE business unit. These companies combine deep OT knowledge with integration capabilities and trusted factory floor relationships, enabling them to deliver end-to-end digitization solutions where private cellular is a critical component. Ideally, the successful provider will have enterprise application development skills in-house and existing application platforms (e.g., the Siemens Insights Hub, Rockwell Automation FactoryTalk, Bosch IoT Suite, and others). These existing platforms can also offer enterprises a single pane of glass to manage not only their applications, but also the underlying connectivity network infrastructure. Being able to offer a low-code environment for custom application development (like Siemens has with Mendix) will be an additional unique selling point that will attract industrial enterprises.

In the age of AI, the successful new provider of private cellular will also require a dedicated set of expertise both in terms of vertical-specific AI applications (to tailor the private cellular network to deliver on the specific requirements), and in terms of how to apply AI to the private cellular network in order to ease deployments and simplify network management/operations. Again, industrial automation vendors, with their existing AI expertise, will be in an ideal position to execute on both accounts.