Nokia’s top leadership is heading for the exits as the company continues to struggle amid a heightened period of 5G deployment activity. CEO Rajeev Suri is leaving his position on Aug. 31, and Chairman Risto Siilasmaa plans to leave his role next month.

The struggling infrastructure vendor didn’t search far for a new CEO or board chairperson. Pekka Lundmark, who currently serves as president and CEO of Fortum, an energy company also headquartered in Espoo, Finland, has been tapped to replace Suri on Sept. 1. And Sari Baldauf, vice chair of Nokia’s board, is expected to assume the position of chair when the board votes next month.

During a press conference, Lundmark said he isn’t coming into the top role at Nokia with any foregone conclusions about the company’s current strategy or outlook, but he is widely expected to review options to elevate Nokia’s market position.

Much of the company’s current 5G product portfolio carries high costs that have impacted its profit margin, but Nokia’s executive team insists its new radio access network (RAN) equipment that features a new system-on-a-chip (SoC) is expected to reverse that trend with greater performance at lower costs. However, that new hardware won’t reach a majority of its 5G shipments until sometime next year.

The Finnish vendor previously slashed its profit outlook through 2020 and shares are taking a sustained hit as a result. The company has shed 35% in total market value during the last 12 months.

The executive changes come less than a week after Bloomberg reported, citing anonymous sources, that the company is reviewing strategic options including asset sales, a potential merger with Ericsson, or a shifting of investments. “We do not have any such actions underway,” Chairman Risto Siilasmaa said.

“We are very convinced that our broad product portfolio is a good choice. We also believe that our expansion into software and enterprise are the right way to go, and therefore we are not currently working on any strategic reassessment. But of course we expect the new CEO to do his review of our strategy and he may propose changes to that strategy to the board in due course,” he said.

Siilasmaa declined to comment on rumors about a potential tie-up with Ericsson, it’s closest and fiercest competitor. He also maintained that the succession process has been underway for a while and that it is not related to any recent events. “It’s not all doom and gloom,” he said when pressed to comment on the rumors.

“Very few companies can go through the kind of radical change that Nokia has been through and emerge as an industry leader, but that is what Nokia has been able to do and it is a testament to Rajeev as a person and as a leader,” he said.

Lundmark, who also held multiple executive positions at Nokia for a decade ending in 2000, highlighted his experience with network operators and enterprises across several industries as an asset that will be essential to tap the full potential of 5G. “I have no doubt that there is opportunity for us and for our operator customers as enterprises go digital,” he said.

Chris Nicoll, principal analyst at ACG Research, said his main concern is that Nokia is bringing in an executive who hasn’t worked in telecom for 20 years, which means his involvement ended prior to the ascension of LTE. “The world today is much more software driven, enterprise and business case driven than the connection-oriented world he knew before,” Nicoll said.

“[Suri] inherited a mess in the Nokia acquisitions of the past and the institutional issues that lingered hampered his ability to drive Nokia to where he wanted it to go,” he said, describing Suri as a good and accessible communicator.

Suri leaves Nokia after 25 years at the company and more than a decade as CEO. “I’m proud that during my time as CEO Nokia has become the world’s No. 2 player in telecommunications infrastructure growing from a No. 4 position, that we have successfully extended our portfolio into software and enterprise, that we have 68 5G wins and launched 19 5G networks and over 130 private wireless networks,” he said.

“Sure, we’ve had our share of ups and downs but Nokia has been around for more than 150 years and I leave knowing that there is the potential for 150 more,” Suri said.

“5G is a complete change in network architecture and so there’s a virtuous cycle of 5G and that requires updating of multiple domains,” including RAN, transport, core networks, software, fixed wireless access, and enterprise services, he said.

5G deployments are moving into the mainstream with 60 to 80 operators expected to activate 5G services this year, Suri explained. Those networks won’t all be operating on Nokia equipment or software, but he argued that the company is well positioned to earn more business from a universe of approximately 800 network operators around the world.

During 2019 Nokia captured 16% of revenue from the global telecom equipment market, according to new research from Dell’Oro Group. That places it in second behind Huawei at 28%, and ahead of Ericsson at 14%, ZTE at 10%, and Cisco at 7%. Relative to 2018 revenue shares, Nokia slipped a percentage point while Huawei and Ericsson maintained their market shares, ZTE gained 2% of total market share, and Cisco dropped 1%, according to the analyst firm’s calculations.

Suri will remain with Nokia in an advisory role through 2020 and the company said the timeline for Lundmark’s assumption of his role is based on his availability. “It has been an honor to serve Nokia these many years,” Suri said. “It is the right time for me to step aside.”