Nokia’s new CEO Pekka Lundmark is settling into his role this week confronting multiple challenges, including a double-digit decline in sales, underperforming and high-cost 5G equipment, the ongoing COVID-19 crisis, and lingering questions about one of its flagship operator accounts in the U.S. market.

Lundmark replaces former CEO Rajeev Suri, who spent 25 years with the company, leading its networks division from 2009 and later oversaw the company’s acquisition of Alcatel-Lucent as CEO of a company that experienced dramatic upheaval to its once-market-leading mobile phone business in the previous decade. 

The Finnish vendor’s new leader hasn’t worked at a telecommunications company for 20 years, but previously held multiple executive positions at Nokia from 1990 to 2000. “In my two decades away from Nokia, I have been fortunate enough to lead companies as diverse as Konecranes and Fortum, seeing firsthand what it takes to launch successful start-ups, the challenge of maintaining success as a company grows, and the important of embracing digitalization and continuing to innovate to stay ahead of the competition,” he wrote in a blog post titled “The Nokia I want to lead.” 

When his appointment was announced at a press conference in March, Lundmark said he isn’t coming into the role with any foregone conclusions, but he is widely expected to review all options to elevate Nokia’s market position. 

“I feel as if I am in a privileged position of having both an insider’s and an outsider’s perspective on Nokia. There are both opportunities to seize and challenges to overcome,” he wrote, citing a detailed and accurate understanding of those opportunities and challenges as his immediate priority.

The first half of 2020 was an undeniable whirlwind for Nokia, but it’s been through worse periods of calamity. Nonetheless, Lundmark faces headwinds that are unique among Nokia’s peers in the radio access network (RAN) market.

Struggles include media reports about a hostile takeover bid that’s been held at bay since April and a widespread strategic review that could result in asset sales or a potential merger with Ericsson. 

After slashing its profit outlook through 2020, months before the pandemic hit, the Finnish vendor introduced second-generation RAN 5G gear featuring a new system-on-a-chip (SoC) in a bid to improve performance and lower costs. Nokia last week said the new hardware remains on track to comprise 35% of its 5G shipments by the end of 2020, but previously said it won’t reach all 5G shipments until the end of 2022. 

Moreover, Nokia’s challenges in delivering 5G performance likely weighed heavily on Verizon’s decision to remove the vendor as a 5G supplier and rip out all of Nokia’s legacy 4G LTE equipment from its network. That decision will see Verizon go from three RAN vendors to two, effectively splitting its RAN contract with Ericsson and Samsung going forward, according to Ryan Koontz, senior research analyst at Rosenblatt Securities.

When asked about the report during its second quarter of 2020 conference call with analysts last week, Suri provided only a boilerplate answer and declined to comment further.

Lundmark, for all intents and purposes, appears to be joining Nokia with eyes wide open. His early tenure in the top job will likely lead to some significant and tough changes, and the company’s board has indicated it expects nothing less. 

“I want to empower my own team at Nokia to challenge and change how we do things if that means we can do things better,” Lundmark explained. “I want Nokia to be the partner of choice for operators, enterprises, governments, and everyone who shares our views that companies have a duty to act in the interests of society as well as shareholders.”

We are very excited to welcome Pekka Lundmark as our new CEO and President today. He is returning to lead Nokia at an important time for our industry. https://t.co/EMJGyGMBY0 Follow him on Twitter @PekkaLundmark. #TeamNokia #leadership pic.twitter.com/VoR8PN191c

— Nokia (@nokia) August 3, 2020

While technology is pervasive in many markets, “the challenge now is against complacency and accepting the status quo,” Lundmark added. “The truly transformative power of widespread digitalization, industrial automation, IoT, and artificial intelligence have yet to be unleashed.”

Indeed, Nokia and Lundmark are playing up his experience in industries that are expecting to benefit from these technologies as 5G network deployments gain momentum and develop specialized use cases for myriad enterprises.

“Our networks and the connectivity we create will play a crucial part in driving forward all of those Fourth Industrial Revolution technologies and more,” Lundmark wrote in establishing his aspirations for the company. “The Nokia I want to be a part of is the one that enables groundbreaking digital health care, automated transportation, brings learning and education to students in remote parts of the world, and helps address climate change and build a more sustainable world for our children and grandchildren.”