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Beginnings
Nokia began its life by a river of the same name in Finland when Fredrik
Idestam set up a wood-pulp mill to manufacture paper in 1865. In 1898
a rubber company was established in the same region although unconnected
with the other business. Later, in 1912, a company that became known
as the Finnish Cable Works opened in the centre of Helsinki. Ten years
on, the Finnish Rubber Works bought majority shares in both Finnish
Cable Works and Nokia Ab, the ground wood producer. Thus the three independent
companies began to pool their resources and co-operate, evolving into
a more cohesive group. Over time a community established itself around
the factories and became the town of Nokia. The companies continued
to operate under a single umbrella for some considerable time. In fact
it was only as recently as 1966 that the companies decided officially
to merge and Nokia began functioning as the business that we recognise
today. When all of the Nokia divisions joined in the 1960's, electronics
made up about 3% of the overall company sales. By 1980, Nokia had begun
focusing its energies internationally on becoming a communications company.
It was around this time that a department called Dedicated Networks
was set up to deal specifically with transmission technology and Private
Mobile Radio (PMR). Although initially based in Finland, Dedicated Networks
had a global sales base. The seeds of Nokia's eventual international
success had been planted.
Arrival
In 1984, Dedicated Networks arrived in the UK with avery small workforce
of only a few people to test thelikely success of a local UK branch.
However beforelong deals had been secured with both East Coast Railand
British Gas Eastern for transmission and PMRequipment. Simply because
both of these companieswere based in East Anglia, Nokia too made its
homethere, in a small office on the Cambridge Science Park.Later in
that same decade, a section of Nokia'sbusiness called Nokia Cellular
Systems was formed todeal with mobile communications infrastructure.Nokia's
UK history had begun - its quiet arrival in themid 1980's belying the
explosive growth soon tobegin, where Nokia would become one of the largestand
most successful businesses in the UK.
Early Growth
Nokia's unrivalled expansion came at the beginning ofthe 1990's, initiated
by the signing of a contract withCellnet to supply base stations throughout
the UK.Despite a small workforce, an entrepreneurial ethosand irrepressible
self-belief ensured that Nokiawas more than capable of taking on establishedUK
businesses.Gaining the Cellnet contract was not only a major coupfor
such a young company. It also gave Nokia boththe financial power to
expand, and the credibilitywith potential clients that it was a major
corporatefigure in UK business.Cellnet required the first base stations
to be producedlocally, so a production unit was set up at Huntingdonin
a building named 'The Forum'. Meanwhile, by theend of 1990, Research
and Development hadexpanded the Cambridge office from a few employeesto
over 60.In 1991 Nokia began looking for a second networkoperator customer.
And by the end of that year hadwon the business as sole supplier for
GSMinfrastructure within the UK for Microtel - aconsortium of British
Oxygen, British Aerospace andHutchison Whampoa, soon to be launched
as Orange.The first payment received in this deal was around £4million.
Although a seemingly small amount bytoday's standards, the deal enabled
Nokia to cementits UK operations. The move into the UK marketplacehad
been a success.
The Cable Effect
The contracts that were gained in the early part ofNokia's UK history
heralded the arrival of the companyas a major player in the UK telecommunicationsindustry.
Another contributor to this growth was theGovernment's deregulation
of Cable TV in the firstquarter of 1992.The effect on Nokia's growth
was enormous. Althoughfixed telephony had been deregulated in 1985,
it tooktime for cables to be renewed so that other businessescould compete
with BT.Nokia was quick to take advantage of the opportunity,immediately
securing Telewest Communication as acustomer for the supply of transmission,
accessand switching equipment for their nationaltelephony network.In
the next few years, more contracts were securedwith Videotron, Bell
Cable Media and NYNEX (allsubsequently part of Cable and Wireless and
todayntl). This made a distinct contribution to Nokia'sfinancial standing
and prompted further expansionacross the country.
Expansion
Nokia's business growth was matched by aproliferation of sites and locations
across the SouthEast. The Cambridge office was filling up fast and TheForum
in Huntingdon did not have the capacity tocater for the speed at which
base stations were beingbuilt for Cellnet.Between 1986 and 1989 Nokia
acquired the Finnishradio and television manufacturer, Salora, as well
asLuxor AB and Schaub-Lorenz, inheriting their offices inSwindon, Slough
and Basildon.Most importantly, the acquisition of Schaub-Lorenzbrought
Nokia the licence to the ITT brandname -a major recognisable name within
consumerelectronics, especially in Europe.In 1992, the local Huntingdon
MP, then Chancellor ofthe Exchequer and soon-to-be Prime MinisterJohn
Major opened the new Lancaster House siteto accommodate the growing
number of NokiaUK employees.Later that same year Nokia bought anothertelecommunications
company, Technophone,inheriting both its manufacturing plant in Camberleyand
a skilled workforce.Even with these new facilities, Nokia Mobile Phonesdivision
required a still larger production site. Someoperations were moved to
Dallas, allowingCamberley's buildings to focus primarily on BaseStation
production - delivering to both Cellnet andMicrotel by early 1992.At
this time Nokia had around 150 employees in theUK. But huge new projects
would transform this again.Although initially the Camberley building
was requiredonly to produce five to ten base station units eachweek,
due to escalating demand it soon becameapparent that more space would
be needed.So, in 1994 a prestigious new factory was purposebuilt,its
35,000 square metres immediately filling upto allow construction of
the hundreds of units that were to be delivered every month.By this
stage the organisation had developeddistinctive characters to its northern
and southernoperations within the South East. The southern regiondealing
with mobile phones, the north with networksolutions. One of the main
factors contributing to thiswas the degree of travel required in the
Mobile Phonesteam, which depended on Camberley's close and easyaccess
to the major UK airports.A Peterborough office was opened in 1996 as
a sistersite to Huntingdon. Nokia UK had by now laid downthe solid foundations
for its growth and developmentinto the company we know today.
Telecommunications Focus
Looking at the early 1990's the Telecommunicationsand Mobile Phones
divisions made up only a smallpercentage of Nokia's overall UK constitution.
However,despite making up the majority of the company bothIT and Consumer
Electronics had by then begun to feelthe effect of a global downturn
in both areas.But Nokia by this stage had become quite accustomedto
managing change both in its industries and, in turn,within itself. Arguably
the most influential decision inthe company's history was when Jorma
Ollila, thenewly appointed CEO, chose to focus Nokia's financialand
creative efforts on the communications sector.The timing of this decision
was such that Nokiabecame set on a course which would see itsproducts
and service rapidly become part of thefabric of western society, particularly
in the key
were to be delivered every month.By this stage the organisation had
developeddistinctive characters to its northern and southernoperations
within the South East. The southern regiondealing with mobile phones,
the north with networksolutions. One of the main factors contributing
to thiswas the degree of travel required in the Mobile Phonesteam, which
depended on Camberley's close and easyaccess to the major UK airports.A
Peterborough office was opened in 1996 as a sistersite to Huntingdon.
Nokia UK had by now laid downthe solid foundations for its growth and
developmentinto the company we know today.phones that found their way
into the nation's pocketsthroughout the 1990's. Nokia's incisive businessacumen
had ensured that, despite arriving in the UK as a relatively small company,
it had managed toovertake all its established rivals within a few years.During
this period business partnerships andalliances which were forged in
other areas of thecompany allowed further profitable affiliations in
themobile communications industry. 1997 saw Nokiaproviding a major communications
network to Cellnetand signing an agreement withOrange for mobile telephonenetwork
expansion equipmentworth £150 million.
Success in the 90's
By now these contracts had cemented Nokia'sstanding as a major international
business in theUK, and had allowed the company to direct bothenergy
and money towards new and profitableways of continuing its success.
It was in the latterpart of the 1990's that this success started to
exceedall expectations.By mid-1995 cable TV operators had found that
theirbusiness was not going nearly as well as had beenpredicted, with
expenditure far exceeding income.Projects began to be scaled down and,
as a directresult, a sizeable part of Nokia's UK business was indanger
of diminishing.But in 1996 a global decision was taken to put moreemphasis
on mobile telecommunications, which inthe UK led to the company dramatically
increasing itsmarket share. Nokia's characteristic ability to foreseemarket
changes and adapt accordingly was never soacutely successful as in this
period.The contract signed in 1997 with Orange was thelargest agreed
in any section of Nokia's UK businessat that time. This was followed
in 1998 by Orangeannouncing that Nokia had been selected as the keysupplier
for the accelerated construction of its GSM1800 network - further endorsing
Nokia's rapid rise inthe telecommunications industry.At the time the
contract meant that Nokia'sinfrastructure would be used by Orange as
theplatform to launch advanced new mobile servicessuch as real internet
browsing, online information,home shopping and narrow band television.Nokia
mobile phones had already begun to dominatea fiercely competitive market
and with these newcontracts a productive future looked set to continue.This
contract meant that Nokia's infrastructure wouldbe used by Orange as
the platform to launchadvanced new mobile services such as real internetbrowsing,
online information, home shopping andnarrow band television.Nokia mobile
phones had already begun to dominatea fiercely competitive market. With
deals like these, aproductive future looked set to continue.
Connections
Business grew in the late 1990's on a number oflevels. Nokia's large-scale
production of digitalterrestrial receivers allowed people nationwide
toreceive quality digital television and additionalchannels without
the need for a satellite dish.In addition to Nokia's long-standing relationship
withCellnet (formerly BT Cellnet, now mm02) the companywas ensured a
profitable income. In 1998 a networkexpansion contract worth £200
million was finalisedwith Cellnet alongside a new agreement withRedstone
Telecom and an equipment contract withCable and Wireless UK. Thus, existing
businessrelationships flourished, while additional ones allowedNokia
to further grow in its major areas of expertise.With the end of the
century approaching, Nokia's namehad become synonymous with phenomenal
success -all the more impressive given the company'scomparatively recent
history in the UK.Nokia mobile phones, popular not only for their easeof
use and functionality but also their unique style,already grace the
lives of millions of Britons.With Jorma Ollila's astute decision to
streamline thebusiness to focus on telecommunications, businessalliances
and contracts have been both developed andreinforced. Nokia UK today
continues to go fromstrength to strength in many different fields.Nokia's
future lies not only in the strengthening of itsalliances, but also
in the development of newtechnologies for the next generation in mobilecommunications.Most
importantly, Nokia intends to continuepredicting and adapting to changes
in themarketplace based on the way people want toconnect with each other.In
the same way that three diverse businessesforesaw the benefits of working
innovatively togetherbeside the Nokia rapids almost 150 years ago, so
tooNokia UK's interests will thrive in the continual flux oftoday's
business climate.
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