By Sophia, Original
Just about a year ago, Nokia announced in the capital market the launch of a business portfolio adjustment, classifying Enterprise Campus Edge (ECE) as a non-core business and planning to determine its future direction in 2026. This decision immediately raised questions in the market about its private 5G strategy: Is Nokia paving the way to sell ECE, or even preparing to exit a market it has cultivated for many years?
In response to external doubts, Nokia quickly responded, emphasizing that its "leadership and commitment" in the private 5G market remain unchanged, and stated that it will continue to provide relevant solutions for mission-critical enterprises. Since then, Nokia has also continued to advance its private wireless network and industrial edge businesses, including cooperative projects in fields such as mining and utilities.
A year later, rumors have turned into reality—on October 13, Nokia announced that it has signed an agreement with AURELIUS, a Munich-headquartered private equity investment firm, to sell the ECE business. The transaction is expected to be completed in the first half of 2027, subject to the fulfillment of relevant closing conditions.
ECE is the primary carrier unit for Nokia's private network business, with annual sales exceeding EUR 170 million and approximately 1,000 employees. Its main operations are distributed across Finland, Hungary, India, and the United States. It is reported that Nokia will retain a licensing agreement with AURELIUS to continue providing supporting private 4G/5G wireless equipment for the core network systems (DAC) and edge computing products (MXIE) sold by ECE to enterprise customers. Through this transaction, AURELIUS will take over one of the largest and most mature Industry 4.0 customer bases in the private network sector.
It is worth noting that Nokia will continue to sell larger-scale private 4G/5G core network systems to the utilities, defense, and railway markets in the future. These systems do not adopt the streamlined DAC architecture designed for enterprise campus scenarios, so Nokia is not completely exiting the private 4G/5G network market. However, we cannot help but wonder why this Finnish giant, which once established a significant position in the private wireless network market relying on its communication technology, industrial customers, and first-mover advantage, ultimately chose to abandon its enterprise campus private network business. Is this merely a proactive contraction of non-core assets by Nokia, or a signal that large communication equipment vendors are redrawing competitive boundaries in the industrial digitalization market?
Reviewing the History of Nokia's Private Network Development
Looking back at the development history of Nokia's private network business, it can be traced back to 2017.
At that time, Nokia announced the expansion of its radio access and core network technologies for enterprise digital transformation, with products covering small cells, Wi-Fi, Multi-access Edge Computing (MEC), and cloudified packet core networks. Enterprises could either manage the networks themselves or obtain related services through operators. This reflected that Nokia had already realized at the time that industrial enterprises needed not just public mobile network coverage, but dedicated networks capable of meeting the on-site production demands for security, reliability, low latency, and asset connectivity.
Subsequently, Nokia continued to explore the servitization of private networks through DAC (Digital Automation Cloud). DAC is not just a combination of wireless network equipment; it also integrates connectivity, cloud management, and industrial application capabilities into a unified platform. In 2019, Nokia announced that it had signed private wireless network agreements with more than 120 companies, involving multiple industries and fields such as transportation, energy, the public sector, logistics, and manufacturing.
In July 2020, Nokia officially launched its commercial 5G SA private network solution for the industrial sector, offering two options: Digital Automation Cloud (DAC) and Modular Private Wireless (MPW). The former emphasizes a compact and convenient deployment experience, while the latter targets enterprises with higher customization needs. This marked the beginning of Nokia promoting the application of 5G private networks in industrial scenarios with a more complete portfolio of commercial products.
In 2021, alongside the advancement of 5G Release 16, the global 5G private network market, represented by markets such as Germany, Japan, and South Korea, entered a stage of accelerated development. Official press releases showed that Nokia had deployed 300 private networks in 2021, further demonstrating that its servitized private network business had reached a certain scale.
From 2023 to 2024, Nokia continued to expand its private network market coverage through system integrators, operators, and other partners, while simultaneously launching solutions more suitable for small and medium-sized enterprises.
Up until the announcement of the sale of ECE, the company had been continuously advancing its private network-related businesses.
Benefiting from years of accumulation, Nokia can be said to have achieved the number one position in this track. According to third-party market research data, Nokia captured approximately 28% of global private network radio access network sales and 22% of private network core network sales. The ECE department holds a pivotal position in Nokia's private network landscape, covering approximately 90% of Nokia's wireless private network customer base. Currently, Nokia has about 1,000 private network customers globally, of which the ECE department serves nearly 900 global enterprise customers, including multiple Fortune 500 companies.
Precisely because of this, this sale has sparked widespread discussion in the industry.
The overall judgment of most independent analysts is: Nokia's decision, to put it mildly, appears ruthless, and to put it severely, is baffling, and may carry a clear tendency towards short-termism.
Asad Khan, Research Director at SNS Telecom & Research, in an interview with RCR Wireless, stated that considering the recent strong momentum of larger, multi-site private 5G projects in the campus network field, Nokia's decision is "indeed surprising." He believes that from the perspective of short-term profitability, this move "might have its rationality"; but considering the direction of market development and the more than ten years of effort Nokia has invested in building the ECE business unit, this decision is "even harder to understand."
Short-sighted Strategy or Lightening the Load?
The industry had previously widely predicted that the ECE business would be acquired by an industry consulting firm or a system integrator. According to RCR Wireless, some suppliers in the industrial sector had reviewed the business's accounts but ultimately backed out due to its licensing arrangements. As the sale process continued to be delayed, private equity investment seemed to become a better option.
As the acquirer, AURELIUS is a global private equity investment firm renowned for its excellent operating model. The company focuses on the private market, with a particular emphasis on private equity and private debt investments. Its main investment platforms include AURELIUS Opportunities V, AURELIUS European Opportunities IV, AUR Portfolio III, and AURELIUS Growth. AURELIUS is particularly adept at handling projects with operational improvement potential, such as business divestitures, platform building, or succession solutions, as well as customized financing solutions.
To date, AURELIUS has completed more than 300 transactions and currently owns 49 portfolio companies—including UK technology distributor Exertis (acquired in 2025), Swiss electronic products distributor Distrelec (acquired in 2023), and UK pharmaceutical distributor AAH Pharmaceuticals (acquired in 2021). Its portfolio also covers fields such as industrial manufacturing, mobility services, software, and business services. These business layouts indicate that there is good channel synergy potential between AURELIUS and ECE.
The real challenge lies in the fact that ECE has historically relied heavily on its parent company's innovation capabilities to drive business development—relying on Nokia in the communications field and Bell Labs in the computing field. After detaching from these resources, how will ECE maintain the pace of technological progress? The private 4G/5G market is developing rapidly, and enterprises need to continuously increase innovation efforts, constantly explore new applications and use cases, and further enhance the value of products and solutions. The question is whether AURELIUS views ECE as an industrial network company that can develop independently and be sold in the future, or merely as an asset whose value can be enhanced once spun off from Nokia.
Even if ECE is merely treated as an independently operating innovation unit creating value for the industrial edge sector, it should inherently hold significant importance. ECE already possesses a customer base and actual deployment projects, and can be said to have completed the most difficult step for telecom and tech companies entering the Industry 4.0 field: truly entering industrial production and operation scenarios and gaining a foothold in actual industrial processes. However, holding an advantageous position in a certain market does not mean that this business has a sufficiently strong strategic fit with the parent company. What really needs to be tested is whether the private equity ownership model can maintain and continue the innovation capabilities previously provided by Nokia with its own resources.
Although many people find Nokia's strategic decision baffling, some can understand Nokia's strategic logic—when announcing its quarterly results in July, Nokia had already listed the FWA and ECE business units as "discontinued operations." According to Nokia's second-quarter earnings statement, calculated on a combined basis, these two businesses still contributed EUR 66 million in revenue, but at the same time diluted earnings by approximately EUR 13 million.
With the sale of the FWA business to Inseego and the ECE business to AURELIUS, Nokia has effectively shed two underperforming "business portfolio" units. Consequently, the focus of this Finnish company has been simplified to two major "super-cycle" businesses: "Mobile Infrastructure" (MI, selling cellular networks to telecom operators) and "Network Infrastructure" (NI, selling fiber optics to anyone who needs it, including those AI and cloud computing companies that are in urgent need of fiber and have deep pockets).
James Moar from Kelido Intelligence commented: "Nokia's choice to exit a market it helped pioneer may be related to economies of scale. Although Nokia holds a dominant position in the private network market, the scale of each individual network project is relatively small, and successful implementation often requires meticulous and complex system integration. It is worth noting that Nokia still retains its private network business for mission-critical enterprises, which typically involves transportation, energy, and other wide-area application scenarios, with often larger deployment scales."
"Nokia is not necessarily completely abandoning the private network market—although the decision to sell ECE can indeed be easily interpreted as exiting this market—which also reflects its preference for business scale. Nokia has invested a lot of effort in understanding the private cellular network market, but it will still provide relevant capabilities, only preferring to serve larger projects with profit margins that better meet its own expectations. This type of business is also closer to Nokia's traditional radio access network (RAN) market."
Leo Gergs from ABI Research stated: "ECE once claimed a market share of about 50% in the private LTE/5G market; however, the contract value for campus network projects is usually only about USD 1 million, and about 70% of the projects are completed through channels. Although Nokia led this market, it never truly mastered customer relationships. For Nokia, this is the right decision. It chose to refocus on its positioning as a technology company, investing resources in large, long-cycle projects in fields such as energy, transportation, and public safety. In these fields, carrier-grade core networks, wireless equipment, and transport networks can truly exert differentiated advantages."
Final Thoughts
The growth prospects of the private cellular network market are perhaps the most thought-provoking aspect of Nokia's sale of the ECE business.
SNS Telecom & Research estimates that the private cellular network portion of global cellular network infrastructure spending will reach USD 2.8 billion in 2026, and is expected to increase to USD 6.6 billion by the end of 2029. Currently, the share of private cellular networks in total global cellular network infrastructure spending is already slightly above 7%, and by the mid-2030s, this proportion could even reach one-third.
Of course, market forecasts do not equal reality. As industrial 5G moves from proof of concept to scaled deployment, it still faces multiple challenges such as return on investment, system integration, operation and maintenance complexity, and enterprise digital capabilities. The market has also experienced considerable over-hyping. But even so, the demand from industrial enterprises for reliable connectivity, real-time data, and production automation has not disappeared.
Therefore, Nokia's sale of ECE does not necessarily mean that the private 5G market has lost its appeal. What is more worthy of attention is market growth and whether enterprises can obtain sufficient commercial returns from it. For Nokia, handing over the campus private network business to a new owner may be an adjustment of resource allocation and strategic focus; for AURELIUS, taking over this business with a mature customer base means gaining the opportunity to continue tapping into the industrial digitalization market.
But the next phase of competition in private 5G has just begun...
References:
Nokia expands private wireless network portfolio to support enterprises in their digital transformation
AURELIUS to acquire Nokia’s Enterprise Campus Edge business
Nokia to sell Enterprise Campus Edge business to AURELIUS
Mission critical? Mission, failed – inside Nokia’s private 5G omnishambles——RCR
Nokia Sells ECE, Exiting Private Network Business on a Large Scale——C114
"Nokia Exits Private5G"? Why the Rush to Clarify——Zashuo Zhi Qiqibaba
Nokia Sold a World Number One——Tongxin Hangye Banzhuangong