A n
`
`n
`
`u
`
`a
`
`l
`
`p
`
`o
`
`r
`
`t
`
` R e
`
`
`
`
`
`1
`
`9
`
`9
`
`7
`
`Twitter-Google Exhibit 1061
`Page 1 of 83
`
`Twitter-Google Exhibit 1061
`Page 1 of 83
`
`

`

`NOKIA
`
`Nokia is the world’s second largest mobile phone manufacturer and a leading suppli-
`
`er of digital mobile and fixed networks. As a broad-scope telecommunications com-
`
`pany, Nokia also supplies multimedia equipment, satellite and cable receivers, com-
`
`puter monitors, as well as other telecommunications related products.
`
`Another record year’s results reflect solid achievements in all business areas. In
`
`1997, Nokia had sales in 130 countries, totaling FIM 52.6 billion (USD 9.8 billion), and
`
`employed more than 36,000 people.
`
`It’s not just ideas and processes.
`
`It’s more like design,
`
`I N S P I R A T I O N, visions, human touch…
`Nokia Connecting People.
`
`Nokia offers advanced solutions and
`
`products within wireless and wireline
`
`telecommunications, including mobile
`
`and fixed networks, mobile phones and
`
`other terminals for voice, data, picture
`
`and video. Global research and develop-
`
`ment activities serve all Nokia entities, contributing to future technologies and bringing
`
`added value to our customers. Special attention is given to third generation wireless sys-
`
`tems, multimedia and Internet applications, as well as network management solutions.
`
`Nokia strives for continued leadership in the fastest growing global telecommuni-
`
`cations segments through speed in anticipating and fulfilling customer and consumer
`
`needs, quality in products and processes, as well as openness with people and their
`
`new ideas.
`
`Twitter-Google Exhibit 1061
`Page 2 of 83
`
`

`

`Table of Contents
`
`2
`
`3
`
`4
`
`6
`
`8
`
`18
`
`20
`
`22
`
`24
`
`66
`
`68
`
`70
`
`72
`
`74
`
`79
`
`80
`
`Highlights
`
`Key Data
`
`Nokia Group
`
`Review by the President and CEO
`
`Review of Operations
`
`Research and Development
`
`Environment
`
`Human Resources
`
`Financial Statements (detailed Table of Contents, page 24)
`
`Board of Directors
`
`Management
`
`Nokia Worldwide
`
`Press Releases
`
`Nokia Shares and Shareholders
`
`Investor Information
`
`Abbreviations
`
`1
`
`Twitter-Google Exhibit 1061
`Page 3 of 83
`
`

`

`Nokia 1997
`
`Highlights
`
`(cid:1) Nokia sold 21.3 million mobile phones, with a global market share of over 21%.
`
`(cid:1) Nokia won 12 new GSM infrastructure and 14 new fixed switching customers.
`Nokia’s market share in GSM rose to close to 30%, and Nokia became the
`largest base station supplier in Europe.
`
`(cid:1) Nokia introduced the world’s first digital satellite receiver with a Common Interface,
`the Nokia Mediamaster 9600 S.
`
`(cid:1) Nokia introduced 31 new mobile phone models including the new generation
`product family, the Nokia 6100 series.
`
`(cid:1) Nokia expanded its global R&D and established new units in China, Denmark,
`Japan, Malaysia and Sweden.
`
`(cid:1) Nokia signed a contract for the delivery of the first operating TETRA digital
`radio network. Nokia also signed a contract for the delivery of the world’s first
`nationwide digital trunked TETRA network for authorities.
`
`(cid:1) Nokia introduced a new range of monitors, including its first flat panel display,
`the Nokia 300Xa.
`
`(cid:1) Nokia introduced the new Nokia 9000i Communicator with enhanced software
`features. The product is now also available for GSM 1900 in the Americas.
`
`(cid:1) Nokia strengthened its IP (Internet Protocol) networking competence by acquiring
`Ipsilon Networks, Inc.
`
`(cid:1) Nokia enlarged its corporate bonus plans and introduced a Nokia Connecting
`People Global Bonus Plan, tied to the company’s earnings per share development.
`
`Net sales by market area
`
`Net sales by business group
`
`Other countries
`3% (3%)
`
`Finland
`5% (1996: 6%)
`
`Other operations
`14% (13%)
`
`Nokia Telecommunications
`35% (1996: 33%)
`
`Asia-Pacific
`23% (22%)
`
`Americas
`18% (16%)
`
`Other
`European
`countries
`51% (53%)
`
`Nokia Mobile
`Phones
`51% (54%)
`
`Net sales in 1997 totaled MFIM 52 612.
`
`2
`
`Twitter-Google Exhibit 1061
`Page 4 of 83
`
`

`

`Nokia
`Telecommunications
`Net sales, MFIM
`
`Nokia
`Mobile Phones
`Net sales, MFIM
`
`Other
`Operations
`Net sales, MFIM
`
`28000
`
`24000
`
`20000
`
`16000
`
`12000
`
`8000
`
`4000
`
`0
`
`93
`
`94
`
`95
`
`96
`
`97
`
`28000
`
`24000
`
`20000
`
`16000
`
`12000
`
`8000
`
`4000
`
`0
`
`93
`
`94
`
`95
`
`96
`
`97
`
`28000
`
`24000
`
`20000
`
`16000
`
`12000
`
`8000
`
`4000
`
`0
`
`93
`
`94
`
`95
`
`96
`
`97
`
`Key Data
`
`1997
`
`1996
`
`Change, %
`
`Net sales, FIM million
`Operating profit, FIM million
`Profit before taxes, FIM million
`Profit from continuing operations, FIM million
`
`52 612
`8 454
`8 371
`5 998
`
`Average number of shares (1 000 shares)
`Earnings per share, FIM
`Dividend per share, FIM
`
`283 282
`21.17
`7.50 *
`
`Return on capital employed, %
`Net debt to equity (gearing), %
`Research and development, FIM million
`Capital expenditure**, FIM million
`
`38.3
`-35
`4 560
`2 402
`
`39 321
`4 266
`3 898
`3 044
`
`283 561
`10.73
`3.50
`
`22.7
`-9
`3 514
`2 028
`
`+34
`+98
`+115
`+97
`
`+97
`+114
`
`+30
`+18
`
`1997
`
`Nokia Telecommunications
`Nokia Mobile Phones
`Other Operations
`Inter-business group eliminations
`
`Nokia Group
`
`Net sales
`MFIM
`
`Operating
`profit MFIM
`
`Personnel
`Dec. 31
`
`18 826
`27 643
`7 239
`-1 096
`
`52 612
`
`4 053
`3 837
`564
`
`17 168
`13 371
`6 108
`
`8 454
`
`36 647
`
`The key data above as well as the information given in the Review by the Board of Directors is based on
`financial statements according to International Accounting Standards, IAS, presented on pages 29–32.
`Calculation of key ratios is explained on page 61.
`Board’s proposal.
`Excl. acquisitions and R&D capitalization.
`
`*
`**
`
`1 FIM =
`
`Currency rates at year-end 1997
`0.187
`0.112
`1.443
`0.331
`1.108
`24.056
`0.167
`
`USD
`GBP
`SEK
`DEM
`FRF
`JPY
`XEU
`
`1996
`
`0.215
`0.129
`1.476
`0.335
`1.133
`24.618
`0.174
`
`3
`
`Twitter-Google Exhibit 1061
`Page 5 of 83
`
`

`

`Nokia Group
`
`Nokia Telecommunications
`President Matti Alahuhta
`
`Nokia Telecommunications develops and manufactures infrastructure equip-
`ment and systems for mobile and fixed networks. Nokia is the world’s second
`largest supplier of GSM networks and a market leader in mobile data infra-
`structure. In addition, it is a significant supplier of advanced transmission and
`switching solutions.
`Nokia Telecommunications offers switching systems, access solutions, net-
`work management and IP (Internet Protocol) networking, as well as Intelligent
`Network (IN) solutions for telecom operators for both mobile and fixed networks.
`The global Customer Services network makes Nokia a full service house.
`Nokia Telecommunications has research and development activities in
`Finland, Australia, Denmark, Germany, Japan, Malaysia, Sweden, the UK and
`the U.S. Production is conducted in Finland, China, the UK and the U.S. Nokia
`Telecommunications has 17 200 employees.
`
`Nokia Mobile Phones
`President Pekka Ala-Pietilä
`
`Nokia Mobile Phones is the world’s second largest mobile phone manufacturer
`with the leading position in Europe and the number two position in the U.S. In
`digital phones and pioneering wireless data products, Nokia is a global leader.
`Nokia’s handset product offering covers all major digital and analog standards in
`130 countries worldwide.
`Development of new technologies and product families is a global effort.
`Research and development of Nokia’s cellular phones is conducted at 11
`research centers in seven countries: Finland, Australia, Denmark, Germany,
`Japan, the UK and the U.S.
`Product specification, marketing and production are conducted on a
`regional basis: in Europe, the Americas, Asia-Pacific and Japan. Nokia’s hand-
`sets and accessories are manufactured in eight factories in seven countries:
`Finland, Brazil, China, Germany, Mexico, South Korea and the U.S. Nokia
`Mobile Phones employs 13 400 people.
`
`Net sales by market area 1997
`
`4
`
`5
`
`1
`
`Nokia Telecommunications
`
`1. Finland
`2. Other European
`countries
`3. Americas
`4. Asia-Pacific
`5. Other countries
`
`3
`
`2
`
`4
`
`5
`
`1
`
`Nokia Mobile Phones
`
`1. Finland
`2. Other European
`countries
`3. Americas
`4. Asia-Pacific
`5. Other countries
`
`3
`
`2
`
`7%
`
`53%
`4%
`35%
`1%
`
`3%
`
`44%
`28%
`20%
`5%
`
`4
`
`Twitter-Google Exhibit 1061
`Page 6 of 83
`
`

`

`B usiness Group Data
`
`Nokia Telecommunications
`
`1997
`
`1996 Change
`
`18 826
`Net sales
`4 053
`Operating profit
`2 556
`R&D investments
`Personnel Dec. 31 17 168
`
`13 333
`2 982
`1 926
`13 475
`
`+41%
`+36%
`+33%
`+27%
`
`Nokia Mobile Phones
`
`1997
`
`1996 Change
`
`27 643
`Net sales
`3 837
`Operating profit
`1 714
`R&D investments
`Personnel Dec. 31 13 371
`
`21 579
`1 431
`1 376
`11 329
`
`+28%
`+168%
`+25%
`+18%
`
`Other Operations *
`
`1997
`
`1996 Change
`
`Net sales
`Operating profit
`Personnel Dec. 31
`
`7 239
`564
`6 108
`
`5 197
`-147
`6 919
`
`+39%
`+484%
`-12%
`
`* Nokia Multimedia Network Terminals
`Nokia Industrial Electronics
`Nokia Research Center
`General Group Functions
`
`Nokia Multimedia Network Terminals
`President Heikki Koskinen
`
`Nokia Multimedia Network Terminals is a pioneer in digital satellite, cable and
`terrestrial network terminals for interactive multimedia applications. Distribution
`of broadband digital video, audio and data services, including television and
`interactive services, form the basis for product development.
`Nokia Multimedia Network Terminals operates in a global market, and col-
`laborates closely with program and content providers to offer consumers
`attractive products and services. The division employs 800 people worldwide.
`Production is located in Sweden, with Product Development centers in Finland,
`Germany and Sweden. Sales offices are established in all major markets in
`Europe as well as in Asia-Pacific and the Americas.
`
`Nokia Industrial Electronics
`President Hannu Suominen
`
`Nokia Industrial Electronics develops and manufactures computer and work-
`station monitors, including applications for professional desktop communica-
`tion and new technology displays. Nokia is a leading professional computer and
`workstation display manufacturer in Europe. The company’s displays are known
`for their outstanding picture quality, ergonomic design and user-friendliness.
`Nokia Industrial Electronics also produces battery chargers for mobile
`phones, as well as other power supply applications for mobile communication.
`Nokia is strongly positioned in volume production of chargers, following the
`growth in the mobile phone market. Additionally, Nokia manufactures advanced
`RF filters and antennas for wireless communication.
`Nokia Industrial Electronics has production facilities in Finland, Hungary and
`Sweden, and research & development activities in Finland and Sweden. The
`division has 4 100 employees.
`
`Nokia Research Center
`Senior Vice President, Research Juhani Kuusi
`
`Nokia Research Center is the corporate research unit interacting closely with all
`Nokia business units. Its goal is to enhance the Group’s technological compet-
`itiveness. The center covers the full range of activities from exploration of new
`technologies and product/system concepts to their exploitation in actual prod-
`uct development in the business units.
`To keep up to date with the latest technological developments and to influ-
`ence them, the center maintains strong global contacts. It actively participates
`in various international R&D projects in cooperation with universities, research
`institutes and other telecommunications companies. Additionally, the center
`supports Nokia’s active involvement in the work of global standardization bod-
`ies to further develop and define standards in telecommunications.
`Nokia Research Center’s technology areas are wireless and wireline
`telecommunications, audio-visual signal processing, software technology and
`electronics. Its main focuses include GSM enhancement and third generation
`mobile technology, broadband communications, as well as multimedia.
`The center’s 700 employees work in Finland, Germany, Hungary, Japan and
`the U.S.
`
`5
`
`Twitter-Google Exhibit 1061
`Page 7 of 83
`
`

`

`Review by the President and CEO
`
`To our shareholders
`
`Customer satisfaction, Respect for the individual,
`
`It is with great satisfaction that I summarize the results of Nokia’s operations in 1997.
`Measured by all indicators, we were able to achieve and even exceed our set targets.
`Once again, our annual results set a number of new all-time records.
`Nokia’s net sales grew by 34 per cent, to FIM 52.6 billion and our operating profit
`almost doubled. In operating profit margin, we reached the industry-high level of 16.1
`per cent, compared to 10.8 per cent in 1996. Earnings per share increased by 97 per
`cent to FIM 21.17, and our financial position is now stronger than ever. We generated
`a positive cash flow from operations of FIM 10.2 billion and our return on capital
`employed increased to 38.3 per cent.
`These are impressive figures and we have every reason to be satisfied. The results
`of our activities in 1997 were especially strong as we did not make any compromises
`in the important investments in research and development, building our already strong
`skills, and promoting the visibility and
`awareness of the Nokia brand. In all of
`the above mentioned areas, we were
`able to gain valuable benefits of the
`critical mass achieved so far.
`In 1997, a total of 59 per cent of
`our sales originated from Europe, 23
`per cent from the Asia-Pacific region
`and 18 per cent from the Americas. In
`terms of sales, China became our third
`largest market after the US and the UK.
`We set our targets high for 1997.
`Nevertheless, as a result of strengthening our market position, increasing efficiencies,
`volume in production and logistics, growing competence and quality of our overall
`operations, we clearly demonstrated our ability to reach the targets and even surpass
`them in many areas.
`At the same time, we can state that 1997 was Nokia’s first year as a 100 per cent
`dedicated telecommunications company. The completion of the structural
`change has allowed us to focus increasingly on our mode of operations,
`bringing new efficiencies to the surface.
`
`Achievement and
`
`C O N T I N U O U S learning
`
`Paradigm shift in telecommunications
`The past year was marked by a number of highlights and breakthroughs
`for Nokia, paving the way for years to come. One emphasis was
`preparatory work and research in the area of next generation wireless
`standards. Towards the end of the year, it became clear that the third
`wireless generation would largely be based on the work we have
`conducted in our own research laboratories and in cooperation with
`other telecommunications companies.
`Built on the core GSM network, the Wideband Code Division
`Multiple Access (WCDMA) solution has been selected for the
`future wireless systems. We are glad that this technology solution
`took big and positive steps with our strong contribution in 1997
`and we anticipate rapid development in upcoming years. Techni-
`cally solid, it will allow operators, manufacturers and, above all,
`users a smooth migratory path into a world of new possibilities.
`Many of today’s services will be further improved in the future net-
`works, resulting in economical, fast and personalized solutions.
`Another highlight is the emergence of data in all areas of
`telecommunications. The inclusion of Internet Protocol based
`services into public networks will change the nature of communi-
`cations, both in fixed networks, as well as on the wireless side.
`Fixed and wireless worlds will merge, leaving only a thin line sep-
`arating the two. Tomorrow’s customers will want to be able to use
`services independently of time, place and technology of access.
`In line with the previously mentioned trends, basic voice com-
`munication is very rapidly becoming wireless. In Finland and
`
`6
`
`Twitter-Google Exhibit 1061
`Page 8 of 83
`
`

`

`Scandinavia, overall mobile penetration has already increased to more than 40 per
`cent, and an overwhelming majority of new telephone subscribers worldwide are
`choosing mobile communications as the preferred way to communicate. Our strong
`global market share of over 21 per cent in mobile phones, and our broad presence in
`all of the world’s main markets brings us to the forefront of this development.
`Increasingly, we have also seen the importance of the visibility of the Nokia brand.
`For several years, we have together with our distributors and other partners invested
`in building firm awareness for Nokia as a leading brand in communications. The
`achieved results have been crucial in helping us to secure our current solid position.
`We started our brand building early in the nineties on a large scale in Europe,
`where we are now the undisputed leader as a preferred brand in mobile communica-
`tions. During the past few years, we have been very pleased to achieve similar results
`in many parts of Asia, and in the Americas, which is where global brands are finalized.
`It is our strong ambition to set our targets even higher to emerge as an industry-lead-
`ing brand in the future as well. We will continue to strive to meet this goal.
`With our leadership in many new areas of telecommunications, as well as our
`increased global presence and visibility, we have a solid base to move forward and
`face future challenges. As we experience the shift toward 3rd generation wireless
`communications, and the inclusion of Internet Protocol based services into public net-
`works, we are confident that we are very well prepared for both.
`Being well prepared does not allow time for standing still, and our targets for
`growth and profitability will remain high. To maintain our success in the future, we will
`continue to improve our competitiveness in our present businesses. At the same time,
`we will put forth a special effort to be early in identifying, creating and entering new
`opportunities in mobile, fixed and data communication.
`Based on the paradigms mentioned above, which are the core drivers, we intend
`to grow parallel with or even faster than the industry in the most attractive segments
`of telecommunications. We aim for growth, and with that growth we are able to lay the
`groundwork for continued profitability in the high technology environment we operate
`in. But growth is also a source of inspiration and a contributor to dynamic change. As
`such, it is powerful for any organization.
`
`Shareholder value through customer care
`and dedicated personnel
`The ultimate goal for any company’s existence is to generate value for its sharehold-
`ers. In today’s open and global world, where active interaction with the environment is
`the essential requirement for success, improvement in shareholder value stems from
`customer care and dedicated personnel.
`Together, they enable us to operate efficiently to provide the highest possible
`long-term return to our shareholders. Solid proof of how we have been able to
`fulfill this task is the 46 per cent share value increase in 1997, as well as the
`proposed highest-ever dividend of FIM 7.50 to be paid for the year.
`Customer orientation and focusing on competitive solutions are of utmost
`importance on our list of top priorities. We have taken major steps to main-
`tain and increase our responsiveness, as well as our ability to foresee changes
`and be the first company to offer competitive solutions and products to our
`customers again in 1998.
`Without motivated and committed personnel and a strong corporate cul-
`ture, Nokia could not have reached as high as we did last year. Our culture is
`firmly based on our four core values: Customer satisfaction, Respect for the
`individual, Achievement and Continuous learning. With pleasure, I have
`observed a lot of progress in living up to these common values. They have
`increasingly become part of our everyday work environment. We certainly did
`not create the values for use in speeches and campaigns only; they were
`formed with the intention of being used as a way of working life.
`High results require hard work. We have improved in all business areas
`and with the results achieved in 1997, I wish to extend my sincere thanks to
`the entire personnel of Nokia, all 36 647 people, for making this such an out-
`standing year.
`Maintaining similar high ambition, we face the future with confidence.
`
`Jorma Ollila
`
`7
`
`Twitter-Google Exhibit 1061
`Page 9 of 83
`
`

`

`Review of Operations
`
`Nokia is a leading international telecommunications company focused on the
`fast growing segments in the industry. The Group strives to develop and deliver
`innovative products and total systems solutions. The company’s core
`businesses include supplying mobile and fixed networks to telecommunications
`operators and dedicated networks to authorities and public utilities, and
`developing, manufacturing and marketing mobile phones to all major digital and
`analog standards worldwide. Additionally, Nokia manufactures monitors and
`multimedia terminals.
`
`Nokia continues to excel in infrastructure business
`Nokia is the world’s second largest supplier of GSM networks and a significant sup-
`plier of fixed networks for voice and data. As a broad-scope telecommunications com-
`pany, Nokia delivers infrastructure equipment and systems to meet the diverse needs
`of telecom operators worldwide. It provides switching platforms, fixed and radio
`access solutions, wireless data, network management and Intelligent Network (IN)
`solutions for mobile and fixed networks, as well as related customer services.
`With deregulation rapidly evolving and being one of the key drivers reshaping the
`telecommunications industry, the market is becoming increasingly open and competi-
`tion is more intense. Telecommunications operators must differentiate and expand
`their service offerings to remain competitive.
`As a result, Nokia has grown significantly in several business segments, expand-
`ed into new markets and strengthened its position globally in 1997. Nokia has gained
`market share, especially in Europe and Asia-Pacific, by developing high-quality sys-
`tems and products designed for the most competitive environments. The telecommu-
`nications equipment market has experienced growth of 10–12 per cent. Nokia’s mar-
`ket share development in this market has been strong in many segments, with the 58
`per cent increase in order inflow in 1997 being even higher than the 41 per cent
`increase in sales.
`In line with the company’s global expansion, Nokia Telecommunications invested
`in strengthening its global network of research and development units in several coun-
`tries, including Denmark, Japan and Sweden. In addition, Nokia expanded its existing
`R&D sites in Australia, Finland, Germany, the UK and the U.S.
`
`Breaking records in wireless network development
`As GSM operators continue to establish new networks and increase capacity and cov-
`erage with network expansions, the GSM infrastructure market grew by 20–25% in
`1997. At the end of the year, Nokia had supplied GSM networks to 65 operators in 34
`countries. Nokia’s market share in GSM rose to close to 30 per cent.
`Nokia holds the world number one position in GSM 1800 networks. With more
`than 30 GSM 1800 networks established by the end of 1997, Nokia is a network sup-
`plier to 19 of these. Eight new milestone agreements signed with, among others,
`Mobilix, Denmark, Telia Finland, Connect Austria and VIAG Interkom in Germany for
`the supply of GSM 1800 networks contributed to this significant growth. In addition to
`its leading position as a GSM 1800 system supplier, Nokia became the leading base
`station supplier in Europe.
`Nokia improved its position in southern Europe by signing major expansion agree-
`ments with Omnitel Pronto Italia, one of the fastest growing European GSM operators.
`In addition, Nokia signed a large expansion agreement with Orange in the UK and won
`its largest order to date in China, with Fujian PTA.
`Nokia also enjoyed significant progress in
`Australia, Malaysia, New Zealand, the Philip-
`pines, Singapore and Thailand.
`The Nokia DX 200 GSM switch has proven
`its competitiveness and ability to flexibly meet
`increasing capacity needs in mobile networks.
`This GSM switch already handles 150,000 sub-
`scribers in live networks and will continue to
`reach even higher capacities. ”Our success in
`
`Nokia’s 10 Major
`Markets 1997
`Net sales, MFIM
`
`8000
`
`6000
`
`4000
`
`2000
`
`0
`
`Denmark
`Australia
`Sweden
`France
`Italy
`Finland
`Germany
`China
`UK
`USA
`
`New GSM
`CUSTOMERS
`1997
`
`• Centertel, Poland
`• Connect Austria
`• Cosmote, Greece
`• Digital Phone Company,
`Thailand
`• Mobilix, Denmark
`• Mobilkom Austria
`• Shanghai PTA, China
`• Telia Finland
`• Telkomsel, Indonesia
`• Telsim, Turkey
`• VIAG Interkom, Germany
`• Wireless Alliance, USA
`
`8
`
`Twitter-Google Exhibit 1061
`Page 10 of 83
`
`

`

`Nokia’s DX 200 digital switch has proven its adaptability in some of the world’s leading mobile and fixed networks. More than 100 operators have
`implemented this highly flexible technology platform in their networks. A true future-proof platform for both mobile and fixed needs.
`
`GSM is due to a number of factors,” states Matti Alahuhta, President, Nokia Telecom-
`munications. ”We have understood the market needs and have concentrated on
`developing solutions to increase operators’ competitiveness, by increasing value-
`added through new services and by simultaneously increasing capacity and coverage
`to the lowest possible lifetime cost. The high-quality, high-performance Nokia base
`station system, for example, includes the Intelligent Underlay-Overlay feature which
`can significantly increase capacity and quality in the GSM network.”
`In 1997, Nokia’s growth in Professional Mobile Radio (PMR) systems was very pos-
`itive. In addition to maintaining a strong position in analog trunking networks, Nokia
`won the first four digital Terrestrial Trunked Radio (TETRA) system customers this year.
`In January, Nokia published a contract for the delivery of the world’s first operative
`TETRA network to the Helsinki City Energy Company. Nokia also delivered TETRA sys-
`tems to TeleDanmark, to be used by the Dutch Police for testing, and ElTele Øst, Nor-
`way. In Britain, Nokia is participating in the Quadrant Consortium, which is designing
`and planning the new digital radio service to be used by the entire country’s emer-
`gency services. Most recently, Nokia signed an agreement with the Finnish Ministry of
`the Interior for the world’s first nation-wide TETRA contract. The network is a shared
`system and will provide services for the police, emergency and rescue services, the
`
`New
`Infrastructure
`Products LAUNCHED
`in 1997
`
`• The Nokia Artus wireless
`data product family
`• The Nokia SYNFONET
`Access Node
`• The Nokia SYNFONET
`STM-16 Node
`• The world’s first GSM Dual
`Band Base station
`• The Nokia Booster Site for
`GSM networks
`• The Nokia Easywave Access,
`Wireless Local Loop solution
`• The Nokia TETRA mobile
`radio system
`
`9
`
`Twitter-Google Exhibit 1061
`Page 11 of 83
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`

`

`Frontier Guard and other government users throughout Finland. These organizations
`will use Nokia’s TETRA system to improve speech and data communication and utilize
`new services provided by this technology.
`
`Integrated Services – the next step
`Deregulation and rapid technological development are reshaping the telecommunica-
`tions markets in a favorable way for consumers and creating new opportunities for
`operators. Mobile, fixed and data services, which traditionally have been offered sep-
`arately, can now be served by a single operator in packages best suited to specific
`customer needs. This ability to offer one-stop services creates many attractive new
`opportunities for both existing and new operators. ”We estimate that this integration
`of fixed and mobile voice/data services will be one of the strong development trends
`in the coming years. For this market need, Nokia has a range of solutions, including
`the highly flexible Nokia DX 200 switching platform and Intelligent Networks. They
`enable the flexible use of both fixed and mobile technologies in the most suitable way
`for an individual operator’s business needs,” comments Matti Alahuhta. ”Therefore,
`Nokia is well positioned as a strategic partner for those operators moving into the new
`age of telecommunications.”
`
`Increased demand in Intelligent Networks
`Another development is the operators’ need to offer value-added services to create
`new revenues. In 1997, this has led to favorable growth for Nokia in the area of Intel-
`ligent Network systems (IN), which enable fast, cost-effective and safe deployment of
`innovative services in both fixed and mobile networks. Nokia’s competitiveness in this
`area is reflected by the three-fold increase in sales of Nokia’s IN systems.
`With the continuous growth and increasing complexity of today’s networks, effec-
`tive network management is becoming more essential. The significant sales growth of
`Nokia’s Network Management Systems in 1997 demonstrates our capability to meet
`the requirements for the total management of large telecommunications networks.
`The Nokia Customer Service operations also enjoyed significant growth during
`1997, increasing personnel to 3,000 worldwide. ”Nokia’s capabilities as a broad-
`scope supplier are enhanced by our global Customer Service organization,” states
`Matti Alahuhta. ”With such an extensive global team, we can offer customer services
`for all stages of an operator’s business, from network planning, right through to net-
`work operation and personnel training.”
`
`With Nokia’s fixed
`network solutions, the
`exciting opportunities of
`broadband networks
`become available to
`everybody. With Nokia
`technology, operators can
`create new and appealing
`services.
`
`Nokia won the first four digital
`TETRA system customers in 1997,
`including t he world’s first nationwide
`public safety and security system for
`the Finnish Ministry of the Interior.
`ElTele Øst, Norway and the Dutch
`Police among others, rely upon this
`world-leading t echnology for their
`professional mobile radio networks.
`
`10
`
`Twitter-Google Exhibit 1061
`Page 12 of 83
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`

`

`Moving ahead in fixed networks
`Nokia has thrived in the deregulated fixed network market. The fixed access market grew
`as operators continued to invest in building their networks. In line with deregulation,
`many of Nokia’s GSM system customers are expanding into fixed network services.
`Strongly supporting open standards, Nokia is a market shaper in introducing open
`interfaces into fixed networks. Nokia is a leader in introducing the V5.1 open interface
`standard between the access network and the switch. Implementation of the V5 stan-
`dard enables operators to implement vendor-independent access network solutions
`for basic telephony, ISDN (Integrated Services Digital Network) and semi-permanent
`leased lines. Operators are already seeing the cost benefits from the new open access
`V5 networks in Europe and Asia-Pacific.
`Sales of Nokia’s SDH (Synchronous Digital Hierarchy) transmission system, Syn-
`fonet, steadily increased this year. The number of Nokia’s SDH customers increased
`to 73 in over 20 countries. In 1997, Nokia complemented its SDH family by introduc-
`ing the highly integrated Synfonet STM-16 and Synfonet Access Node (SAN). ”We are
`great believers in optical transmission also in the access network with optical lines
`being built closer and closer to the individual customers,” comments Mr. Alahuhta.
`
`Nokia well positioned for changes in data communications
`”Data traffic is now increasing rapidly in both fixed and mobile networks,” explains
`Matti Alahuhta. ”We can clearly see a future of Internet-based technologies which are
`crossing all service operators’ network boundaries. This is evident from the growth in
`fixed data communications networks and the development towards higher bandwidth
`services utilising faster data transmission speeds such as GPRS (General Packet
`Radio Service) on the mobile side.”
`The massive increase in Internet subscribers has already resulted in sales of ISDN
`rising and will soon be followed by the emergence of broadband services. Nokia is
`strongly focused on ADSL (Asymmetric Digital Subscriber Line) and VDSL (Very High
`Speed Digital Subscriber Line) transmission, ATM (Asynchronous Transfer Mode) mul-
`tiplexing and IP (Internet Protocol) processing in access nodes. In December, Nokia
`also acquired Ipsilon Networks, Inc. This U.S.-based data communications company
`has extensive IP-routing capabilities that further strengthen Nokia’s competitiveness in
`this area.
`During 1997, Nokia again established itself as a market shaper in wireless data
`with the introduction of the Nokia Artus product family. These products enable opera-
`tors to provide fast and easy Internet access to mobile users, via their mobile termi-
`nals.
`
`More than 200 million GSM users in 2000
`Growth of the GSM market is extremely encouraging. It is estimated that there will be
`more than 200 million global GSM users in the year 2000, clearly indicating that voice
`is going wireless. In response to this tremendous growth, Nokia is investing strongly in
`the development of new services, products and innovative radio access solutions that
`will reduce the cost of GSM infrastructure.
`Nokia will continue to further develop the strengths of GSM as migration towards
`the third generation accelerat