Just about a year ago, Nokia announced at its Capital Markets Day the initiation of a business portfolio adjustment, listing the Enterprise Campus Edge (ECE) as a non-core business and planning to determine its future direction by 2026. This decision immediately raised questions in the market about Nokia's private 5G strategy: Was Nokia paving the way for the sale of ECE, or even preparing to exit a market it had deep cultivation ed for years?

In response to external doubts, Nokia quickly responded, emphasizing that its “leadership position and commitment” in the private 5G market remained unchanged and that it would continue to provide relevant solutions for mission-critical enterprises. Subsequently, Nokia continued to advance its private wireless network and industrial edge businesses, including collaborative projects in mining, utilities, and other fields.

Now, a year later, rumors have become reality—on October 13, Nokia announced that it had signed an agreement with Munich-based private equity firm AURELIUS to sell the ECE business. The transaction is expected to be completed in the first half of 2027, subject to the satisfaction of relevant closing conditions.

ECE is the primary carrier of Nokia's private network business, with annual sales exceeding €170 million and employing approximately 1,000 people, primarily operating in 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 ECE's core network system (DAC) and edge computing products (MXIE) sold to enterprise customers. Through this transaction, AURELIUS will take over one of the largest and most mature Industrial 4.0 customer bases in the private network sector.

It is important to note 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, meaning Nokia is not entirely exiting the private 4G/5G network market. However, we cannot help but wonder: Why did this Finnish giant, which once established a significant position in the private wireless network market through its communication technology, industrial customers, and first-mover advantage, ultimately choose to abandon its enterprise campus private network business? Is this a proactive contraction of non-core assets by Nokia, or a signal that large communication equipment vendors are redefining competitive boundaries in the industrial digitalization market?

Revisiting Nokia's Private Network Development History

The history of Nokia's private network business can be traced back to 2017.

At that time, Nokia announced the expansion of its wireless access and core network technologies for enterprise digital transformation, with products covering small cells, Wi-Fi, multi-access edge computing (MEC), and cloud-based packet core networks. Enterprises could manage their networks independently or obtain relevant services through operators. This reflected Nokia's recognition at the time that industrial enterprises needed not just public mobile network coverage but dedicated networks capable of meeting the security, reliability, low latency, and asset connectivity requirements of production sites.

Subsequently, Nokia continued to explore service-oriented private network solutions through DAC (Digital Automation Cloud). DAC was not just a combination of wireless network equipment but also integrated connectivity, cloud management, and industrial application capabilities into a unified platform. In 2019, Nokia announced that it had signed wireless private network agreements with more than 120 companies across various industries and sectors, including 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 emphasized a compact and convenient deployment experience, while the latter targeted enterprises with higher customization needs. This marked Nokia's move to promote the application of 5G private networks in industrial scenarios with a more complete commercial product portfolio.

In 2021, with the advancement of 5G R16, the global 5G private network market, represented by markets such as Germany, Japan, and South Korea, entered a phase of accelerated development. Official press releases indicated that Nokia had deployed 300 private networks by 2021, further demonstrating that its service-oriented 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 introducing solutions more suitable for small and medium-sized enterprises.

Until just before the announcement of the sale of ECE, the company was continuously advancing its private network-related businesses.

Thanks to years of accumulation, Nokia can be said to have achieved a world-leading position in this field. According to third-party market research data, Nokia captured approximately 28% of the global private network wireless access network sales and 22% of the private network core network sales. The ECE department plays a pivotal role in Nokia's private network landscape, covering about 90% of Nokia's wireless private network customer base. Currently, Nokia has approximately 1,000 private network customers worldwide, with the ECE department serving nearly 900 global enterprise customers, including several Fortune 500 companies.

Precisely because of this, the sale has sparked widespread discussion in the industry.

The general assessment of most independent analysts is that Nokia's decision appears, at best, ruthless and, at worst, baffling, and may carry a distinct short-termist tendency .

Asad Khan, Research Director at SNS Telecom & Research, stated in an interview with RCR Wireless that given the recent momentum of larger-scale, multi-site private 5G projects in the campus network sector, Nokia's decision was “indeed surprising.” He believes that from a short-term profitability perspective, this move “might make sense”; however, considering the market's direction and the more than a decade of effort Nokia invested in building the ECE business unit, the decision is “much harder to understand.”

Short-Sighted Strategy or Streamlining for Success?

The industry had previously widely predicted that the ECE business would be acquired by an industry consultancy or system integrator. According to RCR Wireless, some industrial suppliers had reviewed the business's books but ultimately backed out due to its licensing arrangements. As the sale process dragged on, private equity investment seemed to become the better option.

As the acquirer, AURELIUS is a global private equity firm known for its excellent operational 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 specializes in handling projects with operational improvement potential, such as business divestitures, platform building or succession solutions, and customized financing schemes.

To date, AURELIUS has completed over 300 transactions and currently owns 49 portfolio companies—including UK tech distributor Exertis (acquired in 2025), Swiss electronics distributor Distrelec (acquired in 2023), and UK pharmaceutical distributor AAH Pharmaceuticals (acquired in 2021). Its investment portfolio also covers industrial manufacturing, mobility services, software, and business services. These business layouts indicate 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 innovative capabilities to drive business growth—relying on Nokia for communications and Bell Labs for computing. After separating from these resources, how will ECE maintain its pace of technological progress? The private 4G/5G market is developing rapidly, and enterprises need to continuously increase innovation efforts, explore new applications and use cases, and further enhance the value of their products and solutions. The question is whether AURELIUS views ECE as an industrial network company that can develop independently and be sold again in the future or merely as an asset whose value can be enhanced after being spun off from Nokia.

Even if ECE is treated as an independently operating innovation unit creating value for the industrial edge sector, it should still be significant. ECE already has 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 Industrial 4.0 field: truly entering industrial production and operation scenarios and gaining a foothold in actual industrial processes. However, occupying a favorable position in a market does not necessarily mean that the business has a strong strategic fit with the parent company. What truly needs to be tested is whether the private equity ownership model can sustain and continue the innovative capabilities that Nokia previously provided through its own resources.

While 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, these two businesses, when combined, still contributed €66 million in revenue but diluted profits by approximately €13 million.

With the sale of the FWA business to Inseego and the ECE business to AURELIUS, Nokia has rid itself of two underperforming “business portfolio” units. As a result, the Finnish company's focus has simplified to two “super-cycle” businesses: “Mobile Infrastructure” (MI, selling cellular networks to telecom operators) and Network Infrastructure (NI, selling fiber to anyone who needs it, including AI and cloud computing companies with urgent fiber needs and deep pockets).

James Moar of Kelido Intelligence commented, “Nokia's decision to exit a market it helped create may be related to scale effects. Although Nokia dominates the private network market, each individual network project is relatively small in scale and often requires detailed and complex system integration for successful implementation. Notably, Nokia still retains its private network business for mission-critical enterprises, which typically involve transportation, energy, and other wide-area applications with larger deployment scales.”

“Nokia is not necessarily entirely abandoning the private network market—although the decision to sell ECE can easily be interpreted as such—but it also reflects its preference for business scale. Nokia has invested significant effort in understanding the private cellular network market, but it will still provide relevant capabilities, albeit with a preference for serving larger-scale, more profit-margin-aligned projects. Such businesses are also closer to Nokia's traditional Radio Access Network (RAN) market.”

Leo Gergs of ABI Research stated, “ECE once claimed about a 50% share in the private LTE/5G market. However, campus network project contracts typically amount to only about $1 million, with approximately 70% of projects completed through channels. Although Nokia led this market, it never truly mastered customer relationships. For Nokia, this is the right decision to refocus on its identity as a technology company and allocate resources to large, long-term projects in energy, transportation, and public safety, where carrier-grade core networks, wireless equipment, and transmission networks can truly make a difference.”

Final Thoughts

The growth prospects of the private cellular network market may be the most intriguing 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 $2.8 billion in 2026 and is expected to grow to $6.6 billion by the end of 2029. Currently, private cellular networks account for just over 7% of total global cellular network infrastructure spending, a proportion that could reach one-third by the mid-2030s.

Of course, market forecasts do not equate to reality. The transition of industrial 5G from concept validation to large-scale deployment still faces multiple challenges, including return on investment, system integration, operational complexity, and enterprise digitalization capabilities. The market has also experienced significant hype. Nevertheless, 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 deserves more attention is whether market growth can translate into sufficient commercial returns for enterprises. For Nokia, entrusting the campus private network business to a new owner may represent a reallocation of resources and a strategic focus adjustment. For AURELIUS, taking over this business with a mature customer base means gaining an opportunity to continue exploring the industrial digitalization market.

However, the next phase of competition in private 5G is just beginning...

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, largely exits private network business——C114

“Nokia exits private 5G”? Why the rush to clarify——Miscellaneous Talks

Nokia sells a world leader——Telecom Industry Worker