Nokia reported mixed results for the third quarter of 2024 but is optimistic about signs of a slow recovery from the telecom industry's pull-back on network-related investments.

CEO Pekka Lundmark said during the quarterly call: "The market is turning, but it's turning slowly. We see encouraging signs of market recovery in Fixed Networks and IP Networks, but even if it is a bit slower than we expected earlier this year, and Optical Networks and Mobile Networks remain weaker."

Here are the top takeaways from Nokia's Q3 2024 call with investors.

Segment results were quite mixed in Q3 2024. The company reported net sales down 8%, or 7% excluding currency impacts. Nokia saw 9% growth in its Network Infrastructure (NI) segment and 6% in IP Networks, but a 17% decline in Mobile Networks (mostly due to the ongoing pullback in India) and Optical Networks, which was down 15% year-on-year. The NI segment's return to growth comes after five quarters of declines.

Nokia Technologies, which includes the company's licensing business as well as its digital health and digital media operations, saw net sales up 36%, which was due to smartphone licensing agreements signed earlier this year as well as higher sales from automotive and IoT. CFO Marco Wirén said that Nokia had also signed deals for two video streaming companies to use Nokia tech, which he said was "an important step for us in this new growth area."

Nokia continues to pursue diversification beyond telecom. Along those lines, Lundmark noted that Nokia is "making progress expanding to non-CSP customers" and increasing its investments outside of serving telco customers. That includes the data center space, defense and private wireless.

"Data centers will be our number one growth target for the coming years," Lundmark declared. "There will be others as well, but that will be the number one." He also said that Nokia has nearly 800 private wireless customers, reflecting "fast growth" and that it is also focusing on the defense market -- which has long sales cycles, he acknowledged, but "once you are in, you are in and you are in for a long term."

The BEAD opportunity is getting closer. Lundmark also sees a "significant opportunity" for Nokia's Fixed Networks business as more homes get connected with fiber. "Operators around the globe continue to show a strong appetite to drive fiber connectivity higher. There are also significant government programs starting to take effect," he said.

Lundmark said that Nokia expects to realize some of its first revenue under the Broadband Equity, Access and Deployment (BEAD) program in the fourth quarter of this year. "The program has taken time to build momentum but this is now starting to move fast," Lundmark said. He told analysts that it looks like Louisiana will be the first U.S. state to release BEAD funds -- which is the point at which the long-awaited funding might actually translate to orders. BEAD, Lundmark said, "will be a story of '25 and '26."

Nokia's API play. Asked about Nokia's response to Ericsson's positioning of itself in the API space by purchasing Vonage, Lundmark responded that Nokia had developed its approach in-house. "We came to a conclusion that we do not need to acquire a legacy best player to enter this market," he said. Nokia said that it has more than 20 API partners including 16 CSPs. "We are able to offer [an] extremely attractive base of networks to the developers who want to use our APIs," Lundmark said.

However, he warned: "It will take quite a long time before revenues through APIs will be a meaningful business. We are talking multiple years." And the evolution of the core network to one that is cloud-native, with efficiently automated network functions, is more important for Nokia's current business, he said. "This is not only about introducing APIs. This is very much a comprehensive strategy as to what to do to the entire core network to make the resources available to the ecosystem," Lundmark concluded.