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IP Networks & Applications

Creating Value Through Applications & Analytics

Bhaskar Gorti President, Applications & Analytics Our market is 1. More fragmented different from 2. Pure software play ’s 3. Multi-vendor, multi-network Networks 4. Different buyers businesses Portfolio drives new markets and reinvent old ones

Cloud Analytics IoT Security

Business Support Operation Support Service Delivery Systems Systems Platforms Foundation: Technology Depth & Innovation

#1 device #1 Centralized self Customer experience management organizing network management Strength

Multi-tenant, Cloud platform Automated quality and Most complete CEM product securely manages >1.5B performance management. set on the market. devices

OSS leadership NFV/SDN leadership Best innovation in IoT

Innovation in analytics, Nokia has most Standard-based device assurance and Cloud. comprehensive NFV/SDN management, security, and portfolio. analytics in platform.

Source in order: Analysis Mason 2015, IHS Technology, SON & Optimization Software Market Report 2016, Analysis Mason 2015, TBR NFV/SDN Telecom Market Landscape, First Calendar Quarter 2016, Broadband World Forum 2016 Show Award Market drivers: Worlds colliding to create an opportunity

Nokia

Network-Attached Software Players Market drivers: Worlds colliding to create an opportunity

Nokia Oracle Ericsson Amdocs Huawei Netcracker

Network-Attached Pure Software Software Players Players Market drivers: New Players Webscale Worlds colliding to Open Source create an opportunity Do It Yourself

Nokia Oracle Ericsson Amdocs Huawei Netcracker

Network-Attached Pure Software Software Players Players Market drivers: New Players Webscale Worlds colliding to Open Source create an opportunity Do It Yourself

Nokia Oracle Ericsson Amdocs Huawei Netcracker

Network-Attached Pure Software Software Players Players Market drivers: New Players Worlds colliding to Disruption create an opportunity Innovation

Nokia Agility Carrier-grade Speed Scale

Network-Attached Pure Software Software Players Players How do we move from a network-attached to a software business at scale? Building a software business at scale

1. Build software sales organization 2. Strengthen and expand portfolio 3. Diversify markets and business models Evolve Go-to-Market: software sales force and new operations commercial models

Services: efficient back and office, move to more SaaS organization and hosted offers Research & Development: Common Software Foundation reduces middleware costs by 60% and deliver value faster Nokia Future X A clear vision Digital Value Dynamic 7 ANP, CSP, ICP, 8 of how Platforms Vertical apps Data Security • New trust framework External data sources networks • Ecosystem sharing Augmented • Mass edge monitoring 6 Analytics Machine need to Cognition Systems learning Open APIs evolve Management & Programmable Dynamic Dynamic Multi- 5 customer Orchestration network operator Network OS services SDN NFV optimization federation

Universal Common data layer 4 Adaptive Core agnostic modular, decomposed converged core network functions

self-optimized Short coverage 3 Smart Network Fabric waves & capacity & wires Long fibers

Humans Massive Converged Access 1 2 Software & Machines Scale Access Edge Cloud defined, end-end Remote Applications & Analytics Primary investment domain Secondary investment domain

Business Group vision • Automating edge/telco Digital Value Dynamic 7 ANP, CSP, ICP, 8 cloud networks Platforms Vertical apps Data Security • New trust framework • Cognitive network External data sources operation • Ecosystem sharing • Mass edge monitoring • Terascale automated Augmented 6 Analytics Machine IoT/device management Cognition Systems learning contextual security Open APIs • Future enterprise Management & Programmable Dynamic Dynamic Multi- interactivity 5 customer Orchestration network operator Network OS services SDN NFV optimization federation

Current Portfolio Focus Universal Common data layer 4 5 6 7 8 Adaptive Core Access agnostic modular, decomposed converged core network functions • Cloud/NFV orchestration and operations self-optimized Short coverage 3 Smart Network Fabric waves • Any device management & capacity & wires Long • Novel Enterprise comms fibers • Augmented network + user analytics & security solutions Humans Massive Converged Access 1 2 Software & Machines Scale Access Edge Cloud defined, end-end Remote Diversify markets

Primary market

Communication Service Providers Diversify markets

Primary market Attractive adjacencies

Communication Over the Top Digital IoT Verticals Service Players Enterprises Providers 6.5% Applications & CAGR €16bn Analytics Primary market outlook €12bn

Primary market includes sales of BSS, OSS and SDP to Communication Service Providers 2016 2021

Source: Nokia estimate 15.8% CAGR Applications & €13bn Analytics Market outlook for attractive adjacencies €6bn

Adjacencies include emerging Cloud, Analytics, Security and IoT businesses and sales to Over-the-Top players, Digital Enterprises and IoT verticals. 2016 2021

Source: Nokia estimate Applications & Analytics : Higher returns through focused growth Required investments already factored into long-term Networks guidance

Disciplined expansion and diversification Strong long-term business model

Primary Attractive Net sales: market adjacencies Grow with the primary market

Long-term operating margin:

€12bn in 2016 €6bn in 2016 Expand to double digits 5 year CAGR 6.5% 5 year CAGR 15.8% Applications & Analytics Nokia will achieve the EUR 1.2 billion cost savings target

Adopt Nokia Use Common Operational Business Software efficiencies System Foundation with scale Applications & Analytics Looking forward 2016 2017 2018 • Software strategy in place • Common software • Software suite for major elements delivered product lines • Common architecture and components defined • Streamline service • Diversification success offering • Software sales • Improved service and care enablement • New commercial offers attach rate (SaaS, Hosted) • Dedicated sales force Disclaimer

It should be noted that Nokia and its business are interim report issued on May 10, 2016, our half year information to both management and investors exposed to various risks and uncertainties, and financial report issued on August 4, 2016, our regarding Nokia’s underlying business performance certain statements herein that are not historical interim report issued on October 27, 2016 and our by excluding the aforementioned items that may facts are forward-looking statements, including, stock exchange release covering our Capital Market not be indicative of Nokia’s business operating without limitation, those regarding future business Day issued on November 15, 2016. Other unknown results. These non-IFRS financial measures should and the financial performance of Nokia and its or unpredictable factors or underlying assumptions not be viewed in isolation or as substitutes to the industry and statements preceded by “believe,” subsequently proven to be incorrect could cause equivalent IFRS measure(s), but should be used in “expect,” “anticipate,” “foresee,” “sees,” “target,” actual results to differ materially from those in the conjunction with the most directly comparable IFRS “estimate,” “designed,” “aim,” “plans,” “intends,” forward-looking statements. Nokia does not measure(s) in the reported results. A detailed “focus,” “continue,” “will” or similar expressions. undertake any obligation to publicly update or revise explanation of the content of the non-IFRS These statements are based on management's best forward-looking statements, whether as a result of information and a reconciliation between the non- assumptions and beliefs in light of the information new information, future events or otherwise, except IFRS and the reported information for historical currently available to it. Because they involve risks to the extent legally required. periods can be found in Nokia’s respective results and uncertainties, actual results may differ In addition to information on our reported IFRS reports. Please see our issued interim reports for materially from the results that we currently expect. results, we provide certain information on a non- more information on our results and financial Factors, including risks and uncertainties that could IFRS, or underlying business performance, basis. performance for the indicated periods as well as our cause such differences can be both external, such as Non-IFRS results exclude costs related to the operating and reporting structure. general, economic and industry conditions, as well as Alcatel- transaction and related integration, Nokia is a registered trademark of Nokia internal operating factors. We have identified these goodwill impairment charges, intangible asset Corporation. Other product and names in more detail on pages 69 to 87 of Nokia’s annual amortization and purchase price related items, mentioned herein may be trademarks or trade report on Form 20-F for the year ended December restructuring related costs, and certain other items names of their respective owners. 31, 2015 under “Operating and Financial Review and that may not be indicative of Nokia's underlying Prospects—Risk Factors“, our other filings with the business performance. We believe that our non-IFRS U.S. Securities and Exchange Commission and in our financial measures provide meaningful supplemental © Nokia 2016