Nokia exiting Russia, but looking to support existing networks

12 Apr 2022

Finnish telecoms equipment giant Nokia released a statement this morning confirming that it is exiting the Russian market, whilst aiming to enable support for existing networks there. Nokia will take a one-off hit of around EUR100 million (USD109 million) as a consequence of the decision, a similar figure to the USD95 million impairment notified by rival vendor Ericsson in the latter’s announcement yesterday of an ‘indefinite suspension’ of Russian operations.

Nokia’s statement declared: ‘It has been clear for Nokia since the early days of the invasion of Ukraine that continuing our presence in Russia would not be possible. Over the last weeks we have suspended deliveries, stopped new business and are moving our limited R&D activities out of Russia. We can now announce we will exit the Russian market. During this process our priority continues to be the safety and wellbeing of our employees.’

The release continued: ‘For humanitarian reasons, Western governments have expressed concerns about the risk of critical telecommunication network infrastructure in Russia failing. They have also emphasised the importance of ensuring the continued flow of information and access to the internet which provides outside perspectives to the Russian people. Therefore, as we exit we will aim to provide the necessary support to maintain the networks and are applying for the relevant licences to enable this support in compliance with current sanctions. This is the most responsible course of action for Nokia to take as we exit the Russian market.’ TeleGeography notes that Nokia has partnered all four of Russia’s major mobile operators MTS, MegaFon, Tele2 Russia and Beeline in 4G, 5G and IoT network rollouts and development projects.

Regarding financial impacts, Nokia reported: ‘Russia accounted for less than 2% of our net sales in 2021. Considering the strong demand we see in other regions – we do not expect this decision to impact our ability to achieve our 2022 outlook … We expect this decision to lead to a provision in Q1 of approximately EUR100 million which will impact our reported but not comparable financials.’