Nokia to stop doing business in Russia

STOCKHOLM, Sweden – Telecoms equipment maker Nokia is pulling out of the Russian market, its CEO told Reuters, going a step further than rival Ericsson, which said on Monday it was indefinitely suspending its business in the country.

Hundreds of foreign companies are cutting ties with Russia following its February 24 invasion of Ukraine and after unprecedented Western sanctions against Moscow.

While several sectors, including telecoms, have been exempted from some sanctions on humanitarian or related grounds, Nokia said it had decided quitting Russia was the only option.

“We just simply do not see any possibilities to continue in the country under the current circumstances,” Chief Executive Pekka Lundmark said in an interview.

He added Nokia would continue to support customers during the exit process, and it was not possible to say at this stage how long the withdrawal would take.

Nokia is applying for the relevant licenses to support customers in compliance with current sanctions, it said in a statement.

Both Nokia and Ericsson made a low single-digit percentage of sales in Russia, where Chinese companies such as Huawei and have a bigger share.

Nokia does not expect this decision to impact its 2022 outlook but said it would lead to a provision in the first quarter of about 100 million euros ($109 million).

Russia is also at loggerheads with Finland and Sweden, home countries of Nokia and Ericsson respectively, over their interest in joining the NATO military alliance. 

Russia had also been pushing for companies to start building networks using only Russian equipment, seeking to persuade Nokia and Ericsson to set up factories in the country.

Lundmark said Nokia would not implement a plan announced in November to set up a joint venture with Russia’s YADRO to build 4G and 5G telecom base stations.

Nokia’s decision to leave Russia will affect about 2,000 workers, and there is a possibility some of them could be offered work in other parts of the world, Lundmark said.

Nokia has about 90,000 employees globally.

“A lot would have to change before it will be possible to consider again doing business in the country,” Lundmark said. – Rappler.com