Nokia to stop doing business in Russia (updated)

Ztest Electronics

12/04/2022 07:14

(Adds comment on outlook, paragraph 8)
    By Supantha Mukherjee
    STOCKHOLM, April 12 (Reuters) - Telecoms equipment maker
Nokia  NOKIA.HE  is pulling out of the Russian market, its CEO
told Reuters, going a step further than rival Ericsson
 ERICb.ST , which said on Monday it was indefinitely suspending
its business in the country.  
    Hundreds of foreign companies are cutting ties with Russia
following its Feb. 24 invasion of Ukraine and after 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 that quitting Russia was the only
option.
    "We just simply do not see any possibilities to continue in
the country under the current circumstances," CEO Pekka Lundmark
said in an interview.
    He added Nokia would continue to support customers during
its exit, and it was not possible to say at this stage how long
the withdrawal would take. 
    Nokia is applying for the relevant licences 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
 HWT.UL  and ZTE  000063.SZ  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, the
home countries of Nokia and Ericsson respectively, over their
interest in joining the NATO military alliance.  urn:newsml:reuters.com:*:nR4N2VR00X
    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 some of them might 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. 
    ($1 = 0.9199 euros)

 (Reporting by Supantha Mukherjee, European Technology &
Telecoms Correspondent, based in Stockholm; editing by Mark
Potter and Jason Neely)
 ((supantha.mukherjee@thomsonreuters.com; +46 70 721 1004;
Reuters Messaging:
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