less than 2% net sales
“From the first days of the occupation of Ukraine, Nokia clearly saw that a permanent presence in Russia is impossible. In recent weeks we have suspended deliveries, stopped new business and are moving our limited R&D activities outside of Russia. We can now announce that we are withdrawing from the Russian market,” he said.
It is stated that during the withdrawal from Russia, Nokia’s priority remains the safety and well-being of its employees. In addition, the company said that Western countries are interested in providing citizens of the Russian Federation with a constant flow of information and Internet access, because this opens “external prospects” for them.
“Therefore, when we leave (from the Russian market. – socialbites.ca), we will try to provide the necessary support for service (Rus. – socialbites.ca) networks and apply for the appropriate licenses to provide this support. enforceable sanctions,” Nokia added.
The company also reassured that leaving the Russian market would have no financial implications for Nokia, as Russia accounted for less than 2% of its net sales in 2021.
“Given the strong demand we have seen in other regions, we do not expect this decision to affect our ability to deliver on our 2022 forecast… This will affect our reporting, but not financial performance.”
Nokia Corporation manufactures telecommunications equipment for mobile, broadband and IP networks.
The company’s president, Pekka Lundmark, told Reuters that Nokia “does not see an opportunity to continue in the country (business. – socialbites.ca) under the current circumstances”. However, the institution will continue to provide support to customers until exit from the market is complete.
“In light of recent events”
On the eve of the suspension of its activities in Russia announced Swedish telecommunications company Ericsson.
“At the end of February, Ericsson suspended all deliveries to customers in Russia. In light of recent events and European Union sanctions, the company will now suspend its activities with customers in Russia indefinitely. Ericsson is discussing with customers and partners the suspension of affected work … The priority is to ensure the safety and well-being of Ericsson employees in Russia, they will be sent on paid leave, ”said Ericsson. its website.
It also records SEK 0.9 billion for asset impairment and other exceptional expenses in the first quarter of 2022. It is stated that this amount does not include the cost of dismissal of the personnel.
Ericsson is a Swedish company that provides network technologies, digital services, advanced support services and network maintenance.
Fifth package of EU sanctions
The EU’s fifth round of sanctions, which went into effect on April 8, imposed a general ban on technology transfers to state-controlled Russian telecom operators. Kommersant reported that for this reason, Russian state operators will not be able to use Ericsson and Nokia equipment. According to the publication, these restrictions may apply, in addition to Rostelecom, to the mobile operator Tele2 and Transtelecom, which creates backbone networks based on the infrastructure of Russian Railways. Experts interviewed by the publication said that despite the increased policy of import substitution, companies will not be able to completely replace some European solutions.
In addition, Rostelecom is already subject to US industry sanctions, according to which the state operator cannot raise funds from the US market. The expert told the publication that the ban on the supply of European equipment and licenses for communication networks may also affect the main operators Transtelecom and Voentelecom, controlled by Russian Railways (owned by JSC Garrison, owned by the Ministry of Defense).
Russian equipment for communication networks in Russia is produced by about 100 enterprises, but at the moment they also depend on the supply of components, which is not yet in progress, Telecom Daily CEO Denis Kuskov told Kommersant.
The departure of Nokia after Ericsson is critical for the Russian market, as these two telecommunications equipment manufacturers together make up about 45% of the infrastructure market, Mobile Research Group analyst Eldar Murtazin told NEWS.ru. According to him, this will have a negative impact on operators such as Tele2 and Rostelecom, since their networks are built on European equipment. Also, Nokia has a very important role for MTS.