Nokia’s withdrawal from Russia amid war in Ukraine is one step ahead of rivals

War between Russia and Ukraine: Russia’s attack on Ukraine on February 24 has sparked worldwide condemnation.


Telecommunications equipment maker Nokia pulls out of the Russian market, its CEO told Reuters, and goes a step further than rival Ericsson, which on Monday said it was halting its business in the country indefinitely.

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

While several sectors, including telecommunications, have been exempted from some sanctions on humanitarian or related grounds, Nokia has said it has decided to leave Russia as the only option.

“We simply see no possibility of continuing under the current conditions in the country,” CEO Pekka Lundmark said in an interview.

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

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

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

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

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

Russia has also urged companies to start building networks using only Russian equipment, 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 telecommunications base stations.

Nokia’s decision to leave Russia will affect some 2,000 workers, some of whom may be offered jobs in other parts of the world, Lundmark said.

Nokia has about 90,000 employees worldwide.

“Many will have to change before it will be possible to reconsider doing business in the country,” Lundmark said.

($ 1 = 0.9199 euros)

(Reporting by Supantha Mukherjee, European Technology and Telecommunications Correspondent based in Stockholm; Edited by Mark Potter and Jason Neely)

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