Nokia Is Exiting the Russian Market Due to the Ukraine Crisis

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Nokia's CEO told Reuters that the company is exiting the Russian market, going farther than competitor Ericsson, which said on Monday that it was stopping operations in the country indefinitely.

Hundreds of global corporations have severed relations with Russia in the aftermath of its February 24 invasion of Ukraine and Western sanctions against Moscow.

While certain industries, notably telecommunications, have been spared from some restrictions on humanitarian or other reasons, Nokia stated that leaving Russia was the only alternative.

"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 also stated that Nokia will continue to serve consumers during its pullout, and that it was not feasible to predict how long the withdrawal would take at this time.

Nokia stated in a statement that it is seeking for the necessary licences to assist customers in complying with current penalties.

In Russia, where Chinese businesses such as Huawei and ZTE have a larger market share, both Nokia and Ericsson made a low single-digit proportion of sales.

Nokia does not expect this decision to have an impact on its 2022 projection, but it will result in a EUR 100 million provision in the first quarter (roughly Rs. 830 crore).

Russia is also at odds with Finland and Sweden, the respective home nations of Nokia and Ericsson, over their desire to join the NATO military alliance.

Russia had also pushed for corporations to begin creating networks using entirely Russian technology, attempting to persuade Nokia and Ericsson to establish facilities in the nation.

Lundmark stated that Nokia will not carry out a November proposal to form a joint venture with Russia's YADRO to manufacture 4G and 5G telecom base stations.

Nokia's decision to leave Russia will effect around 2,000 employees, and some of them may be given jobs in other regions of the world, according to Lundmark.

Nokia employs around 90,000 people worldwide.

"A lot would have to change before it will be possible to consider again doing business in the country," Lundmark added.

News by: NewsPen Added on: 12-Apr-2022

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