Telecom equipment maker Nokia is exiting the Russian market, its CEO told Reuters, going a step further than rival Ericsson, which said on Monday it was suspending its business in the country indefinitely.
Hundreds of foreign companies are breaking up Russia Following the invasion of Ukraine on 24 February and Western sanctions against Moscow.
While many sectors, including telecommunications, have been exempted from certain restrictions on humanitarian or related grounds, Nokia said that it had decided that leaving Russia was the only option.
“We don’t see any prospects for the country to remain in the current circumstances,” CEO Pekka Lundmark said in an interview.
He added that Nokia will continue to support customers during the exit, and it is not possible to say at this stage how long the withdrawal will take.
Nokia is applying for a relevant license to support customers in compliance with existing restrictions, a statement said.
nokia and both ericsson made up a low single-digit percentage of sales in Russia, where Chinese companies such as Huawei And ZTE be a big part.
Nokia does not expect the decision to affect its 2022 outlook, but said it would lead to a provision of around €100 million (about Rs 830 crore) in the first quarter.
Russia, Finland and Sweden are also in conflict with the home countries of Nokia and Ericsson, respectively, over their interest in joining the NATO military alliance.
Russia was also pushing companies to build networks using only Russian equipment, seeking to persuade Nokia and Ericsson to set up factories in the country.
Lundmark said Nokia would not implement plans announced in November to set up a joint venture with Russia’s Yadro to build 4G and 5G telecom base stations.
Lundmark said about 2,000 employees would be affected by Nokia’s decision to leave Russia and some of them could be offered work in other parts of the world.
Nokia has approximately 90,000 employees globally.
“A lot has to change before the country can even consider doing business again,” Lundmark said.
© Thomson Reuters 2022