Nokia

Nokia exits Russian market

Nokia and Ericsson’s exit leaves Huawei as the only major foreign telecom on the Russian market
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Image: Shutterstock via Dennis

12 April 2022

Nokia has suspended its business operations on the Russian market due to the ongoing invasion of Ukraine, the company said on Tuesday.

The announcement comes one day after Ericsson issued a similar statement. Both companies had suspended deliveries to Russia in early March.

Nokia said that “continuing [its] presence in Russia would not be possible” due to the ongoing military conflict initiated by the Russian army.

 

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“Over the last weeks, we have suspended deliveries, stopped new business and are moving our limited R&D activities out of Russia. We can now announce we will exit the Russian market. During this process, our priority continues to be the safety and wellbeing of our employees,” it added.

Nokia is estimated to employ 2,000 staff members in Moscow, Saint Petersburg, and Voronezh, with Russia accounting for “less than 2%” of the Finnish telecom’s net sales in 2021.

“We do not expect this decision to impact our ability to achieve our 2022 outlook provided in the Nokia financial report for Q4 and full-year 2021 issued on 3 February 2022,” the company stated.

Despite suspending operations on the Russian market, Nokia has applied for licences that will enable it to support existing networks in the country, which is facing the imminent threat of its critical telecommunication network infrastructure collapsing. Russian mobile operators are heavily dependent on foreign technology, prompting President Vladimir Putin to order “technological independence and security of the critical information infrastructure” by 2025 in the face of growing sanctions.

Nokia described the decision to apply for the licence as “the most responsible course of action for Nokia” that was motivated by “humanitarian reasons”.

The collapse of Russia’s telecommunications network infrastructure could heavily impact citizens’ Internet access, leading to even increased alienation from “outside perspectives” that aren’t controlled by the government. Russian TV stations have continued to spread disinformation about the invasion of Ukraine, with war crimes and atrocities being discredited as attempts to discredit the Russian state.

Nokia and Ericsson’s exit leaves Huawei as the only major foreign telecom on the Russian market. With a 33% market share of all cellular base stations operating in Russia, the Chinese tech giant could benefit tremendously from staying in the country and taking over Nokia and Ericsson’s shares. However, latest reports from Forbes Russia suggest that Huawei has placed Russian staff on ​​mandatory leave of absence for at least one month and is considering closing its offices permanently.

© Dennis Publishing


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