Stockholm: Nokia’s CEO told Reuters that the company is withdrawing out of the Russian market, taking a step farther than competitor Ericsson, which said on Monday that it was halting its operations in the nation indefinitely.
Following Russia’s Feb. 24 invasion of Ukraine and Western sanctions against Moscow, hundreds of global corporations are breaking connections with Moscow.
On humanitarian and related reasons, certain sanctions have been exempted from telecoms. However, Nokia stated it had chosen to leave Russia.
“We just simply do not see any possibilities to continue in the country under the current circumstances,” CEO Pekka Lundmark said in an interview.
Nokia will continue to serve its customers when it exits, but it is not yet clear how long the withdrawal process would take, he stated.
A statement from Nokia stated that it is seeking for licenses to service customers in accordance with current penalties.
The Russian market is dominated by Chinese enterprises like Huawei and ZTE, although Nokia and Ericsson have a small stake.
In the first quarter of this year, Nokia expects to make a provision of around 100 million euros ($109 million) because of this decision.
Russia is also at odds with Finland and Sweden, the nations where Nokia and Ericsson are headquartered, over their desire to join NATO’s military alliance.
In order to entice Nokia and Ericsson to establish facilities in the nation, Russia has also pushed for enterprises to begin creating networks using solely Russian equipment.
A joint venture with Russia’s YADRO to manufacture 4G and 5G telecom base stations announced in November will not be implemented, according to Lundmark.
About 2,000 people would be affected by Nokia’s decision to leave Russia, and some of them may be offered jobs in other countries, Lundmark added.
In all, 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 said.
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