Following Russia’s invasion of Ukraine on February 24 and the imposition of Western sanctions on Moscow, hundreds of global corporations have suspended relationships with the country. Although some companies, notably telecommunications, have been exempted from some bans due to humanitarian or related concerns, Nokia stated that leaving Russia was the only option.
We just simply do not see any possibilities to continue in the country under the current circumstances.Pekka Lundmark, CEO of Nokia
Nokia would continue to serve customers during its exit, he said, adding that it was impossible to estimate how long the process would take at this time.
Nokia stated in a statement that it is applying for the required licenses to help customers comply with current sanctions. Nokia and Ericsson both sold in the low single digits in Russia, where Chinese businesses such as Huawei and ZTE have a larger market share.
Nokia expects this decision to have no impact on its 2022 forecast, but it will result in a provision of around 100 million euros ($109 million) in the first quarter.
Russia is also at war with Finland and Sweden, the respective home countries of Nokia and Ericsson, over their interest in joining the NATO military alliance. Russia was also trying to convince Nokia and Ericsson to build up plants in the country so that they could start creating networks using just Russian equipment.
Nokia will not carry out a proposal announced in November to form a joint venture with Russia’s YADRO to manufacture 4G and 5G telecom base stations, according to Lundmark. About 2,000 Nokia employees will be affected by the company’s decision to leave Russia, and some of them may be offered jobs elsewhere, according to Lundmark.
A lot would have to change before it will be possible to consider again doing business in the country.Pekka Lundmark, CEO of Nokia