Nokia mostly pulls out of Russia

Finnish kit vendor Nokia has announced it will cease operations in Russia, but will ‘provide the necessary support to maintain the networks and [is] applying for the relevant licenses to enable this support’.

Following the news that Ericsson was pulling out of Russia yesterday, fellow Nordic telecoms equipment giant Nokia has announced that it will also be exiting the region, though adding the caveat that it will aim to provide the support to maintain the networks there.

The statement reads:

It has been clear for Nokia since the early days of the invasion of Ukraine that continuing our presence in Russia would not be possible. 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.

For humanitarian reasons, Western governments have expressed concerns about the risk of critical telecommunication network infrastructure in Russia failing. They have also emphasized the importance of ensuring the continued flow of information and access to the internet which provides outside perspectives to the Russian people. Therefore, as we exit we will aim to provide the necessary support to maintain the networks and are applying for the relevant licenses to enable this support in compliance with current sanctions.

This is the most responsible course of action for Nokia to take as we exit the Russian market.

According to Light Reading around 160 R&D roles in St Petersburg seem to be at risk. Staff there have apparently been told the site will shut down and they will be offered a relocation package, with R&D roles perhaps being transferred to Finland.

Nokia says Russia accounted for less than 2% of its net sales in 2021, and pulling out of the country should not stop it hitting its 2022 financial projections. “We expect this decision to lead to a provision in Q1 of approximately €100m which will impact our reported but not comparable financials,” said the report.

So Nokia, like Ericsson, is pulling out of Russia as completely as it is able to whilst adhering to a wider desire/obligation to make sure the entire telecoms network doesn’t fall over in the region. And certainly in Nokia’s case, it doesn’t seem like it’s going to break the bank doing so. What form any continued ‘support’ will take and what vendors/contractors might move in to pick up the sort of standard maintenance and repair work Nokia and Ericsson might be regularly engaged in, remains to be seen.

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