Nokia Follows Western Sanctions, Withdraws Business From Russia

Nokia chose to withdraw from Russia. (photo: doc. pixabay)

JAKARTA - The maker of telecommunications equipment, Nokia, has finally withdrawn from the Russian market. This was disclosed by the Finnish company to Reuters. It went further than rival Ericsson, saying on Monday, April 11 that it was suspending its business in the country indefinitely.

Hundreds of foreign companies have cut ties with Russia after the February 24 invasion of Ukraine and after the emergence of Western sanctions against Moscow.

Meanwhile, several sectors, including telecommunications, have been exempted from some sanctions on humanitarian grounds or other related matters. Nokia said it had decided that exiting Russia was the only option.

"We don't see any possibility of continuing business in the country under the current circumstances," Nokia CEO Pekka Lundmark said in an interview.

He added that Nokia would continue to support customers during their exit from Russia, and had not said at this stage how long the recall would take.

"Nokia is applying for the relevant licenses to support customers in accordance with the current sanctions," Lundmark said, in a statement.

Both Nokia and Ericsson have generated low single-digit sales percentages in Russia, where Chinese companies such as Huawei and ZTE have a larger share in the country.

Nokia does not expect this decision to impact its 2022 outlook but says it will lead to a provision in the first quarter of around 100 million euros.

Russia is also at odds with Finland and Sweden, the home countries of Nokia and Ericsson, over their interest in joining the NATO military alliance.

Russia has also encouraged companies to start building networks using only Russian equipment. They tried 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 telecommunications base stations.

According to Lundmark, Nokia's decision to leave Russia will affect around 2,000 workers, and some of them may be offered jobs in other parts of the world. Nokia currently has around 90,000 employees worldwide.

"A lot has to change before it's possible to reconsider doing business in this country," Lundmark said.