Nokia (NOKIA.HE) is exiting the Russian market, according to its CEO, going farther than rival Ericsson (ERICb.ST), which said on Monday that it was suspending operations in the nation indefinitely.
Following Russia’s invasion of Ukraine on February 24 and the imposition of Western sanctions on Moscow, hundreds of global corporations have severed connections with the country.
While certain industries, notably telecommunications, have been exempted from some restrictions due to humanitarian or related concerns, Nokia stated that leaving Russia was the only alternative.
Both Nokia and Ericsson sold in the low single digits in Russia, where Chinese businesses like Huawei (HWT.UL) and ZTE (000063. SZ) have a larger market share.
Nokia expects this decision to have no impact on its 2022 projection, but it will result in a provision of around 100 million euros ($109 million) in the first quarter.
Russia is also at odds with Finland and Sweden, the respective home countries of Nokia and Ericsson, over their desire to join the NATO military alliance.
Russia was also trying to persuade Nokia and Ericsson to establish 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.
Nokia employs approximately 90,000 people worldwide.
“A lot of things would have to change before we could consider doing business in the country again,” Lundmark added.