Nokia quits Russia over Ukraine invasion

Will the last Western tech biz in Moscow please turn out the lights?


Nokia is the second of the world's biggest telco network kit makers to turn its back on Russia in as many days due to the continuing invasion in Ukraine.

Yesterday, Ericsson "indefinitely" pulled out of the country.

"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," the Finnish organization said this morning in a statement.

In recent weeks the company suspended deliveries, halted new business and is in the process of moving the "limited" research and development activity 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."

Ericsson said yesterday it is placing employees affected by its withdrawal on paid leave, claiming there will be "no redundancies."

Although not open to new business, Nokia said that for "humanitarian reasons" it was going endeavor to support incumbent networks in Russia as "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," Nokia added in its statement.

As for the financial impact, Nokia confirmed Russia accounted for 2 percent of its net sales in calendar 2021 [PDF], equating to roughly €128 million ($129 million).

"Considering the strong demand we see in other regions – we do not expect this decision to impact our ability to achieve our 2022 outlook," it added.

The withdrawal from the country by both Nokia and Ericsson will smooth the way for Huawei to consolidate its position among Russian customers. Huawei accounts for 40 to 60 percent of already installed wireless network equipment, according to research by Dell 'Oro.

We have asked Huawei if it too is currently reviewing operations in Russia but the company wasn't immediately available to respond. Huawei did not indicate in its 2021 annual report the size of revenues it generated in Russia.

To date, a raft of US and European tech vendors have, at the very least, paused shipments to Russia. These include Intel, AMD, TSMC, Dell, HP, HPE, Microsoft, SAP, Oracle and more. Adobe, UiPath and Ericsson forecast the financial consequence of their actions to the tune of $75m, $15 million and a single $95.32 million provision (for Q1 of 2022) respectively. ®

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