Nokia has announced it is exiting Russia, following a similar move by rival Ericsson, which last week suspended its operations there indefinitely.
“Since the early days of the invasion of Ukraine, it has been clear to Nokia that continuing our presence in Russia would not be possible,” the company said in an official statement.
In recent weeks Nokia halted deliveries to Russia, stopped taking on new contracts and began relocating research and development activities outside the country. Today’s announcement confirms the company will fully withdraw from the Russian market.
As with Ericsson, Nokia says the welfare of its employees will be its primary concern during this withdrawal.
Governments around the world have tightened sanctions after new investigations uncovered further atrocities by Russian forces in areas such as Bucha and Irpin, including allegations of rape, torture and executions of bound and blindfolded civilians. Unconfirmed reports this week about possible chemical weapons use could increase international pressure further.
At the same time, many Western governments have voiced concern about the humanitarian consequences should Russia’s telecommunications networks deteriorate or fail entirely.
Most Russian citizens rely on state-controlled media, which have repeatedly promoted false narratives — for example, falsely claiming Ukraine is run by Nazis despite its Jewish president, or suggesting Ukraine presents a nuclear threat despite having relinquished its nuclear arsenal in 1994 under security assurances. These outlets also frequently manipulate casualty and battlefield figures to minimize Russian losses and exaggerate gains.
Telecommunications networks, however imperfect, provide at least some people with the tools and knowledge to access alternative information sources. To mitigate risks to civilian access, several governments are offering specialist licenses that would allow telecom companies to provide limited technical support in Russia without breaching sanctions.
“For humanitarian reasons, Western governments have expressed concern about the risk of critical telecommunication network infrastructure in Russia failing. They have also emphasised the importance of ensuring the continued flow of information and access to the internet, which provides outside perspectives to the Russian people,” Nokia said.
“Accordingly, as we exit we will seek to provide the necessary support to maintain networks and are applying for the relevant licenses to enable this support in compliance with current sanctions.”
Russia represented less than two percent of Nokia’s sales in 2021. Given strong demand in other regions, Nokia does not expect this withdrawal to derail its financial targets for 2022.
Nokia does, however, expect to record a non-cash provision in the first quarter of approximately $108 million related to the exit. That figure is broadly comparable to the roughly $95 million provision Ericsson estimated after suspending its Russian operations.
With Nokia and Ericsson stepping back, Russian carriers will likely depend more heavily on Chinese vendors such as Huawei and ZTE for the foreseeable future.
Both Huawei and ZTE remain on the US Entity List, which restricts American companies from supplying them. To date, neither Chinese vendor has publicly announced any suspension of business with Russia.
Since their inclusion on the Entity List, Huawei and ZTE have relied on existing stocks of US-made semiconductors to build equipment. Over time, they will need to substitute those components with domestically produced or alternative chips that are currently less advanced. Analysts estimate China is still several years—roughly two to three years—away from producing semiconductors on par with the most advanced US technology.
Russia has yet to roll out 5G networks at scale. When it does, limitations in available equipment and components could leave carriers dependent on older-generation technology, illustrating another way the Kremlin’s policies and geopolitical isolation can hamper the country’s technological progress.
(Image Credit: Nokia)
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