Nokia To Withdraw Completely From Russian Market

Telecom equipment maker Nokia has confirmed it is pulling out of the Russian market, and not just suspending its operations in the country.

Nokia confirmed it is going a step further than rival Ericsson, which said on Monday it was indefinitely suspending its business in the country.

Nokia decided in light of Russia’s unprovoked invasion of Ukraine, that quitting Russia was the only option.

Russian withdrawal

Russia’s invasion of Ukraine has brought worldwide condemnation and some of the most severe and wide ranging sanctions ever seen, that includes much of the tech industry.

Indeed, things are now so bad for Russia that this week it has for the first time since 1918 defaulted on its sovereign debt, as it cannot access its US dollar reserves held by American banks.

On Tuesday Nokia made clear its position on Russia in a statement, and why it felt that it had to withdraw from Russia, even though it operates in a sector (telecoms) that can be except from sanction restrictions on humanitarian or related grounds.

“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,” said the Finnish giant. “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,” Nokia added. “During this process our priority continues to be the safety and wellbeing of our employees.”

Nokia has 90,000 staff worldwide and its withdrawal from Russia is reportedly going to impact 2,000 jobs in Russia.

“For humanitarian reasons, Western governments have expressed concerns about the risk of critical telecommunication network infrastructure in Russia failing,” said Nokia. “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.”

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

Nokia said the financial impact of the decision will not be big, as Russia accounted for less than 2 percent of its net sales in 2021.

It is understood that the Russia is not a particularly big market for either Nokia or Ericsson, as Chinese rivals such as Huawei and ZTE have a bigger share of that market.

NATO move

Russia’s brutal aggression in Ukraine has also resulted in both Finland and Sweden, who are historically neutral, expressing their interest in joining the NATO military alliance.

With Russia now an international outcast, Moscow is seeking to make the country self dependent on technology.

President Vladimir Putin recently signed a decree, which ordered from 31 March 2022 foreign software such as standalone applications, or software embedded within hardware or equipment, can no longer be purchased with the approval of Moscow.