Nokia's Pullout From Russia Amid Ukraine War Is One Step More Than Rivals

Telecoms equipment maker Nokia is pulling out of the Russian market, its CEO told Reuters, going a step further than rival Ericsson, which said on Monday it was indefinitely suspending its business in the country.

Hundreds of foreign companies are cutting ties with Russia following its Feb. 24 invasion of Ukraine and after Western sanctions against Moscow.

While several sectors, including telecoms, have been exempted from some sanctions on humanitarian or related grounds, Nokia said it had decided that quitting Russia was the only option.

"We just simply do not see any possibilities to continue in the country under the current circumstances," CEO Pekka Lundmark said in an interview.

He added Nokia would continue to support customers during its exit, and it was not possible to say at this stage how long the withdrawal would take.

Nokia is applying for the relevant licences to support customers in compliance with current sanctions, it said in a statement.

Both Nokia and Ericsson made a low single-digit percentage of sales in Russia, where Chinese companies such as Huawei and ZTE have a bigger share.

Nokia does not expect this decision to impact its 2022 outlook but said it would lead to a provision in the first quarter of about 100 million euros ($109 million).

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

Russia had also been pushing for companies to start building networks using only Russian equipment, seeking to persuade Nokia and Ericsson to set up factories in the country.

Lundmark said Nokia would not implement a plan announced in November to set up a joint venture with Russia's YADRO to build 4G and 5G telecom base stations.

Nokia's decision to leave Russia will affect about 2,000 workers, and some of them might be offered work in other parts of the world, Lundmark said.

Nokia has about 90,000 employees globally.

"A lot would have to change before it will be possible to consider again doing business in the country," Lundmark said.

($1 = 0.9199 euros)

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm; editing by Mark Potter and Jason Neely)