Telecoms equipment maker Nokia (HE: NOKIA ) is pulling out of the Russian market, its CEO told Reuters, going one step further than rival Ericsson (ST: ERICb ), which said Monday that it was indefinitely suspending its business in the country.
Hundreds of foreign companies are cutting ties with Russia after it invaded Ukraine on February 24 and following unprecedented Western sanctions against Moscow.
Although several sectors, including telecommunications, have been exempted from some sanctions on humanitarian or related grounds, Nokia said it had decided to leave Russia as the only option.
“We just don’t see any chance of continuing in the country under the current circumstances,” CEO Pekka Lundmark said in an interview.
He added that Nokia would continue to support customers through the exit process, and that it was not possible to say at this time how long the withdrawal would take.
Nokia is applying for the relevant licenses to assist customers in complying with existing sanctions, it said in a statement.
Both Nokia and Ericsson have a single-digit percentage of sales in Russia, where Chinese companies such as Huawei and ZTE (HK: 0763 ) have a larger share.
Nokia does not expect this decision to affect its 2022 outlook, but said it would generate a provision in the first quarter of about 100 million euros ($109 million).
Russia is also at odds with Finland and Sweden, the home countries of Nokia and Ericsson respectively, over their interest in joining the NATO military alliance.
Moscow has also been pushing for companies to start building networks using only Russian equipment, trying to persuade Nokia and Ericsson to set up factories in the country.
Lundmark said Nokia would not implement a plan announced in November to create a joint venture with Russia’s YADRO to build 4G and 5G telecommunications base stations.
Nokia’s decision to leave Russia will affect some 2,000 workers, and there is a possibility that some of them will be offered jobs in other parts of the world, Lundmark said.
Nokia has about 90,000 employees worldwide.
“A lot of things would have to change before doing business in the country again could be considered,” Lundmark said.