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Hundreds of foreign companies are cutting ties with Russia
following its February 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 EUR
100 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.
© Reuters