Ericsson and Nokia suspend operations in Russia

ericsson Y nokia join the list of technologies that have ceased to operate in Russia protesting the invasion of Ukraine. But while Ericsson has announced that it will do so for an indefinite period of time, Nokia has confirmed that it will stop operating in the country permanently.

The first, after six weeks of analyzing the impact of the sanctions imposed on Russia by the West, has decided to suspend its operations and sales to the country, but will continue to pay the salary of its workers in Russia. The company decided to suspend its sales to the country at the end of February, and will now stop doing business with its Russian customers indefinitely. As a consequence of its withdrawal from this market, Ericsson will suffer an impact of more than 95 million dollars, which it will indicate in the first quarter of 2022 as “decrease in assets and other exceptional costs”.

Ericsson was helping develop private 5G networks for industrial customers, together with Mobile TeleSystems Public Joint Stock, the country’s leading mobile telecommunications provider. In addition, it had a 5G innovation hub in Moscow, and since 2014 it had an Ericsson Academy in Moscow, with which it trained local companies and citizens to use its kit.

Nokia, for its part, has confirmed that it will continue to provide support to its customers during their exit process from Russia, a period that they still do not know when it will last. For now, it is applying for the relevant licenses it needs to provide support to its customers, and to do so in accordance with the sanctions in place. The company does not expect this decision to have an impact on its 2022 forecasts, but it has announced that it will make a provision in this regard in its first quarter results, of around 100 million euros.

This decision also means that Nokia is not going to implement a plan announced in November, in which it announced the launch of a joint venture with Russia’s Yadro to develop 4G and 5G base stations. As for the number of workers affected by this decision, there will be around 2,000, although the company has confirmed that several will be offered work in other countries.

The departure of both companies, dedicated to the networks, from the country, are undoubtedly good news for Huawei, which has been banned in numerous countries and is sanctioned by the United States. The Chinese company is well placed in Russia, and with these exits, it is more than likely to gain good market share in Russia. Currently, between 40% and 60% of the wireless equipment installed in Russia is from Huawei.

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