Nokia Russia

After the sale smartphones of the company's production business in 2014, she Microsoft Russia Nokia focused on developing the business of her Nokia Networks division, which operates in our country under the Nokia brand.

Main article: Nokia Networks in Russia

Performance indicators

2023: Sales cut by €260m

At the end of January 2023, Nokia published its financial statements. It follows from it that in 2022 the company's revenue on the Russian market decreased by 260 million euros compared to 2021. In the fourth quarter of 2022, sales of the Finnish telecommunications equipment manufacturer decreased by 80 million euros on an annualized basis.

Nokia did not disclose the absolute income indicators in Russia for October-December and the whole of 2022. The company only noted that in 2021 the Russian Federation accounted for less than 2% of its net revenue. In 2021, the vendor earned 22.2 billion euros in revenue, which means that in Russia it amounted to 444 million euros. If we exclude 260 million euros from this amount, it turns out that Nokia sales in Russia in 2022 could amount to 184 million euros.

Nokia sales in Russia in 2022 decreased by 260 million euros

The company noted that 104 million euros of expenses related to the curtailment of business in Russia were reserved for the first quarter of 2022. At the same time, Nokia officially announced its departure from the Russian Federation on April 12, 22022. In its reporting for 2022, the corporation once again confirmed its intentions to provide customers with "the necessary support for the work of existing networks." The company said that the drop in sales in the Russian Federation was offset by high demand in other regions. In 2022, Nokia's consolidated revenue reached 24.91 billion euros, an increase of 12% compared to the previous year. In Europe, which includes income in the Russian Federation, a 6% increase in turnover is registered, up to 6.66 billion euros.

Nokia's report also said that by December 31, 2022, the company had reserved about 404 million euros for various expenses, including termination of business in Russia, restructuring, payment of additional taxes, etc. Report for Q4 and full year 2022 A solid end to a year of acceleration

History

2023

Import into Russia of a batch of 30 thousand key components for base stations

Maxcomm received compliance certificates necessary to supply 20 thousand communication base stations of the Nokia manufacturer to Russia, components for them, and also declared the import of 30 thousand radio modules (receiving and transmitting devices) into the country for Nokia base stations supporting the LTE standard. This became known on May 17, 2023.

As a network construction specialist clarified to Izvestia, these radio modules support the LTE standard. According to him, the cost of each of them can vary from 100 thousand to 200 thousand rubles. Thus, the entire party will cost 2-4 billion rubles.

A batch of 20 thousand key components for Nokia base stations was imported into the Russian Federation

According to another expert on the development of cellular infrastructure, 20 thousand base stations would be enough to cover a large Russian region or several not very large ones with mobile communications.

This is a set of equipment for Nokia base stations for 2G and LTE, which is completely identical to that already installed in Russian mobile networks. The same equipment was officially imported into Russia from 2019 to 2021. Now it can again be imported into the Russian Federation using parallel imports, - explained Alexander Sivolobov, deputy head of the NTI Competence Center based on Skoltech for wireless communications and the Internet of Things.

He confirmed that 20 thousand base stations are an impressive batch, which the expert estimated at $30-60 million. The materials of the Federal Accreditation Agency (maintains the "Unified Register of Certificates") say that the equipment was produced in Finland, Hungary, Poland, India and other countries.

Maxcomm LLC was established on February 7, 2023 with the main activity "wholesale trade in electronic and telecommunication equipment and its spare parts."^[1]

Nokia curtails its participation in the joint venture with Rostelecom, but does not abandon Russians without support

Nokia is gradually curtailing its participation in a joint venture with Rostelecom as it leaves the Russian market. This follows from the company's annual report on form 20-F, published in early March 2023^[2]. There are agreements to gradually reduce the activity of the joint venture and withdraw from its capital, or completely liquidate the enterprise. In the latter case, it would be necessary to first obtain the necessary regulatory approvals.

The company in question, RTK-Network Technologies, is one of two joint ventures that Nokia has in Russia in addition to its main legal entities. The second joint venture was established for educational purposes with MTUSI. According to the database of legal entities Kontur.Fokus, "since December 2022 it has already been under liquidation.

As for RTK-Network Technologies, in it Rostelecom, through a third legal entity, is a co-owner with a 51 percent stake in the authorized capital. According to Kontur. Focus, the revenue of this company in 2021 amounted to 3.5 billion rubles.

RTK-Network Technologies was formed by Nokia and Rostelecom in 2018 "(photo - AFP 2023/Vesa Moilanen/Lehtikuva)"

Nokia recalls in its annual report that Rostelecom is under international sanctions, including sectoral sanctions. USA Given the ownership structure, they also apply to RTK-Network Technologies. However, the company has room for maneuvers. Thus, sectoral sanctions prohibit American individuals from some transactions with the company's debt and capital, but do not prohibit other operations.

In addition, the Office of Foreign Assets Control (OFAC), a division of the U.S. Treasury Department, issued a license authorizing some telecommunications transactions that would otherwise be prohibited due to sanctions. Among other things, permitted transactions include "export and re-export, sales, supply directly or indirectly from the United States or by American persons to Russia of services, software and hardware or technologies for exchanging communications over the Internet."

At the same time, the chain of interaction between Nokia and Rostelecom usually does not include American persons, and, accordingly, is not limited to American sanctions, the company explains in its annual report. Also, the joint venture with Rostelecom is not currently under EU sanctions.

We comply with all applicable sanctions and restrictions, and in order to ensure their compliance, all transactions between members of our group and Rostelecom or a joint venture are studied by the compliance team and external lawyers when necessary, Nokia notes in its annual report.

In April 2022, as previously reported, Nokia announced plans to withdraw from the Russian market. Nokia claims that by now they have stopped deliveries to Russia and the development of new business activities, and have also withdrawn research and development activities from Russia, which were previously conducted there.

But, the company recalls its annual report, for humanitarian reasons, Western governments have previously expressed concern that Russia's critical telecommunications infrastructure could suffer. At the same time, the emphasis was made on the fact that access to the Internet would be limited for Russian citizens and, as a result, would be limited to receiving information from outside.

In this regard, in parallel with the exit from the market, Nokia aims to provide the support necessary for the operability of networks in Russia, while observing the sanctions: "Nokia sees this as the most responsible path to follow."

To provide such support, the company has applied for the necessary licenses, Nokia says in its annual report. Accordingly, as the market leaves the market, some transactions may be carried out between Nokia, Rostelecom and the joint venture, as well as other Russian organizations.

What kind of licenses and to whom the company turned is not specified. In November 2022, citing RBC sources, he wrote that Nokia requested export licenses from the US regulator of the US Bureau of Industry and Security (Bureau of Industry and Security; BIS) and the Ministry of Foreign Affairs of Finland for the supply of spare parts necessary to maintain the normal operation of existing networks for three years^[3].

At the same time, Nokia recommended that its Russian clients apply for technical support to the local Telesystems Service company, in which part of the Finnish company's employees moved to work.

Recall that from January 15, 2023, an order of the Ministry of Digital Science began to operate, prohibiting operators from applying for technical support for equipment to foreign and foreign-affiliated companies. Warranty and technical support, as well as modernization of "the means of communication used, should be carried out by Russian legal entities that are not under the control of foreign legal entities and (or) individuals," the^[4].

2022

Obtaining approval from the Government of Finland for the supply of equipment in the Russian Federation

The Finnish company Nokia, after two appeals to European regulators and two more American ones, received permission for an export license to supply to Russia. This was announced in early December 2022 by the CEO of MegaFon Khachatur Pombukhchan.

As RBC clarifies with reference to sources in the communications market, Nokia requested licenses for the supply of equipment to Russia from the American regulator of the US Bureau of Industry and Security; BIS) and the Ministry of Foreign Affairs of Finland. According to the interlocutors of the publication, these permits are needed for the supply of spare parts necessary to maintain the normal functioning of existing networks for three years.

Finland surrendered and allowed Nokia to supply equipment to Russia

According to information RBC, permission from the United States is necessary, since in 2016 the company transferred to the company - the freeAmerican manufacturer of equipment, Alcatel-Lucent some of the patents are also registered with local companies. A license was required from the Finnish authorities, since equipment deliveries are planned from Finland.

{{quote 'Nokia is a commercial company. They considered it possible for themselves to agree and fulfill their obligations. Ericsson, for example, did not consider it necessary to do so. The situation in which we now live will sooner or later end. And people, companies and relationships will remain, - said Khachatur Pombukhchan in an interview with RBC. }} In addition, the head of MegaFon also noted that the company is "quite seriously trying to meet halfway" and complete obligations under contracts.

In November 2022, Mobile Research Group analyst Eldar Murtazin told Izvestia that Nokia does not want to lose the Russian market. Commenting on the information that the company asked the United States and Finland for export licenses for the supply of telecom equipment to the Russian Federation, he noted that American companies can supply equipment to Russia in accordance with current sanctions.^[5]

Request for export licenses from the USA and Finland for the supply of iron to Russia

Nokia asked the United States and Finland to allow it to supply telecom equipment to Russia in order to comply with the terms of contracts concluded with companies earlier. This was announced on November 8, 2022 by RBC, citing sources in the Russian government and the telecom operator.

The telecommunications equipment manufacturer has requested export licenses for supplies to Russia from the US Bureau of Industry and Security; BIS) and the Ministry of Foreign Affairs of Finland. They are not going to supply equipment for expanding cellular networks, but spare parts that will be required to support the existing infrastructure in the next three years.

Negotiations with all customers are in the final stage, - said the source.

Special permission was needed for the reason that after the events of February 24, 2022, the United States imposed countries EU restrictions on high-tech exports to Russia. Now, in order to supply such goods, you need to obtain a special license. The permission of the American regulator of the Finnish company was required because in 2016 it entered the structure of a French-American equipment manufacturer Alcatel-Lucent and some patents were registered with local companies. However, it will not be possible to supply products without the permission of the Finnish Foreign Ministry, since the equipment will be taken from Finland.

As noted, legally local legal entities Nokia company will liquidate as they close all obligations to customers. This can take about a year after obtaining export licenses.

Sources close to Russian telecom operators note that from 2023 Nokia advises its client to use the technical support of Telesystems Service LLC (T.S.S.). Some already dismissed employees of Russian legal entities Nokia Nokia will work there^[6].

Plan for legal closure of business in Russia

In August 2022, Reuters reported that Nokia would finally cease operations in the Russian Federation. The company's official presence in the country will last until "legal closure is completed."

Tele2 demand 478 million rubles for refusal to supply equipment under the contract

Tele2, through the court, demands 478 million rubles from the Russian subsidiary Nokia for refusing to supply equipment under the contract. The corresponding application was submitted to the Moscow Arbitration Court on May 16, 2022.

According to Interfax, citing materials from the file cabinet of arbitration cases, the plaintiff in this case is T2 Mobile LLC, the defendant in the case is Nokia Solutions and Networks LLC, owned by Finnish Nokia Solutions and Networks Oy.

The press service of Tele2 explained to the agency that Nokia began to violate the terms of the contract even before the introduction of anti-Russian sanctions, the telecom company said.

We have initiated proceedings to recover fines and penalties. The lawsuit is due to Nokia's unmotivated refusal to fulfill the contract, including on orders made long before the imposition of sanctions. The company committed violations, including failure to meet delivery deadlines. At the same time, the defendant did not provide an answer to our appeals and did not try to offer any settlement options, Tele2 said.

The Russian mobile operator sued Nokia about a month after the Finnish company announced its withdrawal from the Russian market. Nokia stopped the supply of equipment to the Russian Federation and withdrew from the country activities in the field of research and design work. At the same time, Nokia announced its intention to continue supporting the operability of networks.

Valentin Makarov, president of the Russoft software developers association, believes that as a result of Nokia's withdrawal from the Russian market, prices for the company's equipment will be increased by organizing parallel imports. At the same time, in his opinion, Russia will have an incentive for accelerated development and the introduction of domestic analogues of the solutions of the Finnish company^[7].

Stopping supplies to Russia amid conflict in Ukraine, but maintaining support

On April 12, 2022, Nokia Corporation announced its complete withdrawal from the Russian market against the background of the Russian military special operation in Ukraine.

The company said that over the past few weeks, Nokia, in particular, has suspended supplies to the Russian Federation and has withdrawn research activities from the country.

However, the company intends to continue to support the operability of the networks and apply for licenses necessary to provide this support under the conditions of sanctions.

The decision is due to the concern of Western governments about the risks of failure of critical telecom infrastructure in the Russian Federation. Western countries, in particular, have stated the importance of ensuring access Internet to and continuity of the flow of information.

According to Nokia, in 2021, Russia provided less than 2% of the corporation's revenue.

Suspension of equipment deliveries to Russia

Finnish telecommunications equipment maker Nokia is suspending deliveries of its products. This became known on March 2, 2022. The reason is the special operation of Russia in Ukraine and the sanctions imposed by the United States and the European Union against Russia.

Nokia equipment was purchased by three Russian mobile operators: VimpelCom"" (trademark Beeline""), "Mobile Telesystems" () MTS and "." Megaphone In addition, Nokia has recently begun cooperation with another cellular operator - T2 Mobile (trademark). Tele2 In particular, Tele2 and Nokia worked together on test zones for fifth-generation cellular networks (). 5G

VimpelCom, Megafon and Tele2 declined to comment on this issue. The MTS press service did not respond to the request.

Usually, every major cellular operator has equipment from all major manufacturers, "the market source explained. - As a rule, the cellular operator has one or two large suppliers and additionally one or two small suppliers for bargaining with the main ones. Also, usually the operator separates suppliers by geography: one federal district - after one supplier, another - after another[8].

2020: VimpelCom has abandoned outsourcing network development and returns 1,600 technicians from Huawei and Nokia

At the end of November 2020, it became known about VimpelCom's refusal to outsource network development. The Russian telecommunications operator decided to service its infrastructure on its own and for this returns employees who previously moved to Huawei and Nokia. Read more here.

2019

Signing a memorandum on the establishment of the Center for Innovation and the Internet of Things in Healthcare in Russia

On June 6, 2019, a memorandum was signed between the international biopharmaceutical company AstraZenek, the Skolkovo Foundation, Nokia companies, Factory of Radiotherapy Technology LLC (R-Pharm group of companies), Russian Post, Sberbank on the creation of a Center for Innovation and the Internet of Things in Healthcare on the basis of the Fund, which is planned to open in October 2019. Read more here.

The first 5G call together with MegaFon and Rostelecom

On June 5, 2019, MegaFon announced that, together with Rostelecom and Nokia, they held an international video call in Russian 5G networks connecting the northern capital and Helsinki. Read more here.

Nokia will transfer the rights to its technologies to the Russian company for the first time

On May 7, 2019, it became known that Nokia would transfer the rights to its technologies to a Russian company for the first time. Access to intellectual property and source codes of some types of telecommunications equipment Nokia will receive "RTK-Network Technologies" - a joint venture of Nokia with Rostelecom. Read more here.

Joint testing of IoT solutions for housing and communal services with Tele2 and Rostelecom

On April 15, 2019, Tele2 announced that, together with Rostelecom and Nokia, it tested solutions based on the Internet of Things (IoT) for housing and communal services. The tests took place in Moscow on the basis of the Tele2 LTE network. The technology will allow energy sales companies to reduce the cost of data collection, and users to conveniently pay for electricity. Read more here.

2015: Falling revenue

On February 11, 2016, Nokia published its annual financial report, from which it follows that the profit of the Finnish company has more than halved. The vendor noted a drop in sales in Russia.

Nokia reported that in October-December 2015, the company's revenue in Europe fell by 7%, largely due to a decrease in sales in Russia and Italy. At the same time, in Ukraine, the vendor watched the growth of business. Nokia did not give specific indicators of activities in Russia and Ukraine in its report.

2012

Key areas of activity

Nokia products are classified into three main divisions:

• Mobile Phones - classic mobile phones;
• Multimedia - Nseries multimedia computers;
• Enterprise Solutions - Eseries business class devices and special software.

Nokia Authorized Points of Sale Program

In 2012, together with retail chains in Russia and the CIS, Nokia actively develops the Nokia Authorized Points of Sale program, which opens Concept Stores and Shop-in-Shops Nokia. The main purpose of this program is to protect consumers from counterfeit and uncertified goods. When buying Nokia products in a branded salon or store, as in all authorized points of sale, the consumer is guaranteed that he acquires an original, officially delivered product with all the necessary service support. Nokia branded departments and salons are open in most large cities of Russia and the CIS, and their number is constantly increasing.

Who was part of the company's PR team in Russia

As of June 2012, Nokia's PR team included:

• Aleksandr Pakhotenko, Nokia Social Media Manager in Eurasia
• Tatyana Oberemova, Nokia Public Relations Manager in Russia
• Andrey Orlov, Communications Manager in Eurasia (Ukraine, South CIS, Turkey)

AGT Communications Group Agency (Pavel Vorobyov).

2011

1.84 billion euros - sales in Russia in 2011 (+ 5.7 %)

In March 2012, Nokia published reports for 2011, in which it disclosed absolute sales figures in various regions. As follows from the document, 52% of Nokia's revenue in 2011 was brought by 10 countries, including Russia.

In Russia, the company earned 1.84 billion euros for the year, which is about 5.7% more than in 2010. At the same time, the growth rate of revenue slowed down: in 2010 they amounted to 14%. The share of Russia in total Nokia sales has also grown slightly - from 4.1% to 4.7%.

Among the dozen countries that brought Nokia the most revenue, Russia ranked fourth for the second year in a row. In 2009, she took the sixth position. At the same time, of these dozens, only in Russia, Brazil and Japan, the company's sales in 2011 showed positive dynamics - in other countries they decreased.

Q2: Market share in Russia continues to decline

In the second quarter of 2011, Nokia's share in the Russian smartphone market continued to fall. If you look quarterly, starting from the IV quarter of 2010, the dynamics are as follows: 57, 52, 41% - this is in money and 71, 65, 52% - in pieces^[9]. These are the data of Svyaznoy. Euroset has similar ones: 41% against 47% in monetary and 62% against 63% in piece terms (I quarter of 2011 to I quarter of 2010). MTS also agrees: Nokia's share is declining, in physical terms in the first half of the year it amounted to 55%, says the operator's representative Valery Kuzmenko.

What Nokia is losing is being taken away by Samsung. According to Svyaznoy, Samsung's share in the first half of the year increased from 8% (Q4 2010) to 23% (Q2 2011) in monetary terms. Nokia gives way primarily to Samsung, says Kuzmenko: the Korean manufacturer releases more new models and relies on a more modern Android operating system, while Nokia uses Symbian.

At the same time, Nokia remains the leader both in the Russian smartphone market and in the phone market as a whole. At the latter, she even increases her share in physical terms. According to Svyaznoy, in the first half of 2011 Nokia had 41% of the telephone market against 38% for the same period in 2010. MTS estimates Nokia's share at 42%.

Kuzmenko and the representative of Svyaznoy Elena Nogotkova explained this by good sales of budget Nokia models. Nokia pays a decrease in the price of devices for maintaining its positions: in the first half of 2011, they fell by 24% (compared to the end of the second half of last year), Nogotkova notes.

According to Euroset, Nokia's share in monetary terms in January - May 2011 was as follows (monthly): 43, 47, 44, 43, 41% - if it does not fall, it definitely does not grow.

Nokia's problem is in the shortage of iconic new products, as well as in the short line of devices in all price categories compared to Samsung, for example, IAA Telecomdaily CEO Denis Kuskov believes. The situation on the Russian smartphone market for Nokia may unfold in 2012, when phones on the new Microsoft Windows Mobile 7 platform for Nokia go on sale, he suggests.

2005

December 9, 2005 in Russia opened the world's first flagship store Nokia (Nokia Flagship Store) - in the center of Moscow, not far from Pushkinskaya Square.

1997: Creation of ZAO Nokia with its head office in Moscow

In 1997, ZAO Nokia was established with its head office in Moscow.

1993: Starting a business in Russia with an office in St. Petersburg

Since 1993, Nokia's interests in St. Petersburg have been represented by Nokia Switching Systems (NSS).

1960s: Beginning of activity in the USSR

Nokia Corporation began operations in the USSR in the 1960s.

Notes