Nokia India experienced a significant decline in net sales, reporting a 68% year-on-year drop to 329 million euros
Nokia India experienced a significant decline in net sales, reporting a 68% year-on-year drop to 329 million euros in the April-June quarter, primarily due to reduced 5G investments by the country’s leading telecom operators
Nokia’s decline notably affected the Finnish telecom gear maker’s overall financial performance, with net sales falling 18% year-on-year in constant currency. Nokia’s president and CEO, Pekka Lundmark, attributed the sharp decline to the comparison with the previous year’s peak in 5G deployments in India, which accounted for three-quarters of the decrease. He noted the ongoing market weakness as a contributing factor. Nokia’s Mobile Networks segment saw a 24% decline in net sales, mainly driven by the situation in India. North America benefited from resolving a contract negotiation with AT&T. Meanwhile, Cloud and Network Services’ net sales dropped by 16%. In the third quarter, Nokia expects to show the impact of its recent agreement with Vodafone Idea, which involves settling outstanding dues and converting them into an equity stake.
Vodafone Idea’s shareholders approved this transaction in July, with the equity stake subject to a six-month lock-up period. Similarly, Nokia’s European competitor Ericsson reported a 44% year-on-year decline in sales for the Southeast Asia, Oceania, and India market region in the June quarter, mainly due to a significant reduction in operator capex investments in India. It follows a year of record-high investment levels in 2023, with India’s contribution to Ericsson’s global sales dropping from 14% in 2023 to 6% in the second quarter of 2024. Nokia and Ericsson have been impacted by the completion of pan-India 5G deployments by Reliance Jio and Bharti Airtel. Despite this, both companies actively seek new 4G and 5G equipment orders from Vodafone Idea, which plans to expand its network following a successful follow-on offer in the coming months.
[Image Source: CNBC]
