Nokia reports 33% decline in net sales in India in Q4, cites slowdown in 5G deployments

Pekka Lundmark

Finnish telecom equipment manufacturer Nokia reported a 33 percent decline in net sales in the Indian region, amounting to 379 million euros in the October-December period of 2023. In comparison, the net sales for the same period in 2022 stood at 568 million euros. The slowdown in 5G deployments by Indian telecom operators is cited as a key factor contributing to this decline in sales for Nokia.

“India saw a decline in the quarter, primarily in Mobile Networks, reflecting that the significant 5G deployments which started in the year-ago quarter have normalised. In addition, there were declines in Network Infrastructure in both Optical Networks and Fixed Networks,” Nokia said in its Q4 earnings statement on January 25.

For 2023, Nokia’s net sales in India surged 120 percent to 2.8 billion euros from 1.29 billion euros in 2022. Nokia follows the January-December financial year.

Pekka Lundmark, president and CEO of Nokia, said that the gearmaker expects the challenging environment of 2023 to continue during the first half of 2024, particularly in the first quarter.

“In Mobile Networks, we expect top-line challenges in 2024 related to a more normalised pace of investment in India and the AT&T decision. We expect further improvement in gross margin, and then in the second half, we will see more benefits from our cost savings programme,” Lundmark said.

Nokia reported a 27 percent drop in fourth-quarter operating profit. Comparable earnings before interest and tax (EBIT) fell to 846 million euros from 1.15 billion euros a year earlier.

He added that Nokia is starting to see some green shoots on the horizon, with improving order intake for Network Infrastructure and some of the specific deals it has won.

“This is expected to drive a strong improvement in Network Infrastructure net sales growth in the second half of 2024, which we believe, even with a challenging first half, will drive solid growth for the full year,” he added.

The top executive said that Nokia expects to deliver a comparable operating profit between 2.3 euros and 2.9 billion euros in 2024. “We also target to deliver an improved free cash flow performance with the conversion of between 30 percent and 60 percent.”

Swedish telecom gear maker Ericsson said on January 23 that its sales in India fell almost 40 percent sequentially in the fourth quarter as the market moved to normal investment levels following an unprecedented rollout pace.

Ericsson’s sales, however, grew 14 percent from the year-ago period due to 5G contracts, the company said on January 23. The Indian telecom market is seeing aggressive 5G rollouts by private telecom operators.

The Swedish company said a reduction in capex investments in India was expected at the beginning of 2024 but occurred earlier than anticipated.