Nokia has reported a double-digit decline in sales and a fall in profit in the last three months of 2023, with the wireless and fixed-network equipment maker saying operators are cutting back on investments into 5G and other technology because of economic uncertainty.
The Espoo, Finland-based company reported net profit of 568 million euros (£485 million) for the October-to-December quarter, down from 929 million euros (£794 million) in the same period a year earlier.
Nokia is one of the world’s main suppliers of 5G, the latest generation of broadband technology, along with Sweden’s Ericsson, China’s Huawei and South Korea’s Samsung.
Nokia’s net income attributable to shareholders came in at 558 million euros (£477 million) in the fourth quarter, down from 931 million euros (£796 million) the previous year.
Nokia’s sales also fell 23%, to 5.7 billion euros (£4.8 billion) from 7.5 billion euros (£6.4 billion).
Chief executive Pekka Lundmark said in a statement: “In 2023, we saw a meaningful shift in customer behaviour impacting our industry, driven by the macro-economic environment and high-interest rates.”
He also pointed to the effect of Nokia’s clients such as telecom operators that have already bought new equipment and do not intend to get more.
“Looking ahead, we expect the challenging environment of 2023 to continue during the first half of 2024, particularly in the first quarter,” he said.
“However, we are now starting to see some green shoots on the horizon” including improved order intake for Nokia’s network infrastructure unit.
In October, Nokia announced plans to cut up to 14,000 jobs to reduce costs.
It said the measure was needed to enable Nokia to navigate in a weak market environment where low economic growth and high-interest rates have put investments by clients on hold.
Other tech companies, such as online retailer eBay, are laying off workers and have pointed to the challenging economy, which has slowed following rapid interest rate hikes unleashed by central banks around the world to combat soaring inflation.
