Nokia, a leading provider of wireless and fixed-network equipment based in Espoo, Finland, has reported lower-than-anticipated profits and a significant decline in sales for the first quarter. The company’s CEO, Pekka Lundmark, attributed this decline to the lack of investment in 5G technology by clients across the industry.
Despite posting a net profit of 501 million euros for the January-March period, which was up 46% from the previous year, analysts had expected even higher results. Nokia’s licensing business contributed to some of this growth. However, sales were down 20% at 4.7 billion euros.
Lundmark acknowledged that operators are cutting back on investments in 5G technology due to ongoing economic uncertainty and regulatory challenges. Despite these challenges, he expressed confidence in achieving their full-year outlook and a stronger second half of the year.
Nokia is one of several key suppliers of 5G technology facing competition from companies like Ericsson, Huawei, and Samsung. Lundmark highlighted that the mobile network unit was impacted by low spending on 5G technology in North America and India during the first quarter. However, he remains optimistic about growth prospects for the Network Infrastructure unit for the full year of 2024.
Overall, Nokia’s first quarter results highlight the need for continued investment in emerging technologies like 5G if companies want to stay competitive in an increasingly crowded marketplace. As Lundmark put it: “We need continued improvement in order intake to support a more robust performance.”
