Nokia and Ericsson Also Withdraw from Russian Market... Huawei Faces Dilemma Over Market Share Expansion

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Finnish telecommunications company Nokia and Swedish telecommunications company Ericsson have announced their complete withdrawal from the Russian market. As Chinese companies such as Huawei are expected to gain a monopolistic position in the entire Russian telecommunications market, Huawei is reportedly cautious about expanding its market share due to concerns over additional sanctions from the US and the West.

According to foreign media including CNBC on the 12th (local time), Nokia stated in a press release, "Due to Russia's invasion of Ukraine, it has become difficult to continue business operations in Russia," but added, "However, existing network services will be maintained on a humanitarian basis." Nokia is reportedly planning to withdraw all equipment and personnel stationed at its Russian branches over the coming months.

Ericsson also announced on the same day, "We will suspend operations indefinitely in Russia and plan to provide paid leave to employees at the Russian branches." Earlier, Ericsson had announced plans to withdraw from the market by completely halting shipments to Russia immediately after Russia's invasion of Ukraine on February 24.

According to the UK Financial Times (FT), Nokia and Ericsson each held about a 20% market share in the Russian telecommunications equipment market. With both companies announcing their business withdrawal while promoting 5th generation communication network (5G) projects in Russia, it is expected that Chinese companies including Huawei will secure contracts not only for 5G construction but also for mobile communication network businesses within Russia.

However, Huawei is reportedly showing caution in expanding its market share within Russia. According to the US economic magazine Forbes, Huawei recently sent some employees working at its Russian branch on a one-month leave. Huawei initially announced plans to sell its Russian branch to a Russian company and withdraw immediately after Russia's invasion of Ukraine, but withdrew this plan after US and Western sanctions prohibited the sale of the company.

Forbes analyzed, "Due to sanctions against Russia, products containing US technology or components cannot be sold in Russia, so the Russian export market must be reorganized focusing on Chinese self-developed models," adding, "Last year, Huawei's sales decreased by more than 50% compared to the previous year due to US sanctions, so it will not be easy to expand market share by violating sanctions against Russia."

This content was produced with the assistance of AI translation services.