China remains ahead of Latin America in net revenue generation for Nokia, as both regions in different geopolitcal contexts posted another quarter of declining sales for the Finnish supplier.
Overall, Nokia’s Q3 earnings beat market estimates despite ongoing weakness in its mobile networks business. The company’s global net sales reached 4.83 billion euros (US$5.6bn), up 12% from 4.32 billion euros in the year-ago quarter, or 9% higher in constant currency and adjusted for portfolio changes.
“Order intake was again strong, particularly in optical networks and IP networks driven by AI and cloud customers,” CEO Justin Hotard told analysts and investors.
In Latin America, sales fell for another quarter, down 9% to 201mn euros. For the January-September period, revenue in the region declined 11% to 540mn euros.
In China, Nokia posted a 13% quarterly decline and a 17% drop for the nine-month period, reaching 225mn euros and 661mn euros, respectively. The Greater China region saw declines mainly in mobile networks, said the company.
Unlike Latin America, China is effectively phasing out European telecom equipment from its networks.
Nokia’s business in China has seen a sharp decline due to geopolitical tensions, stricter national security reviews and a government push for technological self-reliance that favors domestic suppliers such as Huawei and ZTE.
During the earnings call, Hotard downplayed the issue and said that approximately 70% of 5G standalone core network deployments outside China use a portion of Nokia’s 5G core stack.
“The revenue in China has come down massively over the last few years. The reality is it’s a fraction of our revenue today, and our market share is fractional in mobile networks in China. It’s not a core market for us.”
“So the communications from the government, obviously, we follow those closely. We respect and support their decisions. And the reality for us is we’re going to focus on markets where we believe there’s significant opportunity and customers where we believe we can collaborate and innovate,” the CEO added.
Hotard did not mention Latin America directly. The region accounts for only 4% of Nokia’s total revenue, the smallest slice among all geographies.
Globally, a key highlight for the network infrastructure business was the AI and cloud customer segment. In Q3, this segment accounted for 6% of Nokia’s net sales. “Breaking it down, it was 14% of our network infrastructure business, and more specifically, 29% of optical networks,” said the executive.
In its financial report, Nokia said that in the Americas, the AI and cloud customer segment showed strong growth in North America and a slight decline in LatAm.
Following the solid Q3 results and continued strong order intake, Hotard said Nokia remains on track to meet its full-year outlook.
(The original version of this content was written in English)
