Finnish telecoms equipment supplier Nokia reported a 9 per cent rise in operating profit in the third quarter due to cost cutting, according to Reuters.
Nokia also echoed rival Ericsson in seeing demand recovery in some areas. However, quarterly net sales fell 8 per cent to €4.33 billion ($4.70 billion) due to lower sales to India. As a result, the company’s shares fell 3 per cent.
Both Nokia and Ericsson said North America started showing signs of growth after years of weakness, but Nokia’s market share in the region fell after years of losing contracts with Verizon and AT&T, according to CEO Pekka Lundmark.
We have seen a really bad cycle… Now that decline is over and it is starting to gradually recover, which is good, but it (telecom) will never be a huge growth market. North America has started to show pretty good signs, and we had strong growth in Q3 in network infrastructure.
Nokia’s total market size in telecoms stands at around $84bn. To achieve the growth, the company allocated $2.3 billion to buy US optical network equipment maker Infinera in June.
That’s where the growth will come from, and that growth is starting already.
Demand from Indian customers is also recovering after Nokia secured a major contract from Vodafone Idea last month. The company is expected to get another one from Bharti Airtel.
India will return back to growth next year.
Nokia maintained its full-year profit forecast at 2.3-2.9 billion euros. However, the company said it was currently in the lower half of that range.
