Finnish telecoms group Nokia said on Saturday it will miss its financial targets for this year because it cannot count on revenue from license renewal talks expected to continue for much of next year.
Nokia said its full-year outlook calls for the completion of rolling license renewals at Nokia Technologies, its technology unit. The company has not provided any information about the nature of these licenses and with which parties it is negotiating renewals.
Nokia did not immediately respond to a request for comment.
Nokia said it expects negotiations to be concluded by the end of the year and a settlement to come in 2024, which will benefit its financial results next year.
Backed by more than €140 billion invested in research and development, Nokia’s patent portfolio consists of approximately 20,000 patents, including more than 5,500 declared essential for 5G. Earlier this year, Nokia signed a new long-term patent license agreement.
long-term patent license
with Apple, with the current license between the two companies expiring at the end of 2023.
A slowdown in sales of 5G devices in key markets such as North America has also cut into the company’s profit margins.
Earlier this month, AT&T chose Ericsson to build the telecom network, bringing Nokia’s stake to an all-time low. The five-year deal, worth $14 billion, will increase Ericsson’s stake in one of the world’s largest telecommunications players and erode rival Nokia’s presence in the North American market.
Nokia, which reported a 20% drop in third-quarter revenue, said it may not meet its full-year targets for 2023 net income, comparable operating margin and free cash flow.
The company said net sales for Nokia’s network business are expected to show a significant sequential improvement in the fourth quarter. It is expected to present quarterly and annual results on January 25.
In October, the network equipment manufacturer
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The networking equipment maker cut up to 14,000 jobs in October to cut costs, but did not change its outlook for the full year.
Nokia forecasts 2023 net revenue between €23.2 billion ($25.60 billion) and €24.6 billion. By 2026, it aims to save between 800 million euros and 1.2 billion euros.
($1 = 0.9061 euros) (Reporting by Mrinmay Dey in Bengaluru; Editing by Leslie Adler and David Gregorio)