Nokia has lowered the bar for its profit forecast from its sales until 2026. This is the result of the recent loss of telecom operator AT&T as a customer. However, the network giant did announce that it had won Deutsche Telekom as a new customer.
Nokia adjusted its profit forecast from its sales, the so-called operating margin, to 2026. Whereas previously, an operating margin of 14 percent was expected, it is now set at 13 percent or less. For the years following 2026, the partner for communication service provider does expect to meet the previously expected operating margin of 14 percent or above again.
Mobile network segment in decline
Nokia cites the current unfavourable state of affairs in the mobile network segment as the main reason for this lower revision. Adverse times are sensed for this segment over the next two years. One reason is the loss of AT&T as a customer.
AT&T recently announced that it had not chosen Nokia to provide an Open Radio Access Network (ORAN) environment. The Finnish network giant lost the contract to Sweden’s Ericsson. For Nokia, this is obviously a major blow, as it is left with T-Mobile USA as its sole operator customer in the U.S.
The disappointing mobile network revenues led Nokia to make substantial cost cuts within this market segment. This also leads to job losses. Back in October, the company announced it would cut up to 14,000 jobs by 2026.
Deutsche Telekom new customer
The company can cover a part of the costs with a newly won contract. Nokia managed to sign up Deutsche Telekom as a new customer again for the rollout of an ORAN network.
In 2017 Nokia lost this customer, but Deutsche Telekom is now returning. The rollout of this network for the German telecom giant is already underway and will be further expanded from 2024 on.
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