Nokia experiences significant drop in sales during January-March due to sluggish demand for 5G technology.

Nokia, a wireless and fixed-network equipment manufacturer, reported a smaller-than-expected profit and a significant decrease in sales in the first quarter of the year. This drop was attributed to a market that was weakened by clients failing to invest in 5G technology. The company’s net profit for the period was reported at 501 million euros, an increase from 342 million euros the previous year, yet below analysts’ expectations.

Contributing to Nokia’s profit were one-off gains from its licensing business. Despite an increase in net income, sales were down by 20% at 4.7 billion euros. The telecom equipment market continues to face challenges as operators cut back on investments in new technology like 5G due to economic uncertainty and high financing costs.

Nokia’s CEO, Pekka Lundmark, acknowledged the ongoing weakness in the market. However, he expressed confidence in a stronger second half and in achieving the company’s full-year outlook. Nokia is a key player in the 5G industry, alongside competitors like Ericsson, Huawei, and Samsung.

The company is hopeful for growth in its Network Infrastructure business unit for the full year, despite challenges faced by its mobile network unit due to low spending in 5G technology in North America and India. Lundmark remains positive about the business’s prospects for the future.