The Pak Banker - - COMPANIES/BOSS -

Fin­nish tele­com gear maker Nokia warned that de­mand for new mo­bile net­works would slow this year in China and said it would not give a fi­nan­cial out­look un­til April fol­low­ing its ac­qui­si­tion of Al­ca­tel-Lu­cent. The 15.6 bil­lion euro deal helps Nokia to com­pete with Swe­den's Eric­s­son and China's Huawei pre­vi­ously the world's top two sup­pli­ers of net­work gear, in a mar­ket where lim­ited growth and tough com­pe­ti­tion are pres­sur­ing prices.

Nokia CEO Ra­jeev Suri said the com­pany ex­pected mar­ket growth this year in North Amer­ica, In­dia, the Middle East and Africa, while fast grow­ing China will cool down. "We do ex­pect some mar­ket head­winds in 2016 as 4G/LTE roll­outs in China and some other mar­kets start to slow," Suri said. "The first quar­ter, in par­tic­u­lar, looks quite chal­leng­ing as cus­tomers as­sess their CAPEX (spend­ing) plans in light of in­creas­ing macroe­co­nomic un­cer­tainty." Nokia shares were down 3.5 per­cent by 0920 GMT and have fallen about 30 per­cent since the an­nounce­ment of Al­ca­tel deal last April. "They didn't give any fi­nan­cial guid­ance for this year, and all they said about the out­look was that the (net­works) mar­ket de­mand looks rather weak. This is a bit like walk­ing in fog," said Mikael Rau­ta­nen, an­a­lyst at In­deres Equity Re­search, who rec­om­mends in­vestors re­duce their hold­ings in the stock. Nokia and Al­ca­tel's com­bined sales for 2015 year give the merged com­pany a claim to be the world's big­gest mo­bile net­work sup­plier, but cost-cut­ting and elim­i­nat­ing over­lap will likely rel­e­gate it to se­cond place be­hind Eric­s­son. Nokia's fourth-quar­ter group sales fell 3 per­cent in con­stant cur­rency terms to 3.61 bil­lion euros ($4.08 bil­lion), below an­a­lysts' av­er­age ex­pec­ta­tion of 3.72 bil­lion euros. But op­er­at­ing profit mar­gin in the net­works unit came in at 14.6 per­cent, up from 14.0 per­cent a year ear­lier and 13.8 per­cent in the poll. Sep­a­rately, Al­ca­tel-Lu­cent re­ported fourth-quar­ter sales growth of 13 per­cent to 4.16 bil­lion euros, with busi­ness per­form­ing par­tic­u­larly well in Asia and North Amer­ica.

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