Finnish vendor Nokia cut its long-term profitability target in response to current market conditions impacting its Mobile Networks business, a week after AT&T handed rival Ericsson a $14 billion open RAN contract.

In a statement released ahead of a company investor event, Nokia provided an update on group strategy, which includes initial planning assumptions for 2024 and targets for 2026.

The biggest headline comes with its decision to lower its comparable operating margin target to be achieved by 2026 to at least 13 per cent, down from a prior guidance of at least 14 per cent.

Nokia explained it still sees a path of achieving at least 14 per cent, but considering the current market conditions “this is deemed a prudent change”.

The company added its Mobile Networks business will face challenges in 2024 and 2025 “before returning to grow faster than the market in 2026″.

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Nokia indicated last week its revenue from AT&T would decrease over the next two- to three-years, after Ericsson won the deal to lead the US operator’s open RAN deployment.

To make up for the loss, Nokia said it would focus on selling its Mobile Networks services to fast-growing segments including enterprise, cloud and open RAN, and the defence sector.

Other financial goals are unchanged, with the company stating it is expecting “good progress” towards long-term growth targets for the rest of its business groups.

Defence deal
Separately, Nokia announced it struck a deal to acquire Fenix Group, a company which specialises in 3GPP-compliant communications products for the defence sector.

Tommi Uitto, president of Mobile Networks, said the proposed deal would help Nokia grow its defence business and “create a more stable world with high-performance, secure and reliable communication solutions”.

Financial details were undisclosed.