Supantha and Anna Mukherjee

STOCKHOLM, (Reuters) – Ericsson (BSS:) has suspended its Russian business and placed employees on paid leave six weeks ago after Ericsson started a review on the effects of Western sanctions.

On Monday, the company stated that it would make a provision for the impairment of assets in the first quarter at 900 million crowns (95 million dollars).

According to a spokesperson, Ericsson employs around 600 people in Russia.

Hundreds of Western companies have either withdrawn https://som.yale.edu/story/2022/over-600-companies-have-withdrawn-russia-some-remain or suspended operations in Russia since the country invaded Ukraine in February while Western governments have imposed sanctions.

Russian President Vladimir Putin ordered his troops to enter Ukraine as part of a special military operation. This was to “denazify and demilitarize” Ukraine. According to the West, Putin declared an unprovoked war on aggression against Ukraine.

Ericsson had stopped deliveries to Russia customers in February. Nokia, a rival company (NYSE:) made the same decision in March.

Paolo Pescatore from PP Foresight said that the move was unavoidable because of a series of sanctions. It will strike a blow at both Ericsson & Nokia, as the networks will no longer be funded.

Ericsson will be affected by the suspension as Russia last year said it would grant telecom operators licences for the next 2023 to build networks under the condition they use only Russian equipment.

Ericsson doesn’t have manufacturing plants in Russia. Instead, its European manufacturing hubs are situated in Estonia or Poland.

Nokia announced in November plans to form a joint venture in Russia with YADRO (a Russian leader in the development and production of high-performance storage systems and servers) to develop 4G and 5G base stations for Russia’s telecom networks.

Nokia released a statement saying that the company has stopped deliveries to Russia and complies with any restrictions or sanctions.

“Nokia will not continue R&D in Russia and we have already started the process of transferring R&D tasks outside of Russia,” the company said.

($1 = 9.4568 Swedish Crowns

This version corrects the name of an analyst’s company at paragraph 7 to PP Foresight and not PP Insights.