Nokia Moves Headquarters to St. Petersburg

ST. PETERSBURG — Nokia Network Russia has announced a change in its corporate priorities, with greater emphasis to be placed on the St. Petersburg cellular telephone systems market.

A company press release issued last week said that its headquarters will be moved from Moscow to St. Petersburg, allowing the firm to pursue more effectively the development of their business in Russia’s northwest region.

Nokia Network Russia sells equipment to cellphone service providers in Russia, and its two largest customers in the region are North-West GSM and Delta Telecom, both in St. Petersburg.

"The Nokia Network staff will move their offices from Moscow to St. Petersburg, while Moscow-based jobs will be found for workers remaining in the capital," Nokia Network general director Veli Laine said in the release. "These changes will not affect other Nokia activities in Russia. Nokia Mobile Phones, which works as a distributor in the Russian market, will continue its work in Moscow."

Analysts said that the company’s shift to St. Petersburg might have been more the result of necessity than choice.

According to business daily Vedomosti, cellular operators providing services in Moscow already use equipment purchased from Nokia competitors: Vimpelcom uses equipment purchased from Alcatel, Mobile TeleSystems from Motorola and Siemens, and Moscow Cellular Systems from Ericsson.

Nokia’s hopes to establish a place for itself in the capital’s telecoms equipment market were dashed when Ericsson signed a contract with new Moscow cellular operator Sonic Duo, which is a daughter company of Sonera, Vedomosti reported this week. According to the contract, Ericsson will supply equipment to Sonic Duo worth $100 million.

Anton Pogrebinsky, telecoms analyst at J’son and Partners, said the value of the contract will probably reach about $300 million.

"It makes more sense to me that Nokia is leaving because they didn’t get the [Sonic Duo] contract," Pogrebinsky said. "And, since their plans to pick up that revenue fell through, Nokia is trying to reduce its expenditures by moving closer to its basic clients."