The Swedish technology firm, Ericsson and the Finnish company, Nokia are forced to scale back their investments in 5G networks after the interest rate hikes.
Ericsson recently reported a rare net quarterly loss and Nokia lowered its outlook.
The news sent the shares of both companies down as much as nine percent on the Helsinki and Stockholm exchanges before trimming their losses, according to the AFP via the Digital Journal.
Chief executive of the Swedish company, Borje Ekholm said, “We are confident that the market will recover” as three-quarters of base stations outside China have yet to update to 5G and “Ericsson is well positioned to benefit from increased investments.”
While Nokia did not express as much confidence in a rebound in the second half of 2023.
“Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 –- notably in North America,” Nokia said in a statement.