Nokia shares have jumped 5.5 per cent to the highest level this year after the rate of decline at its core networks business slowed sharply in the first quarter of the year.

The Finnish company’s networks division declined 6 per cent to €4.9bn in the first three months of the year which is typically its weakest quarter.

Yet that was a much improved performance on the fourth quarter of 2016 when it shrank 14 per cent. Overall sales dipped 4 per cent to €5.4bn in the quarter. Its pre-tax loss widened to €64m due to higher taxes related to the acquisition of Alcatel-Lucent.

Rajeev Suri, chief executive, said that the arresting decline was the result of cross-selling between the Nokia and Alcatel-Lucent bases after the integration of the two companies as opposed to signs of a market recovery.

“We are not declaring victory yet but its a great start to the year,” he said.

Growth at its Nokia Technologies business which comprises a huge patent portfolio, the Withings consumer health technology brand and new products in the virtual reality market, grew 25 per cent in the quarter.

That unit has licensed the Nokia brand to Finnish business HMD to relaunch Nokia mobile phones but the performance was boosted more by a one-off licence payment. Mr Suri said there had been no progress on settling litigation with Apple over a patent dispute.

The company also changed its reporting lines to carve out a new unit called Global Services – not to be confused with BT’s problematic division – that will house its cloud and managed services operations as opposed to network sales.

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