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Rajeev Suri, chief executive of Nokia, has said he expects the tough market conditions that have plagued the telecoms equipment sector to “stabilise” in 2017 as the benefits of the Finnish company’s merger with Alcatel-Lucent feed through.

The Nokia boss said the market environment would also be improved by the fact rival Huawei is looking to improve its profitability, making the pricing environment for the market less painful.

The comments came after Nokia said fourth quarter earnings dropped 27 per cent in the fourth quarter from the same period the previous year to €940m, beating analyst expectations of a fall to €788m.

Stabilisation did not mean growth, however. Mr Suri said “stability” looked like low single-digit declines in Nokia’s core networks division.

But Mr Suri predicted a return to revenue growth in 2018 when sales from what he dubbed ‘adjacent markets’ such as digital health and transport becoame meaningful.

The Nokia boss said there were already signs that cross-selling between Nokia and Alcatel-Lucent customers was starting to gain traction. He said that without that merger, Nokia would have been an “isolated asset with a niche portfolio”.

Nokia shares bounced 4 per cent in Helsinki.

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