Nokia might be highlighting brighter days ahead, but its immediate outlook remains cloudy as it continues to navigate regional-based operating challenges and volatility in its fixed-wireless access (FWA) business.

The vendor posted disappointing second-quarter results that were somewhat softened by recent warnings. The disappointment included flat revenues compared with the same quarter last year, a dip in gross and operating margins, and a 37% plunge in profits for the quarter.

Nokia CEO Pekka Lundmark spun those numbers the best he could, noting the carrier achieved those results despite a softening market.

“We highlighted in Q1 that we were starting to see signs of the economic environment impacting customer spending. And already in the second quarter, we saw some of those signs materializing as it started to impact our sales outlook also in network infrastructure,” Lundmark said during prepared comments as part of Nokia’s earnings call. “But we still achieved flat year-on-year sales in the quarter as we continue to benefit from market share growth.”

As it had warned, Nokia’s biggest headwind came from the North America market. CFO Marco Wiren stated North America revenues dropped 40%, “a result of declines across all business groups as inventory digestion continued and [communication service providers] reevaluated their spending plans.”

This has been expected as all of the major North American operators have stated plans to begin cutting capex as they wrap up their initial 5G deployments.

Lundmark countered the drop by stating he feels these operators will need to continue to invest in their networks in order to meet growing data demand from consumers.

“If simply the data traffic continues to grow, operators -- if they want to stay in the business -- will have to continue to invest,” Lundmark said. “And this is the reason why we believe that this slowdown in investments in some parts of the world, especially in North America, has to be primarily a question of timing because if one particular operator would not continue to invest, their competitors would.”

Nokia also noted “new funding opportunities” in the United States that will help pay for operators to fund needed network investments.

Conversely, Nokia is seeing outsized growth from India. The vendor is in the midst of a substantial 5G buildout program in that country, that includes gaining market share from competitor Samsung. However, Lundmark did admit that the current level of growth in India was not sustainable.

“Three-hundred-and fifty-five-percent growth is not something that you should expect to continue forever. It has been an incredible growth period in India,” Lundmark said. “The investments continue but we would expect there to be the moderation in the second half, and the overall result, I guess, will be that 2023 will be an exceptional year in India for sure. We will see some normalization in 2024.”

Lundmark also stated that Nokia’s FWA business has run into some market challenges, specifically tied to the vendor being “highly sensitive to a very small number of customers.”

“Especially in North America, now when those deployments are significantly more slow, there is inherently some volatility here,” Lundmark explained.

Operators remain high on FWA’s potential, a feeling bolstered by analyst firms that are predicting significant market growth over the next several years. However, some have also noted the financial tightrope operators will need to walk in order to make those FWA investments pay off.

Nokia’s private wireless business appears to be less volatile as Lundmark stated the vendor ended the last quarter with more than 635 private wireless customers. That works out to solid growth compared to the 595 customers he claimed the vendor had at the end of Q1.

Rivals have claimed Nokia is one of the biggest players in the private network space. Analyst firms have noted that the broader market is starting to slow, but it still remains a multi-billion-dollar opportunity over the next several years.