Russian newspapers report Huawei is scaling back operations in the country to avoid U.S. sanctions.

Huawei supplies networking equipment, handsets, and more to the Russian market. According to Business Insider and Forbes Russia, Huawei is not taking new contracts and has furloughed employees working in the region through April.

The news follows similar announcements this week from Ericsson and Nokia. Intel announced it was pulling out of the country last week. More than 600 companies have stopped doing business with Russia according to data from Yale University’s School of Management. 

Like Ericsson, Huawei has a strategic relationship with Russia’s largest mobile communications provider MTS. The Chinese giant’s gear is deeply embedded in Russia’s 4G and 5G networks.

“Huawei, in addition to Nokia and Ericsson, pulling out of Russia is effectively putting network rollout, regardless if 4G or 5G, on hold, and will over time degrade the networks as equipment [starts to fail with age],” Roger Entner, founder and lead analyst of Recon Analytics, told SDxCentral.

“Huawei limiting this until April is playing on time, placating both the EU and leaving hope for Russia. Everyone is looking towards May 9 as a critical day in the war – Russia celebrates it as the Victory Day over Fascist Germany – and all indications are that Russia wants to end the war in Ukraine by that day,” said Entner, adding. “After May 9, all bets are off.”

The company’s Russian subsidiary, Tekhkompaniya Huawei, saw revenue reach nearly $1.5 billion (128 billion Russian rubles) in 2020, according to Statistica. “To compare, the annual revenue of Apple Rus LLC amounted to 266.3 billion Russian rubles in 2020,” noted Statistica’s data.