David Mulholland: Did you have a follow-up?
Richard Kramer: Yes, very quickly. For Marco, you’re coming up at the end of June to sort of the extended contractual agreement with Nokia Shanghai Bell. Can you give us a sense by the time you report next time, you’ll have to have concluded that where you’re going to stand with respect to that, the potential liabilities and how you expect that to play out with that longstanding asset you’ve had in China?
Marco Wiren: Yes. This is something that of course we will discuss with our counterparty in China as well. And whenever we have any news, we will inform you about this.
David Mulholland: Thanks, Richard. We’ll take our next question from Joseph Zhou from Barclays. Joseph, please go ahead.
Joseph Zhou: Thank you for taking my questions. And the first one is, can you quantify how much of the 37% organic sales decline in Mobile Networks or the 40% in North America for that division was really driven by the impact of the AT&T deal?
Pekka Lundmark: Yes. Thank you, Joseph. The North America as a whole, we saw weakness in quarter one and there’s not any specific customer that this is directed to. And what comes to AT&T, we don’t have any update what comes to the contractual discussions and negotiations that we have with them right now is still ongoing. And whenever we conclude, we will inform you about that as well. And exactly how the rest of the year will develop in North America, we follow that very carefully as well. And then, remember that AT&T continues to be a very important customer for Nokia as a group, but also for Mobile Networks, they continue to sell other services to AT&T like FEMSA, microwave and some other services as well going forward.
David Mulholland: Did you have a follow-up, Joseph?
Joseph Zhou: Yes, my second question is just basically on China. And there has been some recent news about the government is kind of stripping out the foreign chips from the telecom equipment. And as I understand, all your chips are foreign chips, and they come from the likes of Mobile, Intel, Vodafone, etc. And does it mean your China sales will, there’s a risk that your China sales go to very minimal? And also, have you seen any impact from that in Q1 at all, or is it mostly just like the Garmin box.
Pekka Lundmark: No, we have not seen any impact of that. And I have to say that we still need more clarity around that statement, because there are so-called foreign chips in pretty much all parts of all networks. So, it’s very hard to see what that would mean in practice. So, we need more clarity about that. But important for us is to of course remember that our market share in China is fairly low and China accounts only — Mainland, China accounts for a low single-digit percentage of our sales.
David Mulholland: Thanks, Joseph. We’ll take our next question from Sandeep Deshpande from JPMorgan. Sandeep, please go ahead.
Sandeep Deshpande: Yes, hi. Thanks for letting me on. I have a question on the growth of your routing and switches business in the enterprise and where you are at this point there in terms of design with activity. There was a lot of design with activity in this business a year or slightly more than a year ago, but it seems to have not been followed up to some extent. So, maybe I’d like to hear on that business. And then, I have a follow-up on the mobile business itself. Now when — with the loss of the U.S. customers, I mean, you are clearly thinking about the mobile business in the long term. Clearly, you have a strategy for 2026, but is there a strategy beyond? Does this business have to go back and get back to U.S. customers, or is this that is going to be a sub-scale business for you, or there is some other strategy to make it a much more profitable business?
Pekka Lundmark: Okay, thank you, Sandeep. The web-scale customers first, there are some undisclosed deals that we are working on to implement and ramp up at the moment. Hopefully, we would soon be able to publish who these guys are. So, that one is ramping, and we continue to believe that switching for web scalers will be a key growth driver in our non-CSP growth, not only for NI, but for Nokia as a whole. Then when it comes to mobile networks in the U.S., absolutely our target is to maximize our market position there in the mid to long term. And we believe that our offering is strong. We have nothing to be ashamed of there. And of course, AT&T has confirmed that the reason for the decision was not the strength of our offering.
So, absolutely we plan to fight back and when it comes to mobile networks in North America in general of course one thing is the big three operators then there is tier 2 and tier 3 as well. But then in addition to that there is a growing private wireless business in North America that we are doing with several of our partners. And then, in addition to all of this, there is in the mid to long term significant potential with the defense industry that is considering to start taking commercial technologies that 5G into the military applications, including tactical use. So, these are all important drivers for most mobile networks in North America. Absolutely we are not going to be happy and settle with the market position that we currently have there.
David Mulholland: Thank you, Sandeep. We’ll take our next question from Jakob Bluestone from BNP Paribas Exane. Jacob, please go ahead.
Jakob Bluestone: Thanks for taking the question. I had a question and a quick follow-up after. Just on the optical network side, where you struck a more cautious tone, I’d just be interested in hearing what is behind that and what is sort of the timeframe you’re thinking about a recovery happening there?
