Pekka Lundmark: I mean, there — I mean, here and there, there could be some inventory digestion, but the value is in Europe is really the weak economy operators, high leverage high interest rates and consequently, their low appetite to invest. The big question is that when will that start to change, of course, lower interest rates would be great to that end. But fundamentally, I believe that they will have to start investing again. And, of course, they are talking about it, but we have not seen that much yet. What I’m afraid, and this is my big, big worry, I mean, not that much about Nokia, but as a European, there is a risk that Europe falls behind the rest of the world in terms of competitiveness because of the quality of digital infrastructure that we have.
The 5G deployment is slower in Europe than in other parts of the world. Politicians and operators understand it. They are talking about it. It remains to be seen when that will start to change. But I’m convinced that it will change. But these things like mid-band penetration in 5G radio, et cetera. It is clearly lower in Europe than in many other parts of the world. But again, what we would hope to, of course, see that the operator market in Europe would consolidate so that we would get stronger, financially stronger operators. In Europe, there is one operator per four million to five million inhabitants and that is, of course, a totally different level than in any other part of the world. In India, there is — depending on how you calculate three or four operators for 1.3 billion people.
In China, there is three operators for 1.3 billion people. And in Europe, we have one operator for 4.5 million people. So the market is so fragmented that it does need to get consolidated. That’s one aspect of the picture. But then there are others, as I said, interest rates, et cetera.
David Mulholland: Do you have a follow-up question?
Artem Beletski: Yes. As a follow-up would be actually relating on some good strides what you are making on switching side. And could you maybe comment on profitability of this business, how we should think about it? Is it more like IP Networks type of margin, what you’re making there?
Pekka Lundmark: Well, that is, of course, highly confidential when we get to one product group for one customer group. But, of course, all this has been assumed in the targets that we have both short-term and long-term targets that we have put ourselves for the NI business. IP business has good profitability and the targets that we have for that business will, of course, stay there also including the growth in switching.
David Mulholland: Thanks, Artem. We’ll take our last question from Aleksander Peterc from Société Générale. Alex, please go ahead, and if you don’t mind keeping it to one question, just given the time.
Aleksander Peterc: Yeah. Thank you. Just a quick one to come back on Mobile Networks very briefly. Could you give us a broad idea of when you expect Mobile Networks to kind of bottom out and flatten? Is that a 2025 event, or will happen later? Maybe another way of asking this is, at what point do you expect the AT&T 5G footprint loss resulting from last year’s decision to wash out of the base? I know you gave some color on AT&T and all the puts and takes, but just to give us more idea there. Thank you.
Pekka Lundmark: I mean I understand the question very well, but you will appreciate that it’s extremely difficult to answer because, as I said, first of all, we cannot comment in the AT&T situation before we have concluded the negotiations. That is one thing. And of course, we expect to continue one way or another, at least to continue to be a supplier there as well. Then there is the whole Indian question. Volumes are right now going down. What will happen in India, which operators will invest and how much and when? How will the 4G re-farming take place in India, et cetera, et cetera. And then there is this whole question of when will the data traffic will grow to a level where operators throughout the world, including in Europe, will be forced to invest.
So, it is simply too early to say that when Mobile Networks would have reached the bottom. Our outlook for this year, we have wanted to be realistic, that’s why we are saying 1% to 4% comparable operating margin, but we are sticking to our longer-term ambition to reach this, what Sami also referred to in his question that with €10 billion sales, we target 10% operating margin. That’s how we are modeling the business, but that does require that we also penetrate into non-CSP segments in the second half of [indiscernible].
David Mulholland: Thanks, Alex and thank you, everyone, for joining us today. This concludes the Q&A session and today’s call. I would like to remind you that during the call today, we have made a number of forward-looking statements that involve risks and uncertainties. Actual results may therefore differ materially from the results currently expected. Factors that could cause such differences can be both external as well as internal operating factors. We have identified such risks in the Risk Factors section of our annual report on Form 20-F which is available on our Investor Relations website. Thank you for joining us.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
