Nokia downgraded by debt rating agency over sales concerns

Paul Nesbitt

Nokia has had its corporate debt downgraded from A to A- by Fitch Ratings over the debt rating agency's concerns about Nokia's performance in the increasingly competitive smartphone market.

London-based Fitch explained its move, which will make Nokia's financing of its debts more expensive, to reflect the higher risk involved in lending to the Finnish handset vendor. Nokia's debt is now assessed as being four levels about junk bond status.

'Fitch is concerned that the growth market of smart phones is highly competitive,' the agency said in a statement. It cited specific concerns that 'niche players,' like Apple’s iPhone and Research in Motion's BlackBerry, 'have already established strong product positions.'

Earlier this year, Nokia reported its first ever third quarter loss (559 million Euros) and Nokia, the world's largest handset maker, lost market share in the smartphone sector to the iPhone and BlackBerry.

Nokia has already had its debt rating downloaded in October by Moody's.