Nokia 2006 Annual Report Download - page 24

impact on our working capital, may be significant. Defaults under these financings have occurred in
the past and may also occur in the future.
Customer financing continues to be requested by some operators in some markets, but to a
considerably lesser extent and with considerably lower importance than in the late 1990s and early
2000s. As a strategic market requirement, we plan to continue to arrange and facilitate financing to
our customers, and provide financing and extended payment terms to a small number of selected
customers. Extended payment terms may continue to result in a material aggregate amount of trade
credits, but the associated risk is mitigated by the fact that the portfolio relates to a variety of
customers. We cannot guarantee that we will be successful in providing needed financing to
customers. Also, our ability to manage our total customer finance and trade credit exposure depends
on a number of factors, including our capital structure, market conditions affecting our customers,
the level of credit available to us and our ability to mitigate exposure on acceptable terms. We
cannot guarantee that we will be successful in managing the challenges connected with the total
customer financing and trade credit exposure that we may from time to time have. See ‘‘Item 4.B
Business Overview—Networks,’’ ‘‘Item 5.B Liquidity and Capital Resources—Structured Finance,’’ and
Notes 8 and 37(b) to our consolidated financial statements included in Item 18 of this annual report
on Form 20F for a more detailed discussion of issues relating to customer financing, trade credits
and related commercial credit risk.
Allegations of possible health risks from the electromagnetic fields generated by base
stations and mobile devices, and the lawsuits and publicity relating to them, regardless of
merit, could negatively affect our operations by leading consumers to reduce their use of
mobile devices, or by leading regulatory bodies to set arbitrary use restrictions and exposure
limits, or by causing us to allocate additional monetary and personnel resources to these
issues.
There has been public speculation about possible health risks to individuals from exposure to
electromagnetic fields from base stations and from the use of mobile devices. While a substantial
amount of scientific research conducted to date by various independent research bodies has
indicated that these radio signals, at levels within the limits prescribed by safety standards set by
and recommendations of public health authorities, present no adverse effect on human health, we
cannot be certain that future studies, irrespective of their scientific basis, will not suggest a link
between electromagnetic fields and adverse health effects that would adversely affect our sales and
share price. Research into these issues is ongoing by government agencies, international health
organizations and other scientific bodies in order to develop a better scientific and public
understanding of these issues.
Over the past six years Nokia has been involved in several class action matters alleging that Nokia
and other manufacturers and cellular service providers failed to properly warn consumers of alleged
potential adverse health effects and failed to package headsets with every handset to reduce the
potential for alleged adverse health effects. All but two of these cases have been withdrawn or
dismissed. The remaining cases are before the US District Court for the District of Maryland in
Baltimore, Maryland. Nokia and the other defendants have filed a Motion to Dismiss and a request to
defer the issues in the case to the US Federal Communications Commission. In addition, Nokia and
other mobile device manufacturers and cellular service providers have been named in five lawsuits
by individual plaintiffs who allege that radio emissions from mobile phones caused or contributed to
each plaintiff’s brain tumor. Those cases are before the District of Columbia courts.
Although Nokia products and solutions are designed to meet all relevant safety standards and
recommendations globally, no more than a perceived risk of adverse health effects of mobile
communications devices could adversely affect us through a reduction in sales of mobile devices or
increased difficulty in obtaining sites for base stations, and could have a negative effect on our
reputation and brand value as well as harm our share price.
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