“We saw healthy gross margin and operating margin performance for both (the fourth quarter) and full year 2020,” thanks to a renewed focus on North America and ongoing research and development efforts, chief executive Pekka Lundmark said in a statement.

Full-year operating income rose 5.5% to €2.1 billion, with the gross margin increasing 2.5 points to 39%, as the firm seeks to meet tough competition in the 5G market.

But despite 11% growth in North America during the fourth quarter, Lundmark said that predicted market share loss on the continent in 5G and 4G as well as price erosion means the firm’s 2021 outlook remains unchanged, with a 7% to 10% operating margin target.

Increased R&D spending will also weigh on the firm’s profitability as Lundmark, who took over last August, reiterated his pledge to “invest whatever it takes to win in 5G”.

Nokia announced it has signed a total of 145 5G deals and deployed 45 live networks, although sales declined 6% for the year “primarily due to network deployment and planning services in Mobile Access”, the firm said.

Competitor Ericsson posted a total of 127 signed contracts in late January.

Despite finishing the year with net cash reserves of €2.5 billion, the board once again decided not to pay dividends for 2020, after they were paused in October 2019.