Finnish telecom network equipment maker Nokia's second quarter profit surged 22 per cent to €316 million (Dh1.37 billion) despite quarterly revenue falling 11 per cent to €5.09bn. Cutting less-profitable service business and not winning 5G radio deals in the cut-throat Chinese market helped Nokia, where new chief executive Pekka Lundmark takes over this weekend, upgrade its earnings outlook for 2020. "We do not mind trading poor revenue which does not have high quality margin for better revenue," said outgoing chief executive Rajeev Suri. Most of the drop in quarterly revenue was due to the effects on the economy of Covid-19, but Mr Suri also cited a sharp decline in China based on a "prudent approach" in that market, and proactive steps to reduce low-margin services business, though he didn't say what the latter consisted of. Mr Suri's successor Mr Lundmark still faces key decisions on finding a balance between improving profitability and defending Nokia's market share, which currently makes it number two behind China's Huawei but ahead of Sweden's Ericsson when measured by revenue. "While the improvement in profitability from extremely low levels is clearly very encouraging, we are unsure on how much further Nokia can take such an improvement when sales are coming under significant pressure," Liberum analyst Janardan Menon said. Ericsson had reported a rise in 5G network sales and software revenue two weeks ago. Mr Suri steps down after more than a decade in charge of Nokia and Nokia Siemens Networks. The leadership change comes as turbulence prevails in European telecoms markets, with increasing pressure from some governments for operators to exclude or limit the use of 5G equipment from Huawei.