CORRECTED-Nokia network sales fall 22 percent

Thu Jan 23, 2014 6:42am EST

(Corrects operating margin forecast in the third paragraph)

HELSINKI Jan 23 (Reuters) - Nokia reported a 22 percent year-on-year fall in sales at its network equipment unit, the main business which it will be left with after sale of its former flagship phones business to Microsoft for 5.4 billion euros ($7.4 billion).

Nokia said on Thursday that Nokia Solutions and Networks (NSN) sales fell to 3.1 billion euros in the fourth quarter from a year earlier, shy of expectations for 3.2 billion euros in a Reuters poll.

It forecast the unit's adjusted operating margins, which rose to 11.2 percent in the fourth quarter from 8.4 percent in the previous quarter, to be around 5 in the January-March period.

NSN turned profitable in 2012 after slashing costs and shedding unprofitable businesses, helping to offset losses in its ailing mobile phone business.

While NSN's operating margins have been strong, analysts have said it now needs to concentrate on winning more business as high research and development costs in mobile broadband technology mean bigger players have an advantage. ($1 = 0.7372 euros) (Reporting by Ritsuko Ando; Editing by Balazs Koranyi)