Credit rating agency, Fitch Ratings cut Nokia’s ratings for long-term debt from A to A- which is four levels above junk or non-investment grade. This marks the second time Fitch has cut the rating on debt, the earlier being in July.

“Fitch is concerned that the growth market of smart phones is highly competitive,” said Fitch. It added that niche players such as Apple and RIM have already established strong product positions in the segment indicating that it will be challenging for Nokia to counter the competition from these players. 

Fitch further said that Nokia also faces concerns over its JV in NSN with Siemens.

Fitch said it forecasts that Nokia’s sales for the year will be in the range of 40 billion euros to 40.5 billion euros.

Fitch however mentioned that the cut in ratings does not signals any deterioration in Nokia’s near-term liquidity. Fitch said, coupled with sizeable standby credit facilities, the company’s short-term debt liabilities of 852 million euros at the end of September are adequately covered.