Helsinki: Finnish telecom company Nokia Corp. reported on Thursday a second-quarter net loss of €665 million ($738 million) due to weak demand for mobile networks and the costs of integrating its acquired competitor Alcatel-Lucent.

The wireless equipment maker said the loss compared with a profit of €347 million a year earlier, a figure that does not include Alcatel-Lucent in the accounts.

The combined net sales of Nokia and Alcatel-Lucent were €5.6 billion in the April-June period, compared with Nokia’s €2.9 billion a year earlier when it hadn’t yet merged with the French telecom gear maker. When comparing like-for-like businesses, Nokia’s revenue fell to €5.7 billion from €6.4 billion.

Chief executive officer (CEO) Rajeev Suri said the company was now targeting cost savings of €1.2 billion in 2018, an upgrade to the earlier announced estimate of combined Nokia and Alcatel-Lucent synergies of €900 million.

Suri said he was particularly worried over the declining trend in Nokia’s revenue that “reflects challenging market conditions" and he didn’t expect the market situation to improve in the near term.

In both North America and Europe— two of Nokia’s key sales areas—revenue dropped by 12% year-on-year, while the fall was somewhat smaller in the Asia-Pacific region and China with a decline of 6% and 5%, respectively.

Nokia is not the only company in the industry to suffer from meagre demand as the wireless equipment maker Ericsson last month reported a 26% drop in second-quarter profits, citing lower company investments amid a weakening global economy.

Nokia shares were down nearly 5% at €4.72 in midday trading in Helsinki.