July 18 (Reuters) - Finnish telecom equipment maker

Nokia said on Thursday its operating profit fell 32%

in the second quarter because of continued weak demand for 5G

telecom equipment but forecast a demand improvement in the

second half.

Its comparable operating profit fell to 423 million euros

($462.38 million), from 619 million euros in the same quarter a

year earlier.

Nokia and its Swedish rival Ericsson have been

hit by customers buying less telecom equipment, and have

announced thousands of lay-offs in response.

Nokia said its net sales fell 18% year-on-year in constant

currency, largely because the pace of investment in 5G

technology in India - which accounted for about 12.5% of total

2023 sales - was slowing after rapid growth a year before.

"The most significant impact was the challenging year-ago

comparison period which saw the peak of India's rapid 5G

deployment with India accounting for three quarters of the

decline," Nokia said.

It however forecast a return to growth in the second half.

"While the dynamic is improving, the net sales recovery is

happening somewhat later than we previously expected," CEO Pekka

Lundmark said.

"Looking forward, we believe the industry is stabilizing and

given the order intake seen in recent quarters we expect a

significant acceleration in net sales growth in the second

half," he added.

Rival Ericsson last week also forecast a recovery in the

market as demand was picking-up in North America.

On a call with reporters, Lundmark said Nokia was seeing

similar early signs of improving demand in North America.

"The fiber market in North America is showing promising

signs. We signed new important deals there," he said.

The company kept its full-year guidance for comparable

operating profit between 2.3 billion and 2.9 billion euros.

($1 = 0.9148 euros)