By Marcus Leach

Mobile phone giants Nokia have seen their woes continue as credit ratings agency Fitch cut the status of their bonds to just above junk.

Their rating has been reduced from BBB+ to BBB- and comes less than a week after the phone manufacturer announced that their sales for the second quarter will be below those originally forecasted, as well as opting out of providing a full year outlook.

This move saw their share price in Frankfurt drop by 12%, and now as they bid to rebuild they will be forced to pay more for money they borrow as part of their new credit rating.

Fitch warned it might have to cut the rating again as the company loses market share.

"The pace of deterioration has picked-up since Nokia decided to switch to an alternative operating system, and it appears consumers are deserting these legacy handsets for cheaper Android versions or high-end Android or Apple smartphones," said Fitch analyst Stuart Reid.

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