Nokia expects its sales to fall around 2% next year, in line with the broader telecoms network businesses in which it operates, but forecasts the market and its own business will return to modest growth in 2018.
The Finnish company set out its outlook on Tuesday at an investor meeting in Barcelona.
It warned that markets for networks equipment next year would decline in Europe, Greater China and Latin America, while remaining flat in North America, Middle East Africa and Asia, outside China.
Nokia added it planned a dividend of €0.17 per share for 2016, up from €0.16 last year, but below analysts' mean forecast of €0.19, according to Thomson Reuters data.
Nokia also paid a special dividend of €0.10 in 2015.
Between 2016 and 2021, Nokia said it expected a rebound in several regions of the world, although growth would remain flat in Europe and decline over the next five years in Greater China, according to its investor presentation.
Nokia bought French rival Alcatel-Lucent earlier this year to better compete with Ericsson and Huawei in a tough market.
Ericsson, the world's largest mobile equipment maker, in particular has had a torrid few months, issuing a series of profit warnings.
Last week, the Swedish firm said its mobile gear business would decline around 2-6% in 2017.
Ericsson has suffered a sharper fall in sales, cut its forecasts and recently hired a new chief executive amid an industry-wide decline in demand for current 4G mobile network equipment, which is not expected to significantly recover until next-generation 5G equipment arrives around 2020.
Nokia President and chief executive Rajeev Suri said today his company was outperforming Ericsson in almost every area.
"Nokia is not Ericsson. They are in crisis," Suri told investors.
Nokia said that while its network sales were set to decline next year, it expected the operating margin for the business to improve to 8-10% in 2017 from estimated 7-9% in 2016.
