Nokia is looking to the next generation of technology as it aims to cut spending by €700m (£620m) over the next two years.
The Finnish network provider said it expects to spend between €100m and €200m trialling 5G with customers.
Sales dropped by one per cent to €5.5bn year-on-year in the third quarter, a slowdown in the rate of decline compared to the rest of the year.
Nokia cut losses before tax to €112m, from a €292m loss in the third quarter of 2017.
Why it’s important
Nokia has redesigned its business from being a consumer-facing phone producer ten years ago to providing networks for phone operators.
It hopes 5G, the next great leap forward in mobile network technology, will make it a leader in the new niche, which it shares with Ericsson and Huawei.
In August, Nokia agreed a €500m loan from the European Investment Bank to fund 5G research.
But the company is also tightening its belt, and a new €700m savings programme comes as it aims to complete the €1.2bn cuts announced in 2016.
Chief executive Rajeev Suri told CNBC he will lay off thousands of employees as part of the spending cuts.
What Nokia said
In a statement Rajeev Suri said: “Nokia's third-quarter results validate our earlier view that conditions would improve in the second half of 2018. This was particularly evident in our excellent momentum in orders, growth across all five of our networks business groups, and improved profitability compared to the first half of the year.
“Despite some risks related to short-term delays in project timing and product deliveries, we remain on track to deliver on our full-year guidance. We are executing well on our strategy with particularly good progress in Nokia software and expansion to select enterprise vertical markets.
“Separately today, we announced steps to accelerate that progress as well as sharpen our customer focus and maintain cost leadership. These are important steps that give us added confidence in our ability to deliver on our 2020 financial commitments.”