Standard & Poor's Ratings Services has cut Nokia's corporate credit rating 'BB+' from 'BBB-'. The latest rating is considered highest speculative grade by market participants.
Earlier this week, rating agency Fitch too had slashed Nokia's credit rating.
The downgrades come at a time when Nokia -- once the dominant player in mobile handset space - is battling stiff competition from players such as Apple and Samsung.
S&P also has a negative rating outlook for Nokia, indicating the possibility of a downgrade in the next 12 months, if the company fails to stabilise revenues and margins and significantly cut cash losses.
"The rating action reflects a downward revision of our expectations for revenues from Nokia's Devices and Services division in 2012 and a subsequent revision of our profitability and cash flow assumptions," S&P said in a statement.
Nokia's strong position in this segment could weaken further, especially in China and India, where demand has been significant for low-price smartphone-like devices, a segment where Nokia currently lacks competitiveness, it said.
According to S&P, Nokia's revenues from the Devices and Services division could decline this year by the same extent as in 2011.
"We still expect revenue from Lumia smartphones to grow over time but not sufficiently to offset a rapid decline in revenue from Symbian-based smartphones over the next few quarters," it added. PTI SR RAM
