Nokia's credit rating has been cut even further by ratings agency Moodys, over concerns about the company's cashflow.
The company's credit rating now stands at B1, four levels below "investment grade".
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It follows a downgrade from Moody's rival Standard & Poor's last month and takes into account an analysis of the company's recent results and the financing arranged to cover Nokia's €1.7bn acquisition of Siemens's 50 per cent stake in Nokia Siemens Networks.
"The outlook on all ratings is negative," concluded Moody's.
The ratings downgrade comes as Nokia prepares to re-finance pending debts due for repayment in 2014.
"We have downgraded Nokia's CFR [corporate family rating] mainly because we believe that the company continues to face challenges returning to sustainable profitability in its core smartphone and mobile phone operations, and because we believe that it is unlikely to reach break-even on a cash flow basis before well into 2014, at the earliest," said Roberto Pozzi, Moody's vice president and lead analyst on Nokia.
Nokia has benefited from two years of "support payments" from Microsoft as part of its transition to the Windows Phone operating system, weighing in at about $250m per quarter. In return, Microsoft received access to Nokia's considerable patent war chest and help refining Windows Phone.
However, those payments are drawing to a close while Nokia is still obliged to shell out similarly sized lump-sum licensing payments for the privilege of using Windows Phone. The company has sought to increase sales volumes by producing low-cost devices, such as the Lumia 520, but sales are not increasing fast enough.
"Nokia is currently experiencing strong double digit volume growth rates - it shipped 13.5 million smart devices in the first half of 2013 - but from a very low base and therefore it has yet to see a sustainable ramp that could allow it to achieve break-even. In the second quarter of 2013, the smartphone business was still losing €14 for every €100 of sales," noted Moody's.
It goes on to suggest that Nokia is now losing sales in the feature phone market - the low-end business that has held firm even as the company's old smartphone business crumbled.
Furthermore, as an also-ran in the smartphone sector, it lacks the compelling offerings to transition feature-phone users to genuine smartphones, although the Asha range of semi-smartphones, based on the old Series 40 operating system, has proved relatively popular.
However, Moody's does not expect the acquisition of Nokia Siemens Networks (since renamed Nokia Solutions and Networks) to have a major impact on cash flow and describes the purchase price as "fairly low".
"If the current turnaround at NSN continues, Nokia's credit profile could actually benefit from retaining a less volatile and potentially more profitable business such as mobile networks. The outlook on NSN's B2 rating is positive," claims Moody's.
It concludes: "The negative outlook on Nokia's B1 reflects Moody's view that it may take longer than 18-24 months for the company to return to sustainable profitability and cash flow generation.
"The consumer mobile communication sector remains highly competitive and volatile, with significant challenges for manufacturers to manage short product cycles, volatile consumer preferences and disruptive technological innovation.
"However, Moody's notes that Nokia has currently adequate liquidity to meet its significant debt maturities in 2014-15 and that it has still a significant positive net cash position also excluding NSN."
