LONDON — Hidden away in Nokia's third quarter results was confirmation that the Finnish handset maker will pay Qualcomm Inc. Euros 1.7 billion ($2.3 billion) as part of the patent agreement between the companies.

Until now, the exact size of the payment has not been revealed.

The agreement reached in July ended a long-running dispute between the companies, granted Nokia a licence under all Qualcomm's patents for use in Nokia's mobile devices and Nokia Siemens Networks infrastructure equipment.

The Euros 1.7 billion is payable during the fourth quarter of this year.

"As a result of the agreement with Qualcomm and certain other license agreements concluded during the third quarter 2008, Nokia incurred a slightly positive impact to its gross margin during the quarter, as the royalty provisions earlier recorded well covered the related obligations," Nokia said in its results statement.

The phone maker reported Thursday (Oct. 16) a sharp drop in third quarter profits, offering an early glimpse into the way the global financial crisis is feeding through to the real economy.

Net income dropped to Euros 1.1 billion from Euros 1.56 billion for the same period a year earlier. Sales dropped 5 per cent year-on-year in the third quarter to Euros 12.2 billion and were down 7 per cent compared to the previous quarter of 2008.

Operating profit of Euros 1.5 billion was 21 percent down on the same quarter last year.

The decline is doubly troubling as Nokia had previously been able to absorb a drop in spending in developed markets in the US and Europe by relying on sales in large emerging markets such as India and Latin America.

But the third quarter results revealed sales in some of these markets are now starting to come under pressure, indicating that these markets are not decoupled from the rest of the global economy and that consumer sentiment there is also starting to weaken.