Brussels loans Nokia €500m to fund European 5G research

Finnish networking and comms giant Nokia has been awarded a €500m (£453.6m) loan by the European Investment Bank (EIB) to further accelerate its research and development around the next-generation 5G mobile network standard.

Backed by the European Fund for Strategic Investments (EFSI), part of the European Commission’s (EC’s) Investment Plan for Europe, or Juncker Plan, the loan will provide much-needed support to Nokia as it develops its 5G proposition – an area where European firms are widely regarded as having fallen behind their counterparts in Asia and North America.

Nokia proposes to deliver an end-to-end 5G network proposition, from the radio access network (RAN) to internet protocol (IP), as well as optical and packet core networks, service platforms, and other software and services associated with 5G, making it capable of acting as a one-stop shop for mobile network operators (MNOs).

“We are pleased to land this financing commitment from the EIB, which shares our view of the revolutionary nature of 5G – and the realisation that this revolution is already under way,” said Nokia CFO Kristian Pullola.

“This financing bolsters our 5G research efforts and continues the broader momentum we have already seen this year in terms of customer wins and development firsts, supporting our relentless drive to be a true leader in 5G – end to end.”

EC vice-president Jyrki Katainen, who is responsible for jobs, growth, investment and competitiveness, said: “Ensuring that Europe embraces and benefits from new technologies requires sustained investment. That is where the Investment Plan for Europe can play a crucial role.

“I am delighted that, with today’s agreement, the plan is contributing to Nokia’s research and development activities across multiple European countries to advance the development of 5G technology.”

Viavi vice-president of wireless, Li-Ke Huang, said: “The US, China and South Korea have invested early and heavily to try to establish a leadership position in the ‘5G race’. This investment from the EIB is a crucial show of 5G support in Europe, and a demonstration of the region’s commitment to developing next-generation networks.

“Sustained backing from private, public and governmental bodies is essential to ensuring that Europe continues to be a major player in cellular communications.

“In order to be granted enough spectrum and gain the necessary support from regulators and governments, operators and vendors in Europe need to demonstrate that 5G development can solve existing problems in today’s networks.”

Huang said that the strength of its mobile ecosystem through the likes of Nokia and Sweden’s Ericsson meant Europe was still in a strong position to drive development of 5G networks, with support from governments, universities, consultancies, R&D specialists and the wider industry.

“Continued financial investment, along with collaboration and knowledge-sharing, will help to promote 5G development across the continent,” he added.

Earlier in August 2018, Nokia revealed that it would charge a flat fee of €3 per device to license its 5G patents, substantially undercutting rivals such as Ericsson and Qualcomm. The move has been read as an attempt to reduce the chances of it getting into legal battles with smartphone manufacturers, as well as to increase the attractiveness of its 5G portfolio.