A $290 million loan
The European Investment Bank (or EIB) has extended a five-year, $580 million loan to Nokia (NOK). The loan is intended to support Nokia’s research work in the area of 5G (fifth-generation) technology. A few months ago, the EIB extended a five-year, $290 million loan to Ericsson (ERIC) also to support 5G research.
Nokia and Ericsson are both European companies. They’re leading suppliers of telecommunications equipment as well as software and services.
The EIB’s loans to Nokia and Ericsson are intended to allow these European flagship companies to better compete globally, particularly in the area of 5G technology, which has enormous economic potential for the companies and countries that lead the race.
Ericsson predicts there will be one billion 5G subscribers globally in five years—meaning by 2023.
Nokia wins $3.5 billion 5G contract
Nokia expects the United States to lead in the race to deploy 5G networks. In July, Nokia won a $3.5 billion multiyear 5G buildout contract from T-Mobile (TMUS), the fastest-growing US mobile operator in terms of subscriber gains. T-Mobile is seeking to merge with its rival Sprint (S), and the two have pledged up to $40 billion in network investments if they’re allowed to combine.
Verizon to begin offering 5G services
Verizon (VZ), the largest wireless company in the United States, is also a large Nokia customer. Verizon is on track to begin offering 5G services in select markets later this year. China Mobile (CHL), the world’s largest mobile operator in terms of subscribers, is also a Nokia customer. In July, Nokia won a $1.2 billion contract from China Mobile.