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Nokia Doesn’t Want Cash Shortage to Block Its 5G Highway

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Nokia secures another loan for 5G research

Nokia’s (NOK) sales have mostly been on a decline in recent years, and the company is banking on the adoption of 5G connectivity to help it return to growth. To ensure that it can maximize its commercial opportunities in the 5G era, Nokia has been working on addressing its funding needs. On December 3, Nokia secured a 250 million euro loan from the Nordic Investment Bank to finance its 5G research and development activities in Europe. Back in August, the company secured a 500 million euro loan from the European Investment Bank also to finance its 5G-related research initiatives.

Nokia is not alone in lining up financing for its 5G projects. Ericsson (ERIC), another leading vendor of telecom equipment, has also secured a 250 million euro loan from the European Investment Bank to be used toward 5G research.

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Chase for 5G contracts

Nokia, Ericsson, and Samsung (SSNLF) are chasing 5G equipment contracts. In July, Nokia won a $3.5 billion multiyear 5G-related contract from T-Mobile (TMUS), the American operator that has said it could invest as much as $40 billion on network development if it is allowed to merge with its rival Sprint (S). Last month, Nokia announced 5G-related contracts worth about 2.0 billion euros from a trio of Chinese mobile operators.

Ericsson and Samsung have also scored 5G contracts of their own. For example, Ericsson announced in September a $3.5 billion 5G-related contract from T-Mobile, while Samsung won contracts to supply equipment for Verizon’s (VZ) initial 5G rollout program.

Nokia has 4.8 billion euros in cash

In terms of ability to fund its 5G projects, Nokia looks well covered. In addition to the credit financing lined up, Nokia exited the third quarter with 4.8 billion euros in cash.

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