Finland invests $108 million in Nokia stock
The government of Finland has been quietly building its holding in Nokia (NOK). The Finnish government has invested $108 million in Nokia stock in the past six months to raise its stake in the domestic company to 3.7%, Reuters reported. Finland held a 3.3% stake in Nokia as of March 2018.
Finland is building its stake in Nokia as the company starts to commercialize its 5G products. In July last year, Nokia won a $3.5 billion 5G contract from T-Mobile (TMUS), the American operator that has pledged to spend as much as $40 billion on network developments if allowed to merge with its rival Sprint (S). In November last year, Nokia announced a $2.3 billion 5G-related deal with Chinese operators China Mobile (CHL), China Telecom (CHA), and China Unicom (CHU). Nokia has also been selected to supply equipment for AT&T’s (T) 5G network development.
Nokia wants to improve its profitability
Finland is also boosting its stake in Nokia at a time when the company is working on improving its profitability. The company last year unveiled a plan to eliminate $800 million in costs by the end of 2020. Nokia earlier set a goal to eliminate about $1.4 billion in costs by the end of 2018. The company will remove some jobs, including in Finland, to achieve its new cost-cutting goal.
Nokia’s revenue declined to $26.2 billion in 2017 from $26.8 billion in 2016. The company’s loss widened to $1.6 billion in 2017 from $1.0 billion in 2016.