Nokia landed a loan worth €500 million from the European Investment Bank (EIB) to support its 5G efforts, as the continent looks to keep pace with Chinese rivals in developing the technology.
The agreement comes a few months after Nokia’s main European rival Ericsson also secured a similar loan from EIB, worth €250 million, to support 5G research and development.
In a statement, Nokia said the loan will last for five years in total and is backed under the European Fund for Strategic Investment. Nokia will use the funds to invest in research, development and innovation in 5G, while pushing the technology across multiple European countries.
“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,” said Kristian Pullola, Nokia CFO.
Indeed, Nokia is pinning big hopes on 5G and has said it is expecting a bump in financial performance in the second half the year as operators increase their spending on the technology at the end of the year.
US operators are expected to launch 5G commercially this year, before major Asian countries South Korea, Japan and China rollout networks in 2019. Europe is then expected to follow shortly after.
Speaking to Financial Times, EIB VP Alexander Stubb, added that Europe “needs to be involved in the race for 5G”, and the continent’s early development was increasingly important given advancements made by Chinese rivals.
“We have to understand that our competitors are huge and the like of Huawei and China Mobile. This is where we need to wake up and smell the coffee and get connected.”
He also said EIB loans were designed to help European “flagship” companies. “The rest of the world caught up and then surpassed us with 4G. Now we need to show that our flagship companies are able to compete, not just in Europe but in a broader sense.”