By Jussi Rosendahl
Finnish telecom network equipment maker Nokia has secured a €500m loan from the European Investment Bank to step up development of next-generation 5G technology capable of faster speeds, wider coverage and more stable connections.
Such 5G mobile networks, which are still at an early stage, will offer data speeds up to 50 or 100 times faster than 4G networks and serve as critical infrastructure for a range of industries, such as driverless cars.
“We have to understand that China and the US have moved fast with the 5G. It is very important to have European companies going in for this competition,” EIB vice president Alexander Stubb, a Finn himself, said.
The bank had, earlier this year, signed a €250m loan deal with Nokia’s Swedish rival, Ericsson, but the EIB noted that the terms of the agreements were different.
The network gear business, led by China’s Huawei and the two Nordic companies, has struggled with flagging growth since demand for the current generation of 4G mobile equipment peaked in 2015.
Nokia last month announced a $3.5bn (€3bn) deal with US mobile carrier T-Mobile, so far the world’s largest 5G agreement.
That deal has been seen as vital to Nokia, whose results have been battered by years of slowing demand for existing 4G networks and mounting investor doubts over whether 5G contracts can begin to boost profitability later this year.
By 2025, 1.2bn people worldwide are set to have access to 5G networks.