Finnish telecom network equipment maker (Nokia) confirmed to have signed a EUR 250 million loan transaction with the Nordic Investment Bank (NIB) to finance research and development activities related to 5G technology.
The loan, which has a tenure of 5 years after disbursement, will finance Nokia’s research and development program focused on 5G activities in Europe in 2018-2020. The investment will especially concentrate on developing new 5G-related end-to-end product offerings for different business areas.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.
EIB Vice-President Alexander Stubb, responsible for lending in Northern Europe, said: “5G is happening fast, faster than most people even expected. It’s anticipated that it will enable entirely new business cases, while dramatically enhancing existing wireless applications. I think bringing 5G to the market will definitely improve people’s lives, as the motto for the EIB’s 60th anniversary states.”
5G is the next generation of wireless systems beyond the current 4G standards, providing a substantial increase in network capacity, reducing latency delays and enabling network slicing. Network slicing gives network operators greater ability to differentiate their services to match clients’ needs.
Nokia’s 5G research and development program also focuses on the implementation of the “Internet of Things”, machine-type communication between the things humans have invented. In practice, this means a network of different devices, such as home appliances, vehicles and other electronics, being able to exchange data wirelessly.
The NIB President and CEO Henrik Normann said in his interview concerning the contract that “The business opportunities of 5G are numerous, as it will be the first mobile generation designed from the beginning for machine-type communication. Nokia’s research and development is likely to benefit not just the telecom sector, but also several high-technology operators in our member countries.
“We are pleased to receive this financing commitment from the NIB, which shares our view of the revolutionary nature of 5G. This financing will further support 5G research and development in Europe and it bolsters the momentum we have already seen this year as the era of 5G begins,” says Kristian Pullola, CFO, Nokia.
Nokia’s end-to-end network proposition goes from the radio network to the internet protocol (IP) and optical networks for transmission, the packet core network, service platforms and all the software and services associated with the whole system. In essence, Nokia’s portfolio covers all the needs of a telecom operator that wishes to provide fully converged fixed-mobile communications services critical for the era of 5G.
The loan, which extends Nokia’s debt maturity profile, has an average maturity of approximately five years after disbursement, which can take place at any time during the next 18 months.