Nokia has secured a €500 million loan from the European Union (EU) that will fund and accelerate 5G research and development (R&D).
The loan from the European Investment Bank (EIB) is supported by the European Fund for Strategic Investments (EFSI), which itself is a key element of the Investment Plan for Europe.
The move could be seen as a recognition from the EU of the importance of 5G networks, which will deliver ultrafast speeds, high capacity and ultra-low latency, to European society.
5G will power new applications in industry and entertainment such as Virtual Reality (VR), connected cards and the Industrial Internet of Things (IoT), and supporting a European giant could be a way of ensuring the continent receives the full benefits.
The race to 5G is currently being led by the US and Asia with the first commercial services set to go live later this year. Europe is further behind in the race due to fragmentation and challenging market conditions. The first commercial UK 5G services are expected to go live in 2020, with the government hoping its startup community and research capabilities will earn it a leading role in development.
Nokia plans to be one of the leaders in the telecommunications network equipment space, competing with the likes of Huawei, Ericsson and Samsung. The Finnish firm believes its ability to offer end-to-end packages of radio and core network technology, as well as services, make it well-positioned in the market.
Indeed, it plans to make €3 in royalties from every 5G smartphone sold.
“We are pleased to land this financing commitment from the EIB, who shares our view of the revolutionary nature of 5G - and the realisation that this revolution is already underway,” declared Nokia CFO Kristian Pullola. “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."
“Ensuring that Europe embraces and benefits from new technologies requires sustained investment. That is where the Investment Plan for Europe can play a crucial role,” added European Commission Vice-President Jyrki Katainen, responsible for jobs, growth, investment and competitiveness.
“I am delighted that, with today's agreement, the Plan is contributing to Nokia's research and development activities across multiple European countries to advance the development of 5G technology."