Some U.S. regional telcos, two of which are now threatened with bankruptcy, gloated to Wall Street about how much broadband subsidies were diverted to company profits. So when I saw the release that Nokia was getting government money for "research," I wondered how the Nordic Investment Bank could be assured the money would go to "increased research" rather than other corporate purposes. Government loans are usually at a very favourable rate and much sought after. Money is fungible and can be easily diverted.
The headline is one possibility of what Nokia could do with the money unless the rules are strict. It was also my way to remind readers that Nokia is doing a great deal of vendor financing as well as receiving hundreds of millions or more in government support. Korea is loaning US$billions to customers of Samsung.
Huawei and ZTE are not the only ones getting government money.
I don't know any examples where a review like that resulted in a refund of the money.
NIB and Nokia agree EUR 250 million financing for 5G research and development
NIB loan will be used on 5G technology research and development in Europe
3 December 2018
Espoo, Finland - Nokia today 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 an average maturity of approximately 5 years after disbursement, will finance Nokia's extensive 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.
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 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," says Henrik Normann, NIB President & CEO.
"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.