The European Investment Bank has signed a €250 million loan agreement with Ericsson to boost the vendors R&D efforts in 5G.
The cash will be made available through the European Fund for Strategic Investments (EFSI), a joint initiative between the EIB and the European Commission, with the focus on development of hardware and software for the Radio Access Network (RAN). Most of the R&D activities will take place in Sweden, with minor parts also being carried out in Ireland, Spain and Poland.
“The development of 5G technology is easily one of the most important innovation initiatives for the telecom industry in the coming years. Ericsson has been one of the defining contributors to what mobile telephony is today and I think we can only be proud to support this,” said Alexander Stubb, Vice-President of the EIB. “Apart from supporting European technology, this project will also make sure that thousands of highly-skilled jobs will stay in the EU.”
“When it comes to developing 5G technology, we need to up our game in Europe,” said Jyrki Katainen, European Commissioner for Jobs, Growth, Investment and Competitiveness. “I am proud that Ericsson – a European company – is investing heavily in preparing for 5G with the EU’s financial backing. Being a leader in telecoms is crucial to maintain our competitiveness on a global stage so sufficient investment in 5G is strategically important for Europe.”
Looking at the investments being made by Ericsson, the loan will certainly help the vendor in the quest for 5G glory. During the course of Q1, Ericsson invested just short of €900 million in R&D programmes, which accounted for roughly 20% of net sales for the period. In terms of comparison, Nokia invested €1.1 billion, or just over 23% of revenues brought in over the three months.
With early deployments set to kick-off towards the end of this year, and the majority to be set in motion by 2020, a €250 million loan will certainly help the Swedes prove their 5G credentials.