Nokia took a $560 million loan to boost its failing 5G business

Finnish manufacturing giant, Nokia, is one of the major players in the 5G market. Besides Huawei and Ericsson, only a few other manufacturers can boast of the 5G prowess of Nokia. However, as huge as Nokia is, it does not have all the finances it needs for 5G development. According to Nokia's annual report, the company received a loan of 500 million euros (about $561 million) last month to help it accelerate the development of 5G technology.

According to the company, the loan was signed with the European Investment Bank (EIB) in August 2018. With an average loan term of 5 years, and the loan could not be withdrawn and used until last month (February 24). Nokia has stopped paying dividends since late 2019. In addition, the company says it needs more investment than its previous expectation to develop its 5G equipment. Since then, Nokia's financial situation has been the focus of attention in the industry.

This week, the Finnish company appointed the president and CEO of energy group, Fortum, as its new president and CEO. It is hoping to revive its faltering 5G business.

When signing the loan agreement, the company's statement partly reads "We will use this loan to further accelerate the development of the next-generation mobile communication standard 5G technology".

Huawei, Ericsson, and Nokia are the leaders of the 5G network construction worldwide. As of last month, Huawei has 91 5G commercial contracts. Ericsson and Nokia have 81 and 68 respectively. Since March 2019, Nokia shares have fallen 46%.