Nokia heads to the bank to borrow €250m to back 5G R&D

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Nokia has borrowed €250 million to finance research and development into 5G in the latest part of its turnaround plan.

The loan, from the Nordic Investment Bank, has a term of five years and will be spent specifically on building new 5G-end-to-end product offerings across a range of business areas, Nokia said.

The money will also back work on new Internet of Things solutions, spanning the smart home, connected cars and other connected devices.

Kristian Pullola, CFO, Nokia, said: "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."

Henrik Normann, NIB President & CEO, said: "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."

Nokia announced last month it was merging its fixed and mobile arms as it looks to save €700 million each year by 2020.

CEO Rajeev Suri said at the time that he move would help it improve its customer focus and simplify its management structure.

The previous month, Nokia posted a 27 percent drop in operating profit to €668 million for the third quarter of 2018.