US moots “controlling stake” in Nokia and Ericsson to boost competition against Huawei

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The US Attorney-General, William Barr, has suggested the US and its allies should consider taking a “controlling stake” in the firms to build stronger alternatives to Huawei.

Speaking at a conference in Washington, Barr said the US and its allies should be “actively considering” highly unusual proposals for 'American ownership of a controlling stake' in the European vendors, “either directly or through a consortium of private American and allied companies”.

The US has urged other countries to follow its lead and block Huawei equipment from 5G networks due to security and state spying allegations, which Huawei strongly denies.

The UK's Prime Minister, Boris Johnson, recently announced that Huawei will be allowed a limited presence in non-core elements of 5G infrastructure. His decision has been criticised by President Trump.

Financial muscle

The Financial Times has previously reported that US officials have been considering offering financial assistance to Nokia and Ericsson to help them compete more on price.

Barr’s comments suggest the government could be willing to go further still.

“Putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over their staying power. We and our closest allies certainly need to be actively considering this approach,” Barr said.

Neither Ericsson or Nokia has yet made any comment on the suggestion. Shares in both companies rose slightly after the remarks.

Last month, a bipartisan group of US Senators introduced a bill to provide more than $1 billion to develop Western-based 5G equipment alternatives to those from Huawei and ZTE.