US suggests purchasing controlling stake in Nokia or Ericsson to counter Huawei 5G threat

For more than 6 months, the United States and China have been involved in a trade war that turned into a technology war as well, with Huawei being the center of action. The Chinese phone and network gear maker has been expanding quickly in both areas – in terms of market share and bringing innovation with their products.

The United States of America realised Huawei’s growth in the telecommunications industry, which is today probably the most important industry in terms of national security because of all the data being shared globally, has become a threat and could be used in interest of foreign actors, in this case China. It’s also true that the Chinese government supported Huawei in its conquest, while Western governments mostly ignored this segment of the industry.

For quite some time the White House has been drafting plans how to counter Huawei in terms of 5G network equipment. The US doesn’t have a domestic mobile networks gear maker, while Huawei’s biggest rivals – Nokia and Ericsson, have they headquarters in Finland and Sweden. The first move US made was banning the sales of Huawei 5G gear in the US.

Today, two approaches the US government might be taking to secure their 5G independence appeared online. The first approach is to create a pact of US companies that will be building US 5G network. The pact, as WSJ reports, includes Dell, Microsoft and AT&T. The network should be cloud based and considering Microsoft’s expertise in cloud with Azure, Dell’s with servers and AT&T being an operator, the leaked trio makes sense. It will still take a huge amount of effort/money to have a competitive homegrown solutions.

The second approach is acquiring a control stake in Nokia or Ericsson, as US Attorney General William Barr stated to WSJ. Previously the Administration suggested opening credit lines to Ericsson and Nokia, but a direct investment might be a cleaner solution. Nokia and Ericsson didn’t comment Attorney Barr’s statement to WSJ at the time of publishing of this article.

The combination of both approaches is also possible, considering both Nokia and Ericsson have big US presence.

I don’t want to overthink what an impact US moves could have on Nokia and the market in general, so I think it’s better to wait for concrete moves because till now the 5G plans are mostly just words. Be free to leave your opinion in the comments below. 🙂