Tech

Against Huawei: USA want to continue to buy Ericsson or Nokia

In recent months, US government officials have continued to try to convince technology companies such as Cisco, private equity firms and experienced telecommunications managers to buy European cellphone suppliers such as Ericsson or Nokia. The reports the Wall Street Journal relying on informed circles. In more than one case, Cisco was not interested in “low-margin company” to acquire.

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Ericsson and Nokia should be given tax breaks and export bank funding, or a private equity group should be helped to buy one of the two outfitters and take them off the stock exchange. In addition, attempts are being made to strengthen Open-RAN-5G mobile communications based on standard hardware, where mainly US companies such as Airspan Networks, Altiostar Networks, Blue Danube Systems, Mavenir Systems and Parallel Wireless are active.

“For the first time in modern history, the United States is not a leader in emerging critical technology”According to the Wall Street Journal, a document circulating in the White House was written late last year by former National Aerospace Agency chief Daniel Goldin and Hossein Moiin, Nokia‚Äôs former chief technology and strategy officer. The goal is to create a US-based supplier that fills the void left by Lucent Technologies. Lucent merged with the French company Alcatel in 2006. The joint venture was later bought by Nokia. Motorola Solutions’ mobile network business went to Nokia Siemens Networks in 2010.

Cerberus Capital Management should invest in Nokia or Ericsson

At the beginning of the year, private equity investors led by Cerberus Capital Management should invest directly in Nokia or Ericsson. The move came to a standstill in the past few weeks, however, when manufacturers’ share prices rose.

US Attorney General William Barr suggested in February that the United States and its allies take control of Nokia or Ericsson to build a strong international competitor against Huawei. Instead, European companies are asking the United States to support their business through the Export-Import Bank and the US International Development Finance Corp., also known as DFC.

Open RAN Policy Coalition is problematic

Others have joined together in the Open RAN Policy Coalition, which is led by the mobile operator AT&T and includes several US software companies and Nokia. “Some see this as an opportunity to facilitate the creation of an industrial base in the United States”said Brian Hendricks, vice president of policy and public affairs at Nokia America. Ericsson executives have stated that they do not want to join the group. Technology chief Erik Ekudden said governments should not interfere in the technical work for which the private sector is well equipped. Alok Shah, vice president of Networks Strategy at Samsung Electronics America, said the South Korean company is already manufacturing some 5G components in the U.S., including cellular base station chips that are manufactured at a facility in Austin, Texas.

However, according to the Wall Street Journal, many mobile phone executives are concerned about the long-term perspective of Nokia and Ericsson, who have been trying to restructure for years. Nokia announced in March that the chief executive would step down and the company would consider strategic options, i.e. sales. Ericsson has returned to profitability after years of restructuring.

The U.S. Department of Defense said in a May 2, 2020 paper, available to Golem.de, that “5G technology includes strategic capabilities that affect the economic and national security of the United States (…)”. The U.S. military must have access to the best 5G systems, services and applications in the world to increase the effectiveness, resilience, speed and lethality of the armed forces. The U.S. Department of Defense would prioritize 5G investment, promote testing and integration at its sites, promote spectrum sharing, and invest in advanced sub-6 GHz and millimeter wave technologies.

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