European Investment Bank loaned nearly $500 billion for 5G
German telecom operator Telefónica Deutschland has secured a EUR 450 million ($ 495 million) loan from the European Investment Bank (EIB) to rollout its 5G network and further consolidate its LTE network.
In December Telefónica Deutschland announced that it planned to considerably accelerate its investment in mobile networks in 2020 and 2021
“This loan will make it possible to rollout a fast, energy-efficient 5G network, which will enable us to meet the soaring demand for mobile data from our customers“, said Telefónica Deutschland’s CFO Markus Rolle.
“5G, the next-generation mobile standard, is fast approaching”, said Ambroise Fayolle, EIB Vice-President, in charge of innovation and operations in Germany: “It will produce higher speeds and improve mass connectivity, and both citizens and the economy will also benefit from superfast, reliable networks. It will enormously improve existing wireless applications and open up completely new areas of business. That is the basis for innovation and growth in Europe, an objective that along with climate action is one of the EU bank’s top priorities.”
The EIB loan signed with Telefónica Germany has a term of eight years and continues to improve Telefónica Deutschland’s funding structure. In December, Telefónica Deutschland finalized a syndicated loan worth EUR 750 million.
Telefónica Deutschland, which is controlled by Spanish telecom group Telefonica, currently has more than 50 million connections in Germany. In the mobile market alone, Telefónica Deutschland manages more than 45 million connections. Telefonica Deutschland operates under the O2 brand.
Telefónica Deutschland, recently confirmed that it will allow Huawei to help build its 5G network despite the ongoing global tension around whether the Chinese company should be allowed to be involved in the rollout of the next generation of cellular connectivity. The decision marked the first public commitment toward the use of Huawei equipment for 5G by one of Germany’s three largest mobile network operators.
Telefónica Deutschland said its 5G rollout will include radio equipment from Huawei and Nokia, calling the companies “proven strategic partners” on 5G infrastructure. While both companies will be “equally responsible” for supplying equipment for 5G antenna technology as part of this decision, the operator will select vendors for the more sensitive core network during 2020.
Telefonica Deutschland added that its cooperation with Huawei and Nokia is contingent on the technology and companies passing a security certification according to German law. In fact, the German government is in the process of drafting security guidelines for the expansion of 5G networks, which is expected to require certification of all infrastructure equipment, including antennas.
Despite Huawei’s insistence that its equipment is not, and will not be, used for spying, concern continues to mount within Germany about the use of the company’s equipment after senior politicians in the ruling coalition called for a ban.
Germany’s largest telecom company Deutsche Telekom has launched 5G in a number of German cities using Huawei equipment including Berlin. However, the telecom company, which is partly owned by the government, previously said that due to the political uncertainty surrounding Huawei, it would freeze spending on new 5G equipment.
Operators in Germany are worried that banning Huawei would mean higher 5G network implementation costs and would ultimately delay deployment.
