Optical/IP Networks

The Bank of R&D

1:40 PM -- The European Investment Bank (EIB) does a capital job in helping to fund important projects around Europe, and particularly within the 27 member states that comprise the European Union. You know the sort of thing -- urban regeneration projects, alternative energy and recycling developments, rural infrastructure rollouts, 4G wireless R&D...

That's right. Amongst the loans awarded to climate change projects and educational programs, some of the telecom sector's biggest names are tapping the EIB's resources to help fund their LTE (Long-Term Evolution) and other next-generation network projects.

In July 2008, Ericsson AB (Nasdaq: ERIC) bagged a seven-year, €422.4 million ($559 million) loan to help fund the development of LTE radio technology and "the equipment and services needed to implement IP Multimedia Subsystem (IMS)" at two locations in Sweden. See this press release for more details.

Now rival Nokia Networks has followed suit, having recently applied for a loan of up to €200 million ($265 million) to partly finance its LTE research and development work in Finland and Poland during the 2009-2011 period. The application is "under appraisal" by the EIB.

One of NSN's parents, Nokia Corp. (NYSE: NOK), knows how the process works: In February this year it secured a €500 million ($662 million) loan to help it develop software for its smartphone range.

Well, cash is a bit harder to come by at the moment... (See Nokia Cuts 1,700 Jobs and Nokia Plummets, Looks to US.)

— Michelle Donegan, European Editor, Unstrung

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