US government thinking of giving Nokia and Ericsson a helping hand – report

Huawei’s main rivals in the telecoms kit market could be set for some extra assistance from the US as it looks to level the 5G playing field.

The rumour comes courtesy of the FT, which spoke to some anonymous but definitely senior US government officials. They reckon that, in spite of all the impediments the US has thrown in its way, there’s a real danger that Huawei could become ‘dangerously dominant’ in the 5G market. One way to help Ericsson and Nokia keep up may be to give them cheap credit, so they can match the generous financing terms Huawei offers its customers.

One official lamented how rubbish at making telecoms gear the US is and is starting to worry about the national security implications of taking its eye off that ball. “Almost every department and agency is desperately looking right now for ways to get back into this game,” they are quoted as saying. Another even ventured that if they don’t, Huawei might be the only choice for 5G gear, which seems a bit harsh on Nokia and Ericsson, not to mention Samsung and ZTE.

The credit thing seems to be a direct challenge to the assistance Huawei is thought to get from Chinese state banks. No such state credit lines are available to western companies, which obviously puts them at a competitive disadvantage. Underlying this is the broader narrative that China doesn’t play fair in global trade and offers a considerable amount of state assistance to its domestic champions.

The report seems to imply the US is considering an ‘if you can’t beat ‘em, join ‘em’ approach by not only helping out its favoured kit vendors, but even trying to create persuade a US player like Cisco to get involved in 5G gear. Reports like this make it easy to believe that all this security talk is just a smokescreen designed to legitimise US participation in the kind of state intervention it condemns China for.