French telecom giant Iliad has announced it has chosen Nokia for the expansion of its 5G network in France; its rollout will start next year.
Iliad, which offers services in France and Italy under its 'Free' brand, made a point of noting its vendor choice represented “a clear choice for European technology and strategic independence”.
This move is expected to give headwind to the Finnish company, which has faced an uphill battle in recent years after having lost a mobile phone market share which had been approximately 30 percent in the early 2000s. The deal has been described as a “market turning point” by Finnish national broadcaster Yle.
The exact contract sum between Iliad and Nokia has not been disclosed, but is estimated to be in the billions of euros.
While Nokia is Iliad's current supplier for 3G and 4G technology, the decision is somewhat surprising, as Iliad is also responsible for Monaco's expansion of the 5G network, where it was decided to hire the Chinese company Huawei as the main contractor.
Pundits linked the choice to the US's warnings against collaboration with Huawei and suspicions of espionage surrounding the Chinese company. Free's change of attitude has been attributed to Donald Trump's move to blacklist the Chinese telecom giant from the US market earlier this summer.
“The fact that there is criticism of Chinese Huawei benefits Nokia”, French researcher Julien Nocetti of the Paris-based foreign policy think tank Ifri (L'Institut français des relations internationales) “Of course, Nokia's rival Ericsson will also benefit from this situation. In general, however, this could cause EU member states to strengthen cooperation within the Union”, Nocetti said, suggesting that the US-Chinese trade war may actually benefit the EU.
“Of course, Korean Samsung and American Cisco will also want to have a say in the game”, he added.
The Chinese company has been riddled with of spying accusations. Nocetti stressed that the suspicions that Huawei's products are used for spying by China's military, the People's Liberation Army, have not been proven yet. These accusations largely stem from the billions of dollars the Chinese government has invested in the company. In Poland, a Huawei employee was arrested on suspicion of espionage, and in Sweden the government has decided on a new bill which would make it possible to exclude Huawei from 5G development in Sweden.
However, despite the blacklisting and criticism, Huawei continues to grow. By its own admission, it sells between 500,000 and 600,000 mobile phones every day. The Chinese giant also accounts for about seventy percent of the expansion of the 4G network in Africa and has currently landed 5G contracts with dozens of countries. As of today, Nokia has secured 45 commercial 5G contracts to Huawei's 50.
Free, France's third-largest telecom company, has existed for some twenty years. The value of its parent company reportedly amounts to over €12.5 billion ($13.8). It has over 13.4 million mobile customers in France and over 3.3 million mobile customers in Italy. Iliad's founder and CEO Xavier Niel is also the majority stakeholder in the newspaper Le Monde.
Europe's Turn to China?
Petri Krohn, a Finnish political analyst, says the news comes following Macron’s speech where he stated that France should become a "balancing power" between the US and Eurasia.
"Buying from a European supplier strengthens Europe’s “strategic independence”. But this independence entails the ability to buy from China, despite US pressures. I believe the EU will resist US bullying on strategic issues like telecommunications. Britain on the other hand is sliding into US dependence, Brexit or no Brexit."
