Mods removed my last post so I spent like 30 minutes writing this. Mods I’ve already lost most of my portfolio, at least let me have this.
The US has been trying to get Huawei and ZTE out of telecom networks for years. The problem is pretty simple. Huawei is cheap and China can finance the buildout. Telling some random country to spend a shitload more money on Western equipment because America says so is not exactly a great sales pitch.
This is where DFC comes in.
Ben Black runs the US International Development Finance Corporation. They now have $205B of investment capacity and can use debt, equity, insurance, etc. Black has specifically said telecom is one of the areas they want to use this for.
And they are already doing it.
In June DFC signed a financing proposal involving Tele2 Kazakhstan to transition major telecom infrastructure to “trusted vendors.” DFC basically said the purpose was to open the market to US and allied telecom companies. A few days later they said more deals in more countries are ahead.
Black then goes to Finland today and meets Nokia.
According to Finnish reporting, he basically described DFC’s strategy as financing companies and making sure Nokia or Ericsson are involved in building the Western friendly technology stack.
But here is the part I completely missed originally.
There is already a massive Huawei replacement cycle starting.
The EU proposed new cybersecurity rules this year that would make removing equipment from high risk suppliers mandatory. If passed, affected telecom equipment would have to be removed within three years.
Unlike the old voluntary recommendations, this would apply across all 27 EU countries.
And there is still a fuckload of Huawei equipment in Europe.
Huawei and ZTE still have roughly 30 to 35% of European mobile infrastructure. Germany alone was estimated to have about 59% of its installed 5G equipment coming from Chinese suppliers.
One estimate puts the cost of replacing high risk equipment across European mobile, fixed and transport networks at €30B to €40B.
Obviously Nokia doesn’t get all of that. Ericsson and probably Samsung get plenty too. But this is not some hypothetical market that might exist in 2035.
Nokia already won a Deutsche Telekom rollout covering more than 3,000 German sites specifically replacing Huawei equipment.
The UK legally requires Huawei to be completely removed from its 5G networks by the end of 2027. VodafoneThree is in the middle of an £11B network build and Nokia already has roughly 7,000 sites in that rollout.
Canada requires its remaining Huawei/ZTE 4G equipment to be gone by the end of 2027.
And this one is brand new:
MasOrange, the largest mobile operator in Spain, reportedly plans to launch a new network tender in October. It currently has about 43% of its radio network on Huawei. The original plan was basically to shift more of that business to Ericsson, but that plan is now being reconsidered and Nokia is specifically being discussed as one of the alternative suppliers.
So sometime in the next two months Nokia could potentially be bidding for a chunk of the largest mobile network in Spain while the EU is simultaneously trying to force Chinese equipment out of European telecom networks.
That seems mildly relevant.
Then there is the rest of Nokia.
AI and Cloud sales were up 105% last quarter. They booked €2.8B of AI and Cloud orders in Q2 alone and expect roughly half of those orders to turn into revenue within 12 months.
Nvidia invested $1B directly into Nokia and is working with them on AI-RAN and 6G. T-Mobile is involved in the US testing.
Nokia also announced another $4B of US R&D and manufacturing investment in collaboration with the Trump administration, on top of the $2.3B Infinera acquisition.
So my speculation is this:
I don’t think Black necessarily flew to Finland to give Nokia one giant check.
I think there is a decent chance DFC wants some kind of broader relationship with Nokia where DFC