Nokia, T-Mobile US agree $3.5 billlion deal, world’s first big 5G award

Headquarters of Finnish telecommunication network company Nokia are seen in Espoo, Finland July 26, 2018. (Reuters/Lehtikuva/Mikko Stig)
Updated 30 July 2018
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Nokia, T-Mobile US agree $3.5 billlion deal, world’s first big 5G award

LONDON: T-Mobile US named Nokia to supply it with $3.5 billion in next-generation 5G network gear, the firms said on Monday, marking the world’s largest 5G deal so far and concrete evidence of a new wireless upgrade cycle taking root.
No.3 US mobile carrier T-Mobile — which in April agreed to a merger with Sprint to create a more formidable rival to US telecom giants Verizon and AT&T — said the multiyear supply deal with Nokia will deliver the first nationwide 5G services.
The T-Mobile award is critical to Finland’s Nokia, whose results have been battered by years of slowing demand for existing 4G networks and mounting investor doubts over whether 5G contracts can begin to boost profitability later this year.
5G networks promise to deliver faster speeds for mobile phone users and make networks more responsive and reliable for the eventual development of new industrial automation, medical monitoring, driverless car and other business uses.
But cash-strapped telecom operators around the world have been gun-shy over committing to commercial upgrades of existing networks, with many seeing 5G technology simply as a way to deliver incremental capacity increases instead of new features.
Terms of the deal call for Nokia to supply a range of 5G hardware, software and services that will allow T-Mobile to capitalize on licensed airwave to deliver, broad coverage on 600 megahertz spectrum and ultra high-speed capacity on 28 megahertz airwaves in densely trafficked urban areas, the companies said.
Nokia will supply T-Mobile with its AirScale radio access platform along with cloud-connected hardware, software and acceleration services, they said in a statement.
The network equipment business, which is led by three big players — China’s Huawei, Nokia and Sweden’s Ericsson — has struggled with flagging growth since the current generation of 4G mobile equipment peaked in 2015.


Saudi Arabia, four other Gulf states to enter key JP Morgan bond indexes

Updated 26 September 2018
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Saudi Arabia, four other Gulf states to enter key JP Morgan bond indexes

  • The indexes are key performance benchmarks for international investors in emerging market debt
  • Membership in them can help a country sell bonds and reduce its borrowing costs

DUBAI: Saudi Arabia and four other Gulf states will enter JP Morgan’s emerging market government bond indexes next year, a move likely to lure billions of dollars of new foreign investment into their debt, according to a JP Morgan statement sent to investors.
The indexes are key performance benchmarks for international investors in emerging market debt, so membership in them can help a country sell bonds and reduce its borrowing costs.
Sovereign and quasi-sovereign debt issuers from Saudi Arabia, Qatar, the United Arab Emirates, Bahrain and Kuwait will become eligible for the EMBI Global Diversified (EMBIGD), EMBI Global (EMBIG) and EURO-EMBIG indexes, according to the statement, which was seen by Reuters on Wednesday.
Their entry will be phased in between Jan. 31 and Sept. 30. Both conventional bonds and sukuk, or Islamic bonds, will be eligible for inclusion in indexes, but sukuk will need to have a credit rating from at least one of the three major rating agencies to be included.
JP Morgan’s decision follows a surge of debt issuance from the Gulf Arab region in the past few years, as low oil prices force most countries to fund part of their state spending in the international debt markets.
Saudi Arabia, Bahrain, Kuwait, Oman and Qatar have issued a quarter of all new debt sold by emerging market countries in each of the last three years.
The inclusion of Gulf Cooperation Council countries in the indexes will leave them representing around 11.2 percent of JP Morgan’s EMBI Global Diversified and EMBI Global series, the statement said.
“It is estimated that around $360 billion of assets under management are benchmarked against the EMBIG family, with the EMBIG diversified at around $300 billion,” said Zeina Rizk, director of fixed income asset management at Arqaam Capital in Dubai.
Rizk estimated this would translate into about $30 billion of inflows into the five countries’ debt.
“Those inflows are not going to come on day one, but the tailwind resulting from the inclusion headline, coupled with pegged currencies, strong oil prices, a relative immunity from trade wars and high credit quality, leads us to the view that the GCC has better value than the rest of emerging markets.”
The minimum size for inclusion in the indexes is $500 million, and during the inclusion process, instruments will need to have a maturity date beyond March 2022, the statement said.