China’s Huawei is dominating 5G technology and they did so through investment by the communist Chinese government. Communists believe that the government should own the means of production and so they heavily subsidize most companies in China. Many years ago, China took the lead in 5G through government investment. You can see that domination in 5G technology in the number of 5G patents China has versus the rest of the world.You will find more infographics at Statista
Through Huawei and ZTE, China has more that 5 times the number of 5G patents that the U.S. has. This is a huge problem and it means that any 5G technology we roll out will further increase China’s 5G leadership by way of royalties and licensing fees paid to the communist government.
The Big Lie of Communism
That was the big lie during the 1990s, wasn’t it? Communist China was going to become more like the U.S. and China was going to play by the rules.
What an idiot President Clinton was. China cheated from the moment that they were accepted into the WTO in 2001, now, nearly 20 years later, China controls most industries around the world and they did that through government subsidized businesses, forced technology transfers, and corporate espionage.
After 20 years of China cheating in the WTO, the U.S. government is now proposing that we buy NOK stock, meaning that the U.S. is becoming more like China. President Clinton’s promise that China would open up its markets and become more like the U.S. was backwards. Instead, the U.S. is now becoming more like China in order to survive and not be completely left behind in 5G technology.
Last week Reuters’ Mark Hosenball, David Brunnstrom and Chris Sanders reported that U.S. Attorney General William Barr said the U.S. and its allies should consider investing in Nokia (NOK) or Ericsson (ERIC), or both firms, to counter Huawei’s dominance in next generation 5G telecoms technology. “We and our closest allies certainly need to be actively considering this approach,” Barr said in a speech to a Washington think tank conference on China, according to the report. Source: https://nationalpost.com/pmn/news-pmn/politics-news-pmn/u-s-attorney-general-says-u-s-allies-should-consider-nokia-ericsson-investment-to-counter-huawei
The Chinese embassy in Paris urged the French government not to discriminate against Huawei as it selects suppliers for its 5G mobile network, according to Reuters. The U.S. has been trying to convince countries to ban Huawei from their mobile networks, as Washington believes its technology could allow “back doors” for Chinese spying – an allegation denied by Huawei and Beijing, the report notes. The Chinese embassy noted in a statement that China had used foreign companies such as Finland’s Nokia (NOK) and Sweden’s Ericsson (ERIC) to equip its own domestic networks, the publication adds. “We do not wish to see the development of European companies in China affected due to discrimination against Huawei and protectionism in France and other European countries,” it said. Source: https://www.reuters.com/article/us-france-china-huawei/china-to-france-dont-discriminate-against-huawei-on-5g-networks-idUSKBN2030NP?feedType=RSS&feedName=technologyNews
In an interview with CNBC’s Wilfred Frost, U.S. VP Mike Pence said, “The United States is very disappointed that the United Kingdom has decided to go forward with Huawei for a portion of their information technology…We just don’t believe that utilizing the assets, the technology of Huawei is consistent with the security or privacy interests of the UK, of the United States, and it remains a real issue between our two countries.” When asked about AG Bill Barr’s remarks that the U.S. should invest in companies like Ericsson (ERIC) and Nokia (NOK) to catch up with Huawei and whether that was realistic in the short-term, the VP said, “We believe the best way forward is what Ajit Pai announced just over the last several days. The FCC has a plan for dealing with the spectrum that we think is going to make 5G much more rapidly available across the country and that’s the plan the president has endorsed and we will be carrying forward. We can expand 5G especially expand 5G to rural areas of this country by using the power of the free market and American companies. The United States and our allies around the world can meet those needs ourselves.” Source: https://www.cnbc.com/video/2020/02/07/watch-cnbcs-full-interview-with-vice-president-mike-pence.html
The problem is that countries are using Huawei because there are no other alternative companies that could handle a 5G rollout nor that holds the key patents that Huawei holds. We can’t even roll out 5G in the U.S. without paying royalties and licensing fees to the Chinese! Any countries that ban Huawei will fall behind in rolling out 5G to their citizens which will be extremely costly in their domestic economies.
I expect that U.S. government to get behind Nokia and to in essence subsidize the company like the Chinese have been subsidizing Huawei and ZTE for years now. This bodes well for NOK stock investors. The White House has officially dismissed the idea of buying into Nokia to help the company better compete against the Chinese giants Huawei and ZTE but secretly I bet the idea is gaining traction because the only alternative is complete and total communist Chinese domination in 5G technology.
We are seeing large players volume picking up in NOK stock.