Feature Article

March 07, 2013

Spanish Telecom Operator Telefonica Secures $1B Export Credit Facility from Sweden's Ericsson

On Tuesday, Europe’s biggest telecom operator, Telefonica, secured a $1-billion export credit facility to buy equipment from Sweden's Ericsson AB, reports International multimedia news agency, Reuters.

In a statement, the Madrid-based Spanish operator said, "Telefonica continues to drive the use of diverse financing instruments, apart from bonds and loans, and to increase its financing deals with export credit agencies for financing equipment.”

The deal is backed by two Swedish export authorities, the Swedish National Export Guarantee Board (EKN) and the Swedish Export Credit Corporation (SEK). According to the Reuters report, Swedish government export credit agencies tend to support big deals that involve exports to emerging economies and provide a boost to local manufacturing.

“Known as 'vendor financing', this type of loan is often given by makers of telecom equipment or their national export banks to help big telecom operators make purchases,” wrote Reuters reporter, Clare Kane.

Similarly, the report indicates that Chinese telecom equipment makers like Huawei and ZTE have also relied on backing from state-linked banks to offer financing to their big customers in recent years – giving them an advantage on some contract negotiations, wrote Kane.

With operations in more than a dozen Latin American countries, Telefonica said the network equipment and commissioning services from Ericsson were for various subsidiaries across the world. Lately, in fact, the Spanish operator has announced deals with Ericsson to roll out superfast 4G networks in Brazil, Chile and Britain.

The report shows that the lead banks on the latest 10-year deal were Societe Generale, Banco Santander, Bank of Tokyo-Mitsubishi UFJ and BNP Paribas. Last week, the leading European operator reported full-year results that showed signs of stabilization in its depressed home market.




Edited by Braden Becker


FOLLOW MobilityTechzone

Subscribe to MobilityTechzone eNews

MobilityTechzone eNews delivers the latest news impacting technology in the Wireless industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter