Nokia has recently secured hefty contracts to build third generation networks in France, Germany, Australia, and the U.K. worth $2.2-billion, but not without a price. The deals are subject to Nokia loaning vendors the cash to pay for the deployment of the networks. In the case of France Telecom SA, one and half times the value of the equipment.

With European telecoms faced with mounting debt and subjected to Moody’s Investors Services lowering their credit ratings after spending $90-billion on license for 3G, they are now turning to suppliers to share some of the burden.

In the words of Chavan Bhogaita, analyst at Bear Stearns, "The equipment makers find themselves in a vicious circle. Provide the finance and you’re taking a big risk, as well as bearing the cost; don’t provide the financing and you won’t win the contracts."

Nokia says that it is willing to provide loans to cash-strapped telecoms in order "to support the introduction of mobile networks and multimedia services."

Nokia’s has recently signed contracts with the following telecoms:

• British Hutchison, for $440-million, and in return the telecom will receive £460-million in financing
• Australian Cable & Wireless Optus, for $430-million, making Nokia the sole contractor
• France Telecom’s mobile division, in which the telecom will $1.8-billion in financing
• France Telecom’s Orange mobile unit, for 1.5-billion euros to provide network equipment in the U.K. and will also work with Ericsson and Alcatel on networks for MobileCom in Germany and Itineris in France, respectively