Ericsson and Nokia are ramping U.S. investments in a move to better position themselves for taking advantage of government funding programs and in helping boost their position in the U.S. market that wants to eliminate telecommunications equipment from China-based vendors.

Ericsson’s efforts will see the vendor invest an additional $50 million into a “smart” production facility in Lewisville, Texas. Seeds for that plant were initially planted in mid-2018, when the vendor first moved to start producing equipment in the U.S. using a third-party prior to Ericsson opening the Lewisville facility in 2020, backed by a $100 million investment.

That plant has since been cranking out base station equipment for operators like Verizon and more recently was tapped to provide a majority of the equipment for AT&T’s $14 billion open RAN initiative. Ericsson during an event this week claimed the 300,000-square-foot facility employed more than 500 people. Equipment streaming from the plant is compliant with the U.S. government’s Build America Buy America Act (BABAA), which is a program targeted at investing funds into products and services built in the U.S.

Nokia garners funding support for U.S. jobs Nokia’s extension comes from a new “framework agreement” with the Export-Import Bank of the United States that will provide financing to Nokia’s partners. The bank in an independent Executive Branch agency that acts as the official export credit agency for the U.S. in facilitating the export of U.S. goods and services.

The agreement with Nokia calls for the bank to support Nokia as part of the bank’s Transformational Export Program, which has a China-focused component designed to help U.S. exporters facing competition from the People’s Republic of China.

Nokia will also use the agreement to begin reviewing ways to increase U.S. investment, manufacturing and job protection, “continuing the company’ s commitment to a strong North American presence.” This includes Nokia studying ways it can expand U.S. jobs in designated “Transformational Export” areas, which include Nokia focus areas like artificial intelligence (AI), wireless communications, quantum computing, renewable energy and storage, semiconductors, financial technology and high performance computing (HPC) (HPC).

“We are excited about this partnership with the Export-Import bank and the ways it will enable new investment and competitiveness in an increasingly vital space,” Lenny Floria, head of regional treasury and structured finance for the Americas at Nokia, noted in a statement. “As technology continues to transform the global marketplace, ensuring a safe, effective and reliable communications capability will become absolutely paramount. This partnership is just one step that Nokia is taking to ensure that we provide a host of business solutions and the capabilities to drive that technology for years to come.”

The deal builds on Nokia’s initiatives that started last year around expanding its U.S.-based manufacturing posture tied to the U.S. government’s Broadband Equity, Access and Deployment (BEAD) program. That program has allocated $42.5 billion in funds that will be distributed to all 50 states, the District of Columbia and five U.S. territories to expand broadband access, with equipment tied to that expansion required to be built in the U.S. as part of the BABAA program.

U.S. Vice President Kamala Harris spoke at one of Nokia’s events last year, touting the program’s benefits toward creating U.S. jobs.

“When we made this investment, we knew that there would then be an increased demand for fiber optic cable and for other products that connect people to the internet,” Vice President Harris said of that program. “We knew that the demand would skyrocket. We knew companies would increase production and hire more workers.”

“And whereas in the past, many of those jobs would have been created overseas, President Biden and I required that the materials and products used in these projects — from steel to electronics to fiber optic cable — must be made in America, by workers in America,” the VP added. “We are determined to create jobs in America and keep jobs in America.”

Closer work with U.S. defense Nokia this week also closed on its acquisition of the Fenix Group, which is a privately held company specializing in tactical communications solutions for the defense communities. The deal was initially announced late last year, and garnered approval from the Committee on Foreign Investment in the United States (CFIUS).

Mike Loomis, president of Nokia Federal Solutions, said in a statement that the deal “marks a significant step forward in our strategy to grow our defense business, as well as our overall U.S. strategy.”Nokia and Ericsson have a history of working with U.S. defense contractors on constructing telecommunication networks, with a recent emphasis on 5G technology.

“One of the beauties of 5G is that it is a standard and open technology, and that’s what creates this ecosystem of devices, of use cases, of equipment,” Steve Vogelsang, CTO for Nokia Federal, recently told SDxCentral in an interview. “Ericsson and Nokia, we both participate in that and so we’re aligned in helping to make that ecosystem work for the DoD. Of course, we’ll compete and we’ll try to get our fair share, but in the bigger mission we’re aligned.”

Telecommunication network security concerns Ericsson and Nokia’s moves also come as the U.S. government continues to focus efforts on removing equipment from China-based vendors like Huawei and ZTE from national telecommunication networks. Those programs include a so-called “rip-and-replace” initiative that is part of the federally mandated Secure and Trusted Communications Networks Act.

Most of this equipment was installed a decade ago as part of 4G LTE deployments and before security agencies began questioning the potential security risk of equipment from China-based vendors. A Federal Communications Commission report from 2022 estimated there were at least 24,000 pieces of Huawei or ZTE equipment spanning about 8,400 locations in U.S. telecommunication networks.

“Countries like China have amassed a significant share of the global communications equipment industry and are leveraging this dominance to flood the market, including in the U.S., with cheaper, less secure alternatives. That includes equipment from companies like Huawei and ZTE, which are controlled by the Chinese Communist Party,” U.S. House Energy and Commerce Committee chair Cathy McMorris Rodgers (R-WA) said during a House Committee meeting earlier this year. “Relying on this technology comes with significant risk. It could be used by the CCP to surveil Americans, steal people’s personal information and even shut down entire networks. Homes, schools, hospitals, our finance system and the military are all in jeopardy as long as this equipment remains part of our communications infrastructure.”