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Ericsson, who already supply AT&T with half of its RAN technology, will now become the operator’s dominant RAN equipment vendor
AT&T has announced that it has chosen Ericsson to supply the Open RAN equipment that will carry 70% of its wireless traffic by the end of 2026.
The five-year deal is worth a huge $14 billion and represents a significant shakeup for the North American market, with the new deal seeing some Nokia equipment in AT&T’s network being replaced with Ericsson tech in certain areas.
Fujitsu, Dell, and Intel are also notably part of AT&T’s Open RAN rollout.
“With this collaboration, we will open up radio access networks, drive innovation, spur competition and connect more Americans with 5G and fibre,” said Chris Sambar, Executive Vice President at AT&T, in a joint press release with Ericsson.
“We are pleased that Ericsson shares our support for Open RAN and the possibilities this creates for American digital infrastructure,” he continued.
“High-performance and differentiated networks will be the foundation for the next step in digitalization,” said Börje Ekholm, President and CEO, Ericsson.
Upon the news, Ericsson shares rose 9% to their highest price ever, while Nokia’s plummeted 8%.
Nokia CEO Pekka Lundmark called the news “disappointing” in a statement, but emphasised that Nokia has the right strategy to crate value for shareholders in the future.
Omdia analyst James Crawshaw shared his thought on a LinkedIn post this morning, adding “I think Ericsson must have offered AT&T a really nice price for this deal. Perhaps Nokia was not prepared to go so low”.
The news comes as another blow for Nokia, who recently announced the cutting of 14,000 jobs in an effort to reduce company costs. Nokia aims to shrink its costs by £1 billion by 2026, following the company’s latest financial results that showed net sales were down 40% in Q3 of this year, a fact Nokia ascribed to challenging global market conditions.
It is worth noting that Nokia are not alone in their cost-cutting efforts. Ericsson announced its plan to cut 8,500 job this year as a result of the difficult economic conditions.
But beyond the deal’s implications for the RAN titans Ericsson and Nokia, it could also have major ramifications for Open RAN technology itself, being one of the largest financial commitments to the technology anywhere in the world. Until now, all but a handful of operators have been reluctant to deploy the technology at scale, but with this investment AT&T is making its long-term commitment clear.
“In collaboration with Ericsson, AT&T’s embrace of Open RAN marks a pivotal milestone for the industry. The inclusion of incumbent suppliers underscores the critical role of their expertise and established relationships in driving the success of this open and disaggregated journey,” commented Kristian Toivo, Executive Director of the Telecom Infra Project, one of Open RAN’s leading cheerleaders. “This is a compelling proof point, affirming that Open RAN is unmistakably steering in the right direction, with major vendors converging into the ecosystem. Together, we are shaping a future where innovation and collaboration redefine the landscape of telecommunications.”
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