Big Board Alerts

December 5, 2023
Ericsson wins over Nokia in pivotal $14B AT&T network upgrade

Ericsson has clinched a monumental $14 billion contract to modernize AT&T Inc.’s wireless network, according to a recent Bloomberg report. This deal, focusing on the development of an open network, marks a pivotal shift in the industry and a notable win over Ericsson’s long-standing rival, Nokia.

Ericsson’s agreement with AT&T introduces a new era of network flexibility, allowing the U.S. carrier to diversify its vendor relationships rather than being tied to a single supplier. This strategic shift, hailed by the Stockholm-based Ericsson, is set to unfold over five years, primarily upgrading AT&T’s infrastructure to advanced 5G technology.

The announcement dealt a significant blow to Nokia, with its shares plummeting by 5.9% in Helsinki. The Finnish company acknowledged that this development could delay its financial targets by up to two years. Currently, Ericsson supplies two-thirds of AT&T’s network, with Nokia covering the remaining third. In contrast, Ericsson’s shares experienced a 6.1% surge in Stockholm following the news.

The contract underscores the industry’s move toward open radio access network (OpenRAN) technology, which is more adaptable and cloud-friendly compared to traditional integrated solutions. This approach allows a broader range of vendors to contribute, aligning with AT&T’s vision for a more flexible and innovative network infrastructure.

AT&T’s decision to invest in OpenRAN technology comes at a time when the global 5G spending is experiencing a downturn. AT&T CEO John Stankey noted that the market slowdown provided an opportunity to push vendors toward more progressive open network solutions.

Despite Ericsson’s win, AT&T’s CEO emphasized that Nokia might still play a role in the new network as one of the potential suppliers. Nokia’s CEO Pekka Lundmark expressed disappointment over AT&T’s decision, noting the significant impact on the company’s sales.

Western shift to OpenRAN post-Huawei ban

The move toward OpenRAN gained momentum in the West following the ban on China-based Huawei Technologies Co. infrastructure. Governments are increasingly advocating for a more competitive mobile technology ecosystem, extending beyond the traditional dominance of Scandinavian firms.

AT&T envisions the new network to rapidly leverage next-generation wireless technology. The company anticipates benefits such as sustainable, lower-power networks with enhanced performance. Chris Sambar, AT&T Network’s executive vice president, highlighted the creative potential and flexibility offered by having multiple suppliers.

The post Ericsson wins over Nokia in pivotal $14B AT&T network upgrade appeared first on ReadWrite.

 

Latest Articles

DON’T MISS THE OPPORTUNITY TO JOIN OUR MARKET SUMMARY REPORT FOR A LIMITED TIME

By submitting this form on our website, you agree that we may collect and use your personal information for marketing, and for other purposes as set forth in our privacy policy, which we encourage you to review.