AT&T taps Ericsson for US$14 billion network revamp, ousting Nokia
- The deal will have Ericsson build AT&T’s network with open architecture, which will let vendors compete to supply components, according to a company statement
- The effort will make Dallas-based AT&T a US leader in the technology, known as commercial scale open radio access network, or Open RAN
AT&T will tap Ericsson to modernise its US wireless network, a project that could amount to almost US$14 billion over five years.
For Ericsson, already responsible for about two-thirds of AT&T’s US network, the deal represents a significant win over rival Nokia, which accounted for the other third of AT&T’s business. It is another blow to Finland-based Nokia, which in October announced jobs cuts alongside broader struggles in its 5G infrastructure business.
Nokia fell 9.3 per cent in US postmarket trading, extending an earlier sell-off from speculation it could be removed from AT&T’s 5G equipment vendor list. Shares of Stockholm-based Ericsson rose 4.6 per cent late Monday in New York.
The deal will have Ericsson build AT&T’s network with open architecture, which will let vendors compete to supply components, according to a company statement on Monday. Most networks today are locked into a relationship with a single manufacturer.
The open architecture allows more flexibility in the network, Chris Sambar, executive vice-president of AT&T Network, said in an interview. “You get more creativity.”
In a statement, Ericsson chief executive Borje Eckholm called the deal a “strategic industry shift”, adding that it will create “new ways for operators to monetise the network”. Nokia declined to comment.
AT&T officials anticipate companies will compete to supply equipment for the network, including base stations at the foot of cell towers, antennas at the top, and connections in between, for example.
