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.
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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.
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, the company said.
Having a number of suppliers can boost flexibility, lower costs and avoid reliance on non-US vendors classified as security risks such as Huawei Technologies, according to US officials.
AT&T, America’s No 3 mobile provider, said the new network will let it “quickly capitalise on the next generation of wireless technology”. Benefits include lower-power, sustainable networks with higher performance, the company said in its statement.
