Telecommunications giant AT&T (T.N) announced that it appointed Ericsson (ERICb.ST) to construct an open-radio-access (ORAN) telecom network. In its press statement, Ericsson described this as an industry-defining collaboration worth approximately $14bn.
AT&T gets Ericsson on board to build ORAN network
The ORAN network will cover an estimated 70% of AT&T’s wireless traffic in the US. With completion expected at the end of 2026, this constitutes the largest financial deal in Ericsson’s history. The 5G-driven ORAN products and solutions will streamline AT&T’s operations. This will establish a cloud-native open network, which will cut costs as it eliminates reliance on companies such as Nokia (NOKIA.HE) and Huawei (HWT.UL).
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Ericsson plans to use its recently upgraded 5G Smart Factory in Lewisville, Texas, as the base to manufacture the relevant infrastructure. All these products will carry ‘Made in USA’ labels to comply with the Build America, Buy America Infrastructure Laws Act.
Reportedly, AT&T has been testing ORAN for the past six months through expansive teams and scrutinised multiple proposals before clenching the deal with Ericsson. In a Reuters interview, the president of AT&T Network, Chris Sambar, said:
All of the new equipment that we are going to be putting out will be Open RAN capable.
This agreement also positions Ericsson as AT&T’s prime supplier. Although this is good news for Ericsson, it does not bode too well for Nokia. Since the agreement was made public, rumours surfaced that Nokia may lose its AT&T contract. In a knee-jerk response, Nokia shares plunged by 8.7% in New York during Monday trading.
