AT&T has chosen Ericsson for its new U.S telecom network, and is dropping Nokia. AT&T said on Monday it chose Ericsson to build a telecom network that uses only so-called ORAN technology. This ORAN technology will cover 70% of its wireless traffic in the United States by late 2026, marking a milestone for the new technology.
Open RAN deal with Ericsson
Open RAN (radio access network) promises to cut costs drastically for telecom operators as it uses cloud-based software and gear from many suppliers instead of relying on proprietary equipment supplied by such companies as Nokia, Ericsson and Huawei which do not work with each other.
While several telecom providers such as Telefonica and Vodafone have tested the Oran technology, mass adoption has been slow by existing carriers. New networks by Dish and Japan’s Rakuten use Oran technology.
AT&T and Ericsson deal
AT&T has been analyzing Open RAN for six months with a team of hundreds, an executive said, and has looked at multiple vendors and sought proposals.
“All of the new equipment that we are going to be putting out will be Open RAN capable,” as per Chris Sambar, president of AT&T Network.
AT&T’s spending could approach $14 billion over the five-year term of the contract with Ericsson, the company said.
Ericsson taking over Nokia as largest supplier
Winning the Open RAN deal will make Ericsson the largest supplier to AT&T as it slowly takes over Nokia’s share, the company said.
Nokia shares fell 8.7% in New York on Monday on speculation that the company might lose the AT&T contract, analysts said. In 2020, Nokia suffered a setback when Samsung won a $6.64 billion contract to supply 5G equipment to Verizon in the U.S.
Open RAN has struggled as major telecom vendors had resisted opening up their proprietary interfaces for other companies over fears of losing business.
U.S. telecom network for AT&T
Ericsson has now agreed to open up those interfaces across its footprint, Sambar said.
“You’ve got to give them something that they really want and in return, we are going to get something that not only AT&T wants but the entire industry wants,” he said.
AT&T will still have contracts which other Open RAN vendors outside
