Nokia has acknowledged AT&T’s intentions to lead a significant Open RAN (Open Radio Access Network) deployment in collaboration with rival Ericsson over the upcoming five years.
Consequently, Nokia foresees a decline in revenue from AT&T in its Mobile Networks sector over the next 2-3 years, accounting for 5-8 percent of year-to-date net sales in 2023. To counteract this impact, Nokia has already initiated measures to reduce its cost base, albeit expecting a potential delay of up to two years in achieving a double-digit operating margin for Mobile Networks.
Despite this projection, Nokia emphasizes its steadfast commitment to innovation, boasting significant market share gains in 5G since Q1 2022 among top RAN suppliers, reaching 29 percent in Q3, excluding China (source: Dell’Oro).
The telecom networking equipment company has heavily invested in leading radio technology and a competitive product portfolio, positioning itself as one of the few global vendors with substantial scale and R&D capabilities to deliver cutting-edge solutions.
Nokia’s dedication to Open RAN remains unwavering, having emerged as a recognized leader in the field. The company, alongside its partner ecosystem, strives to offer increased choices and top-notch performance within the Open RAN sphere. Recent milestones include Japan’s NTT Docomo selecting Nokia’s O-RAN 5G network for commercial deployment.
Pekka Lundmark, President and CEO of Nokia, expressed disappointment regarding AT&T’s decision but reiterated Nokia’s confidence in its strategic direction, aiming to create value for shareholders by diversifying its business and improving profitability. Lundmark assured customers of ongoing R&D investments to develop market-leading products.
Nokia intends to delve deeper into its strategies for Mobile Networks and Cloud and Network Services during its upcoming Investor Progress Update event in Espoo, Finland, scheduled for December 12th.
AT&T Spearheads Open RAN Deployment with Ericsson in a $14 Billion Initiative
In a groundbreaking move, AT&T has announced plans to take the lead in the United States by deploying a commercial-scale Open RAN in collaboration with Ericsson. This project, estimated to approach a remarkable $14 billion expenditure over a five-year period, aims to advance the telecommunications industry’s efforts and foster a more robust network infrastructure ecosystem.
AT&T’s vision for Open RAN involves directing 70 percent of its wireless network traffic through open-capable platforms by late 2026. The company anticipates fully integrated open RAN sites operational with Ericsson and Fujitsu collaboration starting in 2024. This shift away from closed proprietary interfaces is expected to facilitate rapid scaling and efficient management of diverse hardware at individual cell sites.
The collaboration between AT&T and Ericsson marks a crucial milestone in the 5G innovation cycle, positioning AT&T to capitalize swiftly on forthcoming wireless technology and spectrum advancements. The move toward an open, programmable network is envisioned to deliver sustainable, high-performance networks, elevating user experiences.
Chris Sambar, Executive Vice President of AT&T Network, highlighted the collaboration’s significance in driving innovation, spurring competition, and extending connectivity to more Americans with 5G and fiber.
Borje Ekholm, President and CEO of Ericsson, expressed enthusiasm for the strategic shift towards open, cloud-based, and programmable networks, foreseeing new performance-based business models that could revolutionize the industry.
Ericsson’s USA 5G Smart Factory in Lewisville, Texas, renowned for its efficiency and automation, will play a pivotal role in manufacturing 5G equipment for this collaboration. The factory, powered by renewable electricity, recently completed an expansion, reaffirming Ericsson’s commitment to U.S. infrastructure laws.
AT&T’s commitment to Open RAN aligns with its strategy of providing seamless connectivity across wireless and broadband fiber networks. The collaboration aims to enhance AT&T’s wireless network in North America and expand its reliable 5G network, leveraging the anticipated spend under the Ericsson contract.
Conclusion
Announcements from Nokia, Ericsson and AT&T reflect the evolving landscape of telecommunications, emphasizing technological advancements and strategic shifts toward open, programmable networks. While Nokia prepares for potential revenue adjustments following AT&T’s Open RAN plans, AT&T’s partnership with Ericsson signals a significant leap towards a future of enhanced connectivity and innovation in the United States.
