AT&T selects Ericsson over Nokia for the Open RAN telecom network
05 Dec 2023
AT&T announced on Monday, 4 December 2023, its decision to partner with Ericsson to construct a cutting-edge telecom network leveraging Open RAN (ORAN) technology. The initiative aims to encompass 70% of AT&T's wireless traffic in the United States by late 2026, signaling a significant advancement in the realm of telecommunications.
Open RAN, distinguished by its utilization of cloud-based software and equipment from diverse suppliers, stands poised to revolutionize the industry by substantially reducing costs. This approach starkly contrasts with conventional models that rely on proprietary equipment from singular vendors like Nokia, Ericsson, and Huawei, which often lack interoperability.
While Telefonica and Vodafone have experimented with ORAN, widespread adoption has been gradual among existing carriers. Notable exceptions include Dish and Japan’s Rakuten, whose new networks embrace Open RAN technology.
AT&T’s rigorous six-month evaluation of Open RAN involved a dedicated team of hundreds exploring multiple vendors and soliciting proposals. AT&T Network President Chris Sambar emphasized that all the new equipment they were going to put out would be Open RAN capable.
The financial commitment to this transformative endeavor could reach approximately $14 billion over the five-year contract term with Ericsson, AT&T disclosed. This move positions Ericsson as AT&T’s leading supplier, gradually superseding Nokia’s market share.
The impact on Nokia was evident, with shares plummeting by 8.7% in New York amid speculation about losing the AT&T contract. Nokia acknowledged the development on Tuesday, 5 December 2023, anticipating a decline in revenue from AT&T in its mobile networks business over the next two to three years.
Open RAN faced resistance from major telecom vendors unwilling to open up their proprietary interfaces. However, Ericsson’s breakthrough involves a commitment to share these interfaces across its network, according to Chris Sambar.
AT&T foresees fully integrated Open RAN sites collaborating with Ericsson and Fujitsu from 2024 onward, with a diversified supplier base integrated into the network by 2025. Sambar asserted that it was not a subscale trial, clarifying that both AT&T and their partner were fully committed, going 100% all in on this initiative. He expressed confidence that this approach would significantly impact and change the industry.