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AT&T said 70% of its traffic will flow over open platforms by late 2026
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The operator is spending around $14 billion over a five-year contract with Ericsson
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This is terrible news for Nokia, which had been AT&T's major RAN supplier
AT&T is switching to Ericsson as a major radio access network (RAN) supplier and planning to deploy open RAN across much of its network by 2026.
Ma Bell said that it expects to spend around $14 billion over the course of a five-year contract with Ericsson. AT&T snubbed Nokia, a longtime RAN partner, for the new network revamp, going instead with its Swedish rival.
AT&T’s open RAN plan is for 70% of its wireless network traffic to flow across open-capable platforms by late 2026. The company expects to have fully integrated open RAN sites operating in coordination with Ericsson and Fujitsu, starting in 2024.
This move away from closed proprietary interfaces will enable rapid scaling and management of mixed supplier hardware at each cell site. Beginning in 2025, the operator plans to scale this open RAN environment throughout its wireless network in coordination with multiple suppliers such as Corning, Dell, Ericsson, Fujitsu, and Intel.
AT&T is the first major mobile network operator (MNO) that has announced an open RAN deal with Ericsson. When the Swedish RAN pusher first announced its open RAN plans at Mobile World Congress Las Vegas earlier this year, Ericsson VP Paul Challoner told Silverlinings that the vendor expects to have open RAN compliant equipment on sale by 2024.
Ericsson will use its factory in Lewisville, Texas in the manufacture of 5G equipment for this contract.
For AT&T, committing to open RAN with its suppliers deploying open hardware, migrating to cloud RAN and introducing third party radios will lead to more flexibility in choosing equipment, lower network costs and improved operational efficiencies, the operator said in a statement.
Nokia’s annus horribilis
The deal will come as another blow to Nokia. Nokia is now a “minority player” in all three of the major U.S operator networks (that is, AT&T, T-Mobile and Verizon), New Street Research (NSR) analysts said in a note on the deal. “This means that Ericsson is now the dominant vendor across the 3 major operators,” NSR stated.
Nokia has already said it will lose 5% to 8% of its mobile networks revenues because of the loss of the AT&T deal. This comes after Nokia announced a drop in overall third quarter revenue to $151.3 million and announced plans to cut 14,000 jobs worldwide.
“We believe that Nokia's remaining two major U.S. wireless operator customers, AT&T Wireless and T-Mobile USA, have not been enamored with the fan-based massive MIMO solutions from Nokia, based on our discussions with key people at both operators,” analyst Earl Lum at EJL Wireless Research wrote in an article on LinkedIn.
Maybe the large fans needed to cool the massive arrays supplied by Nokia caused a major stink at AT&T and blew up a lot of bad air?