- AT&T, the company that awarded Ericsson a big open RAN contract, has given Nokia a new 5-year deal for fiber broadband equipment
- The deal will ease Nokia's finances to some extent
- A Dell'Oro analyst said this deal could potentially be very lucrative for Nokia
Nokia was on the defense last week, disclaiming rumors that it might sell its mobile assets. But this week, Nokia is on the offense, announcing that it signed a new multi-year agreement to provide AT&T with fiber equipment. So, while the mobile business continues to struggle, at least there’s some good news on the fixed broadband side.
Under the new five-year agreement with AT&T, Nokia will provide its Lightspan MF and Altiplano platforms to help AT&T upgrade and expand its fiber network. An AT&T spokesperson said, “The deal extends terms for our current PON equipment and expands our relationship with the introduction of the MF platform.”
The parties declined to specify the value of the deal, but the new contract is certainly welcome news for Nokia.
Last year was a rough one for the Finnish company. Not only because the hype cycle for 5G had ended, but also because in December 2023, AT&T announced that it had chosen Ericsson for a $14 billion open Radio Access Network (open RAN) contract. In order to implement Ericsson’s open RAN equipment in its network, AT&T is removing existing Nokia RAN equipment in markets across the U.S.
That’s been a bitter pill for Nokia to swallow. In its second quarter 2024 earnings, the company reported a sales decline of 18% year-over year. And it revised its net sales planning assumptions down for the full year.
But now, the new contract with AT&T for fiber optical equipment softens the blow to some extent.
Jeff Heynen, VP or Broadband Access and Home Networking with Dell’Oro Group, said, “I don’t think the fixed networks business is ever going to be the scale of the [Ericsson] RAN contract.” But he said AT&T has had Nokia in its networks “forever,” and the new deal shows a “recommitment to a trusted supplier in their access network.”
In their announcement, the parties mentioned that the equipment Nokia will be supplying is Build America, Buy America-compliant. Heynen said that’s important as AT&T goes after Broadband Equity, Access and Deployment (BEAD) projects.
AT&T is already aiming to pass 30 million locations with fiber by the end of 2025. As of Q2 2024, it had passed almost 27.8 million. In addition, AT&T CEO John Stankey mentioned earlier this year that the company will easily hit its 30-million-passings goal, and if conditions are right, the company many zoom onward toward as many as 45 million fiber passings.
“This could potentially turn into a very lucrative contract for Nokia,” said Heynen.
Fiber technology
Nokia’s Lighspan MF platform is designed to support a range of PON technologies, from 10/25/50/100G. 10G (XGS-PON), a popularly deployed PON technology, will be certified with the MF platform. But AT&T will have the flexibility to upgrade to higher levels of PON simply by swapping out the optical modules, without having to switch out the entire chassis.
Although Nokia has been trialing 50G PON, the most popularly deployed PON technology continues to be 10G. In fact, the AT&T spokesperson said, “Greenfield will continue to be deployed with 10G XGS-PON.”
Nokia is also providing AT&T with its Altiplano Access Controller. Altiplano is the element management system for the Lightspan MF platform. “Beyond being a required component, we will look to leverage Altiplano capabilities to streamline back-office systems, reduce development costs, and accelerate time to market for future services,” stated the AT&T rep.