[1/2]File Photo: AT&T’s corporate logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. Portal/Brendan McDermid/File Photo Purchase license rights
STOCKHOLM, Dec 4 (Portal) – AT&T (TN) said on Monday it has chosen Ericsson (ERICb.ST) to build a telecommunications network using only so-called ORAN technology and transfer 70% of its wireless data traffic to the United States will cover by the end of 2026, marking a milestone for the new technology.
ORAN, or Open Radio Access Network, promises to dramatically reduce costs for telecom operators as it uses cloud-based software and equipment from many vendors rather than relying on proprietary equipment from companies like Nokia (NOKIA.HE), Ericsson and Huawei (HWT). UL) that do not work together.
While several telecommunications providers such as Telefonica (TEF.MC) and Vodafone (VOD.L) have tested the technology, mass adoption among existing network operators has been slow. New networks from Dish (DISH.O) and Japan’s Rakuten (4755.T) use Open RAN.
AT&T spent six months analyzing Open RAN with a team of hundreds, an executive said, looking at multiple vendors and soliciting suggestions.
“All new devices we will bring to market will be Open RAN capable,” AT&T Network President Chris Sambar told Portal.
AT&T’s spending could total up to $14 billion over the five-year life of its contract with Ericsson, the company said.
Winning the Open RAN deal will make Ericsson AT&T’s largest supplier 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 could lose the AT&T contract, analysts said. In 2020, Nokia suffered a setback when Samsung (005930.KS) won a $6.64 billion contract to supply 5G equipment to Verizon (VZ.N) in the US
Open RAN has struggled as major telecommunications providers have resisted opening their proprietary interfaces to other companies for fear of losing business.
Ericsson has now agreed to open these interfaces across its network, Sambar said.
“You have to give them something they really want, and in return we get something that not just AT&T but the entire industry wants,” he said.
AT&T will continue to have contracts with other Open RAN providers outside of this agreement.
AT&T expects to have fully integrated Open RAN sites by 2024, operating in coordination with Ericsson and Fujitsu (6702.T). In 2025, the company’s network will include equipment from multiple suppliers.
“This is not a subscale effort. This is where we and our partner are approaching this 100%, so we believe this will really change the industry,” Sambar said.
Reporting by Supantha Mukherjee in Stockholm. Editing by Matthew Lewis
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