AT&T has chosen Ericsson to build its communications network using ORAN, a new cost-saving technology covering 70% of US wireless traffic, by the end of 2026. In the fifth year, $14 billion will increase Ericsson's stake. The company, one of the largest mobile phone companies in the world, weakened Nokia's presence in the North American market.

 

Ericsson shares rose 9% and outperformed the pan-European STOXX 600 for its best day in years. Nokia shares fell 8% to the bottom of the index early Tuesday after AT&T announced late on December 4.

 

The Open Radio Access Network (ORAN) promises significant cost savings for telecom operators using cloud-based systems and tools from multiple vendors. While telecom providers like Telefonica and Vodafone have tested the technology, mass adoption has been slow. New networks by Dish and Japan's Rakuten use Open RAN. AT&T has been analyzing Open RAN for six months with a team of hundreds, an executive said and has looked at multiple vendors and sought proposals.

 

"All of the new equipment that we will be putting out will be Open RAN capable," Chris Sambar, executive vice president of Network at AT&T, told Reuters.

 

The company said AT&T's spending could approach $14 billion over the five-year contract term with Ericsson. The company said that winning the Open RAN deal will make Ericsson the largest supplier to AT&T as it slowly takes over Nokia's share.