AT&T replaces Nokia with Ericsson
The Swedish network equipment supplier Ericsson will supply the US company AT6T. In return, the latter is throwing Nokia out the door. One reason for winning the contract is the Swedish company's promise to produce the parts in the USA. The competitor from Finland has to adjust its targets after the defeat.
The mobile phone provider AT&T has largely turned its back on Nokia for the supply of telecommunications equipment. The US group has concluded a deal with Ericsson for hardware and services worth up to 14 billion US dollars over a period of five years. Nokia warned that its margin targets in the affected segment would now only be achievable at a later date. The Finnish company's shares slumped in the aftermarket, while the Swedish company's shares rose.
AT&T intends to implement the change from next year. By the end of 2026, 70 percent of mobile traffic is to run via open platforms. The US company wants to accelerate the renewal of its network and use more hardware and software from niche providers such as Corning, Dell, Fujitsu and Intel in the coming years. Ericsson had previously agreed to open up its software to rival systems.
The move will replace Nokia as a supplier, which has deployed about a third of AT&T's wireless network, according to Chris Sambar, AT&T's network chief. Ericsson won the contract because the Swedes followed the "Buy America" guidelines and produced the equipment at their new plant in Texas, according to a dealer.
Nokia said AT&T had contributed 5 to 8 percent of sales in the Mobile Networks segment this year. The cost reductions already announced should partially offset the impact of the US company's decision. Nokia assumes that Mobile Networks will remain profitable in the coming years. However, the timetable for achieving a double-digit operating margin will be delayed by up to two years.
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Sony Ericsson, a former prominent player in the mobile phone industry, may find opportunities in the shift as AT&T looks to diversify its hardware and software suppliers, potentially including niche providers like Dell and Intel. Nokia, once a significant supplier to AT&T, will need to adapt to this change and potentially explore partnerships or collaborations with other telecommunications companies, such as Sony Ericsson, to maintain its business momentum.
Source: www.ntv.de
