Telefonaktiebolaget L M Ericsson ERIC witnessed its stock surge by 4% following the news that it had been selected by AT&T Inc T to spearhead the deployment of open radio access network (Open RAN) in the United States.
In what is proclaimed as its largest financial deal to date, Ericsson is set to take center stage in a 5-year contract to manufacture 5G equipment at its USA 5G Smart Factory in Lewisville, Texas, for AT&T’s telecom network construction, which will exclusively utilize ORAN technology, covering 70% of its U.S. wireless traffic by late 2026 with an investment of approximately $14 billion.
The contract also envisions the integration of Open RAN sites starting in 2024, alongside Ericsson and Fujitsu, with further expansion across AT&T’s wireless network from 2025 in collaboration with multiple suppliers.
AT&T foresees intensified competition in the U.S. RAN market leading to increased innovation and improved efficiencies.
Börje Ekholm, President and CEO of Ericsson, expressed his enthusiasm for the strategic move towards open, cloud-based, and programmable networks, asserting that this shift will pave the way for new performance-based business models within the industry.
The monumental deal with AT&T signifies a significant triumph over its rival, Nokia Corporation NOK, as reported by Bloomberg.
Price Action: ERIC shares are up 4.76% at $5.50, while NOK is down 6.3% at $2.96 premarket on the last check Tuesday.
Photo Via Company