Ericsson announced to the public that it has partnered with American telecommunications operator AT& T has reached a five-year network transformation and digitization strategic agreement worth approximately $14 billion.
This is the largest transaction in Ericsson's history. According to information released by Ericsson, the company will utilize its recently expanded 5G intelligent factory in Lewis ville, Texas, USA to provide AT& T deploys 5G open wireless access network (Open RAN) within the United States.
And AT& The open RAN plan announced by T is that by the end of 2026, the network will cover 70% of wireless communication networks in the United States, becoming a new technological milestone. AT& T expects to collaborate with Ericsson and Fujitsu to operate fully integrated open RAN sites starting from 2024. Starting from 2025, the company will collaborate with multiple suppliers such as Corning, Dell Technologies, Ericsson, Fujitsu, and Intel to promote open RAN across the entire wireless network.
From an industry perspective, open RAN, as a standardized method of separating RAN hardware and software, will drive competition and innovation among network suppliers. The prominent advantage of this technology is that it significantly reduces the network deployment costs of telecommunications operators, as it uses cloud based software and devices provided by many suppliers, rather than proprietary devices that are incompatible with each other.
However, existing operators still hold a conservative attitude towards the large-scale adoption of this technology, which poses constraints on its promotion. Due to concerns among telecom operators about losing their existing business, many companies refuse to provide their dedicated interfaces to other suppliers. The Deloitte report concludes that due to technical engineering and integration challenges, the application of open RAN has been progressing slowly and has been questioned.
But AT& T's attitude towards open RAN is opposite to that of most telecommunications operators. According to Reuters citing informed sources, AT& T and a team of hundreds conducted a 6-month analysis of open RAN, examining multiple suppliers and soliciting suggestions. AT& The final conclusion drawn by T is that all new devices launched by the company will support open RAN.
In fact, AT& T has always been an active promoter of open RAN technology. In 2016, AT& T has partnered with numerous overseas operators to establish the X-RAN alliance, with the goal of replacing traditional hardware based RANs with open and replaceable standardized devices.
Ericsson and AT& After the news of T cooperation was announced, Nokia fell more than 9% in post market trading on the US stock market. Analysts say the reason is that the market speculates that it may lose AT& T's contract.