AT&T (T.N) stated on Monday that it had chosen Ericsson (ERICb.ST) to build a telecom network entirely based on Open RAN (ORAN) technology, a major step toward adopting cutting-edge technology. This ground-breaking network is expected to carry 70% of AT&T’s cellular traffic throughout the United States by late 2026, marking a watershed moment for the telecom giant.
ORAN, which stands for open radio access network, deviates from standard telecom infrastructure by using cloud-based software and equipment from diverse providers. Unlike traditional systems from Nokia (NOKIA.HE), Ericsson, and Huawei (HWT.UL), which are not compatible, ORAN offers significant cost savings for operators by encouraging cooperation among varied vendors.
While Telefonica (TEF.MC) and Vodafone (VOD.L) have tested ORAN technology, broad adoption among incumbent carriers has been slow. Dish’s (DISH.O) and Rakuten’s (4755.T) networks, both of which use Open RAN, are notable outliers.
After a six-month examination involving hundreds of people, AT&T has selected Ericsson as its key partner in this revolutionary endeavor. AT&T Network President Chris Sambar said that all new equipment deployed by the business would be Open RAN compatible.
The financial commitment to this strategic change is significant, with AT&T projecting that it would spend almost $14 billion over the five years of the deal with Ericsson. This move boosted Ericsson to the top of AT&T’s supplier list, progressively replacing Nokia from its existing position.
Ericsson has vowed to open up its proprietary interfaces across its whole footprint in reaction to securing the Open RAN contract, a step previously rejected by other telecom suppliers. This strategic move is intended to boost industry innovation and cooperation.
Despite the exclusive agreement with Ericsson, AT&T has said that it will continue to work with other Open RAN providers. Beginning in 2024, the business expects to build fully integrated Open RAN sites in conjunction with Ericsson and Fujitsu (6702.T). AT&T’s network is planned to include equipment from numerous providers by 2025, indicating a thorough industry shift.
“This is not a small-scale study.” “This is us and our partner going 100% all in on this, and we believe it will change the industry,” said Chris Sambar, underscoring the company’s dedication to reinventing the telecoms sector.