Three years after losing Verizon, the US’s first 5G network operator due to slow delivery of the Intel 10 nm chipset, Nokia has suffered another blow. Recently, AT&T revealed plans to phase out Nokia’s RAN, making it more reliant on Ericsson, and is expected to cost the company nearly $1 billion in 2025, or 4% of Nokia’s total revenues last year. This has led to a 6.5% drop in Nokia’s shares price on Monday, while Ericsson’s shares rose.
Nokia stated it will remain a key partner for AT&T within both its Network Infrastructure and Cloud and Network Services businesses. Additionally, AT&T will continue to purchase products such as microwave radio links and femto solutions from Mobile Networks.
There is speculation that AT&T may have encountered issues with the fan units in Nokia’s latest massive MIMO (advanced 5G) radios, but Nokia has successfully deployed the same 5G radios in India, which experiences higher temperatures than the US. Another possible factor is that Nokia was slow in replacing Intel-based products. Nevertheless, if AT&T plans to spend $14 billion to build a virtual and open RAN for 70% of its traffic, Intel will likely be prevalent.
Despite losing AT&T, Nokia faces challenges but has announced new openRAN deals, such as with NTT Docomo in Japan. While Nokia is taking action to reduce its cost base, it is committed to protecting its research and development output to deliver market-leading products to customers.
Source: NokiaMob