AT&T Collaborates With Ericsson To Introduce ORAN Technology to the US

AT&T recently made a major move in the telecommunication industry that helps reshape the landscape. The company has partnered with Ericsson to establish a telecom network based on the cutting-edge ORAN (open radio access network) technology. This innovative system is set to encompass around 70% of AT&T wireless traffic across the United States by the end of 2026. This marks a significant leap in the evolution of this new technology on U.S. soil.

ORAN technology occupies a unique space in the telecom world. It brings a drastic reduction in costs for telecom operators by utilizing cloud-based software and equipment from a variety of providers. This is a shift from the traditional dependence on proprietary equipment supplied by companies like Nokia, Ericsson, and Huawei, which aren’t interoperable.

The adoption of ORAN technology has been a mixed bag. While telecom providers such as Telefonica and Vodafone have experimented with the technology, it hasn’t seen widespread use by current operators. However, new networks like Dish and Japan’s Rakuten are now utilizing Open RAN.

“All of the new equipment that we are going to be putting out will be Open RAN capable. You’ve got to give them something that they really want and in return, we are going to get something that not only AT&T wants but the entire industry wants. This is not a subscale trial. This is us and our partner going 100% all in on this, so we think this is really going to change the industry.”

Chris Sambar, executive vice president of AT&T Network, via Reuters

AT&T has dedicated extensive resources to the evaluation of Open RAN, conducting a six-month analysis with a large team. They’ve reviewed numerous vendors and considered several proposals. Chris Sambar, AT&T Network’s executive vice president, confirmed that all the new equipment they’re deploying will be Open RAN compatible.

The contract with Ericsson could see AT&T’s expenditure nearing $14 billion over a five-year period. This successful bid will cement Ericsson’s position as AT&T’s largest supplier, gradually replacing Nokia’s share in AT&T’s operations. This shift has led to speculation about Nokia’s future contracts, causing its shares to drop 8% on the New York Stock Exchange. In 2020, Nokia experienced a stumble when Samsung secured a $6.64 billion contract to offer 5G equipment to Verizon within the U.S.

Open RAN’s progress has been hampered by significant vendors’ reluctance to make their proprietary interfaces available to other companies, fearing business loss. However, that’s changing now, with Ericsson deciding to open its interfaces, making this a beneficial move for the whole industry. AT&T will maintain contracts with other Open RAN vendors outside of this deal to ensure a smooth transition.

Expect to see fully integrated Open RAN sites in operation with coordination from Ericsson and Fujitsu commencing in 2024. By 2025, AT&T’s network will include equipment from many suppliers.