Ericsson Shares Jump After Winning Largest Deal Financially In Its History: Details

Telefonaktiebolaget L M Ericsson ERIC shares are trading higher by 4% after it got chosen by AT&T Inc T to lead the United States in commercial-scale open radio access network (Open RAN) deployment.

The deal is the largest financially in Ericsson's history, as per the company.

As per the 5-year contract term, Ericsson will leverage its USA 5G Smart Factory in Lewisville, Texas, to manufacture 5G equipment for this contract.

Moreover, AT&T will spend roughly $14 billion and build a telecom network that uses only so-called ORAN technology, covering 70% of its wireless traffic in the U.S. by late 2026.

Also, the companies expect to have fully integrated Open RAN sites in coordination with Ericsson and Fujitsu starting in 2024. 

Beginning in 2025, the company will boost this Open RAN environment across its wireless network in coordination with multiple suppliers.

AT&T projects higher competition in the U.S. RAN market to yield more innovation and greater efficiencies. 

Börje Ekholm, President and CEO of Ericsson said, "High-performance and differentiated networks will be the foundation for the next step in digitalization. I am excited about this future and happy to see our long-term partner, AT&T, choosing Ericsson for this strategic industry shift - moving to open, cloud-based and programmable networks." 

"Through this shift, and with open interfaces and open APIs, the industry will see new performance-based business models, creating new ways for operators to monetize the network. We are truly proud to be partnering with AT&T in the industrialization of Open RAN and help accelerate digital transformation in the U.S." 

The deal represents a significant win over Nokia Corporation NOK, Bloomberg reported.

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.

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