Nokia signs major fibre deal with AT&T after losing network contract to Ericsson

Nokia has entered into a new agreement with AT&T to develop a fibre network throughout the United States. This strategic move comes after Nokia lost a significant telecoms network contract to its rival Ericsson. This deal saw the Swedish company securing a partnership to manage 70% of AT&T’s wireless traffic by late 2026. Despite this setback, Nokia is looking to bolster its position in the U.S. market through its new fibre deal with AT&T.

The Finnish network equipment maker did not disclose the financial terms of the agreement but described it as “a significant milestone” that will enhance broadband access for millions of users in the U.S. This partnership is expected to support AT&T’s extensive fibre network, which had passed 27.8 million total fibre locations as of the second quarter of 2024. The deal aligns with Nokia’s strategy to capitalize on the growing fibre market in the U.S., especially following AT&T’s $14 billion, five-year agreement with Ericsson.

Nokia’s CEO, Pekka Lundmark, has highlighted the improving fibre market in the U.S. as a key factor in the company’s growth strategy. In July, despite a 32% drop in profit, Lundmark forecasted that net sales would significantly accelerate in the second half of the year, driven by the U.S. market’s increasing demand for fibre networks and a $42 billion government initiative to expand citizens’ access to high-speed broadband.

Furthermore, the fibre deal with AT&T is “Build America, Buy America-compliant,” ensuring it meets the requirements for U.S. government funding. This compliance is essential as the U.S. government increases its investment in infrastructure projects. Nokia’s recent acquisition of U.S. optical networking gear maker Infinera, in a $2.3 billion deal, further underscores the company’s commitment to expanding its footprint in the U.S. market, especially in light of the growing demand for data centres fueled by the rise of artificial intelligence.