AT&T and Nokia Sign Agreement to Build Fiber Network in the U.S.

Nokia announced on Tuesday that U.S. telecoms operator AT&T and Finnish network equipment maker Nokia have signed an agreement to build a fiber network in the United States.

This deal marks a significant step for both companies in expanding broadband access nationwide.

Context of the Agreement:

The collaboration follows Nokia’s loss of a major contract with AT&T to Swedish rival Ericsson, which was selected in December 2023 to develop a telecoms network projected to cover 70% of AT&T’s wireless traffic in the U.S. by late 2026.

With Ericsson securing this substantial deal, Nokia is seeking new growth opportunities in the fiber market, particularly after AT&T’s $14 billion five-year agreement with Ericsson.

Details of the Fiber Deal:

Nokia has not disclosed the financial value of the new five-year fiber deal but has referred to it as “a significant milestone.” ​

The agreement aims to enhance broadband access for millions of users in the U.S., bolstering AT&T’s extensive fiber network, which reached 27.8 million total fiber locations as of the second quarter of 2024.​

Market Outlook and Forecast:

In July, Nokia reported a 32% drop in profit; however, CEO Pekka Lundmark forecasted that net sales would significantly accelerate in the latter half of the year. This optimism is attributed to an improving fiber market in the U.S. and a $42 billion U.S. government initiative to enhance citizens’ access to high-speed broadband.

Nokia emphasized that the fiber deal with AT&T is “Build America, Buy America-compliant,” fulfilling the requirements for U.S. government funding. Additionally, in June, Nokia announced its acquisition of U.S. optical networking equipment maker Infinera in a $2.3 billion deal, positioning itself to benefit from the substantial investments being directed toward data centers to support the growth of artificial intelligence.