AT&T and Nokia sign multi-year deal to expand 5G and voice services

Nokia to enhance AT&T’s network automation and cloud-based voice core applications.

A screen at the New York Stock Exchange (NYSE) displays the Nokia Corporation logo in New York City, U.S., on May 24, 2023. Photo by Brendan McDermid/Reuters

By Hayu Andini and Adila Ghina

U.S. telecom giant AT&T and Finnish network equipment maker Nokia have signed a multi-year expansion agreement to enhance AT&T’s 5G network automation and voice services across the United States. The deal, announced by Nokia on Tuesday, marks a significant step in their long-standing partnership, despite AT&T’s previous decision to award a major network contract to Swedish competitor Ericsson.

This new agreement focuses on upgrading AT&T’s voice carriage through cloud-based core applications and deploying Nokia’s advanced network automation software. The partnership is expected to improve network efficiency, introduce new voice services, and integrate artificial intelligence (AI) and machine learning capabilities into AT&T’s infrastructure.

AT&T’s evolving partnerships in telecom network development

The agreement comes just over a year after AT&T chose Ericsson over Nokia for a massive $14 billion, five-year deal to build a telecom network expected to handle 70% of AT&T’s wireless traffic by late 2026. That decision was a major setback for Nokia, which had previously been one of AT&T’s key network partners.

Despite losing out on that contract, Nokia secured a smaller five-year agreement in September 2023 to help AT&T build a fiber-optic network in the U.S. Now, with this latest expansion deal, Nokia is reinforcing its role in AT&T’s broader telecom strategy.

“This is an important deal for Nokia, reinforcing the strong and longstanding relationship between Nokia and AT&T,” said Raghav Sahgal, president of Cloud and Network Services at Nokia. “It covers multiple years and technologies that will enable new 5G functionality.”

AT&T’s Senior Vice President Yigal Elbaz echoed this sentiment, emphasizing the importance of Nokia’s technology in optimizing network operations and delivering enhanced services to customers.

Nokia’s role in AT&T’s 5G and AI-driven network expansion

As part of this new deal, Nokia will upgrade AT&T’s core network, allowing the carrier to introduce next-generation voice services. These advancements will incorporate AI and machine learning to enhance performance, improve call quality, and optimize network traffic management.

While neither company disclosed the financial terms of the agreement, the deal is expected to provide Nokia with a crucial foothold in the U.S. telecom market following its recent challenges in securing large-scale contracts.

The partnership highlights AT&T’s commitment to modernizing its network through a mix of suppliers, leveraging Ericsson’s radio access technology while utilizing Nokia’s expertise in cloud-based voice services and automation.

Nokia’s strong performance and AI-focused growth strategy

The announcement comes on the heels of a strong fourth-quarter earnings report from Nokia, which exceeded market expectations in both adjusted operating profit and sales. The Finnish company has benefited from increased demand for telecom infrastructure in North America and India, positioning itself for growth in 2025.

Beyond its traditional telecom business, Nokia is also making moves to capitalize on the artificial intelligence boom. Last year, the company announced a $2.3 billion acquisition of Infinera, a move designed to strengthen its capabilities in high-speed optical networking.

This acquisition aligns with the surge in AI-driven investments in data centers, including the ambitious $500 billion Stargate project backed by OpenAI, SoftBank, and Oracle. By expanding its presence in the AI and data center sectors, Nokia aims to diversify its revenue streams and remain a key player in the evolving telecom landscape.

AT&T and Nokia’s future in 5G and telecom innovation

AT&T’s latest partnership with Nokia underscores the carrier’s commitment to enhancing its 5G and voice service capabilities while maintaining strong relationships with multiple telecom equipment providers. The integration of Nokia’s network automation and AI-driven voice applications is expected to boost AT&T’s ability to deliver high-quality services to consumers and businesses.

For Nokia, the deal represents an opportunity to regain momentum in the U.S. telecom market, particularly after losing the major 5G infrastructure contract to Ericsson. As the company continues to invest in AI, cloud networking, and fiber infrastructure, it remains well-positioned to compete in the rapidly evolving telecommunications industry.

With both companies focused on innovation, this multi-year agreement is set to play a crucial role in shaping the future of AT&T’s network capabilities and Nokia’s presence in the U.S. market.