After AT&T’s big announcement this week that it has chosen to work with Ericsson to integrate open RAN technologies in its network, Nokia’s stock took a hit. Prior to the AT&T announcement, Nokia’s stock was trading at around $3.49 per share. But today, it’s trading at $3.06, a 12.68% drop in the last five days.

Nokia issued a lengthy statement in response to the news from AT&T and Ericsson. It said Nokia has a wide-ranging relationship with AT&T, supplying products and services across wireless, wireline and other network technologies.

Indeed, AT&T CEO John Stankey said at a UBS investor conference yesterday that open RAN will make its network open to more suppliers. And he said over the long-term “It’s entirely possible Nokia could be one of those suppliers of that more diverse vendor base that we ultimately start working toward. We’d obviously like to see multiple players there.”

But AT&T’s choice of Ericsson will certainly hurt Nokia in the shorter term. Nokia said yesterday that revenue from AT&T accounted for 5%-8% of its Mobile Networks sales year to date in 2023. The company had already announced cost cuts, which will partially mitigate the impact of AT&T’s decision. Nokia expects its Mobile Networks to remain profitable over the coming years, but now its goal of achieving double digit operating margin will probably be delayed by up to two years.

Nokia also pointed out that it’s been working on open RAN and recently was chosen by Japan’s NTT Docomo for its commercial 5G open RAN deployment.

Tech implications of AT&T’s choice

Fierce Wireless reached out to John Baker, SVP of business development with Mavenir, to discuss how AT&T’s choice of Ericsson for open RAN might affect the open RAN technology landscape.

We asked if AT&T’s choice of Ericsson was kind of going against the whole concept of open RAN — which is to be able to use multiple vendors.

Baker said, “The best way to look at it is: Ericsson is the systems integrator. It’s clever to decide who your systems integrator is first. Over time, providing that everything is open and interoperable, they can bring in components from any vendor. Radios from Fujitsu and Mavenir could be running on the same baseband, or baseband software from another supplier can run on the same Dell hardware, for instance.”

He said it will be important that whatever Ericsson deploys complies with specifications set by the O-RAN Alliance. Ericsson could, theoretically, use products or software from other vendors on behalf of AT&T, and “they don’t have to do everything themselves anymore,” said Baker.

In terms of Nokia’s position, he said, “If Nokia is truly playing in open RAN this doesn’t stop Nokia from coming back with good open RAN products, at the end of the day.”

Baker said Mavenir is very happy that AT&T is moving forward with open RAN. The vendor already does open RAN work with Dish Wireless. But having AT&T advance the technology will be great for the open RAN ecosystem.

ULPI specs for Massive MIMO radios

There’s been some discussion within the O-RAN Alliance in regard to an uplink modification to open fronthaul for Massive MIMO radios. Ericsson was a leader at an O-RAN Alliance event in Osaka, Japan, in June 2023, to establish the uplink performance improvement (ULPI) specification.

Baker explained that today, there is 7.2 CAT A and 7.2 CAT B interfaces for Massive MIMO. But there are two new interfaces, suggested by Ericsson, which have the extension “ULPI,” and move the Equalizer from the compute DU to inside each radio on the tower.

“There is still a lot of work to do in completing the specification, and it is only applicable to Massive MIMO,” said Baker. “Simple radios such as 4T4R, 8T8R, Dual Band and Triple band would still use CAT A interface.”
The challenge for DU vendors is to support all four interfaces on the DU, which Mavenir is committed to do.

“If the operator chooses an Ericsson DU that does not support all interfaces, they will be locked to Ericsson as the supply,” said Baker. “They can also buy another vendor’s DU that supports all interfaces.”

Baker said it’s important that Ericsson’s equipment be backward compatible with the CAT A and CAT B interfaces. He said the DU is essentially software, which can be deployed on the box fairly quickly. Although Ericsson has a preference for the new ULPI interfaces, the O-RAN Alliance says open RAN products must support CAT A and CAT B on the DU.

“The real issue,” said Baker, “is to make sure that the DU, over time, is upgradable and does support all interfaces. I think Ericsson is going to have to grapple with it because the product is going to have to be certified as O-RAN compliant.”

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