Nokia signs multi-year expansion deal with AT&T for voice and automation

HELSINKI (Reuters) - U.S. telecoms operator AT&T and Finnish network equipment maker Nokia have signed a multi-year expansion agreement to upgrade AT&T's voice carriage and 5G network automation in the U.S., the Finnish company said on Tuesday.

The deal comes a year after Nokia lost a major contract with AT&T to its Swedish rival Ericsson, which the U.S. operator chose at the end of 2023 to build a telecoms network that will cover 70% of its wireless traffic in the United States by late 2026.

After AT&T's $14 billion five-year deal with Ericsson, Nokia announced in September a smaller five-year deal with AT&T to build a fibre network in the U.S., before locking a second one on Tuesday for cloud-based voice core applications and the use of Nokia's network automation software.

"This is an important deal for Nokia, reinforcing the strong and longstanding relationship between Nokia and AT&T, and covering multiple years and technologies that will enable new 5G functionality," Raghav Sahgal, president of Cloud and Network Services at Nokia, told Reuters in an email.

Nokia said the upgrade to AT&T's core network would enable new voice services, such as the integration of AI and machine learning capabilities.

The companies declined to reveal the value of the deal.

"We are pleased to continue our relationship with Nokia to further optimize our network operations and enable new services that better support our customers' evolving needs," Senior Vice President Yigal Elbaz of AT&T's Technology & Network Services said.

Last week, Nokia reported stronger-than-expected fourth-quarter adjusted operating profit and sales, helped by higher demand for telecoms gear from mobile operators in North America and India, and was upbeat about 2025 prospects.

To tap the artificial intelligence boom, Nokia agreed to buy Infinera in a $2.3 billion deal last year to gain from the billions of dollars in investment pouring into data centres such as the $500 billion Stargate project backed by OpenAI, SoftBank and Oracle.

(Reporting by Anne Kauranen and Supantha Mukherjee, Editing by Louise Heavens)