Shares of Finland’s Nokia (NYSE:NOK) plunged to a three-year low, as the telecoms company lost out on a major deal to roll out a new network in the U.S. with industry juggernaut AT&T (NYSE:T).
Helsinki-listed Nokia shares were down sharply in London on the news that AT&T will be partnering with Swedish rival Ericsson, which will manufacture 5G equipment for the project at its factory in Lewisville, Texas. Stockholm-listed shares of Ericsson were up 7.4%.
AT&T spend is set to be near $14 billion over its five-year contract with Ericsson, the companies said late Monday. The partnership covers the deployment of an open radio access network (Open RAN) in the U.S., which AT&T expects to use for 70% of its wireless network traffic by late 2026.
The decision deals Nokia a significant blow through the loss of market share as a supplier to AT&T, which will see the replacement of existing Nokia equipment in several places.
Nokia CEO Pekka Lundmark called the news “disappointing,” but said that the company remained “fully committed” to Open RAN and had a strategy to diversify its business and improve profitability.
The firm is already facing a troubled financial picture, following a plunge in its third-quarter earnings as customers cut costs.
NOK shares skidded 17 cents, or 5.4%, to $2.99, while those for AT&T rocketed 58 cents, or 3.5%, to $17.24.
