Ericsson lands $3.5 billion T-Mobile US 5G contract

Gerald Bowen
September 13, 2018

As the commercial launch of 5G services rapidly approaches, Ericsson (NASDAQ: ERIC) and Intel, together with AT&T and T-Mobile are showcasing the power of the 5G ecosystem. Between deals with Ericsson and Nokia, T-Mobile has now invested $7 billion into expediting its nationwide 5G rollout. On Tuesday, the nation's third largest wireless provider matched that investment through a similar agreement with Ericsson.

Under the deal, Ericsson will supply 5G New Radio hardware. Just last week, the Swedish company unveiled several new features for its Ericsson Radio System (ERS), including a RAN Compute element that should help operators like T-Mobile to roll out virtualized or cloud RAN systems, whereby the baseband functions are run as software programs on common, off-the-shelf equipment.

As the USA races toward commercial 5G services, Ericsson achieves significant milestones with AT&T, Verizon and T-Mobile on the road to making 5G a reality for consumers. "We are excited about our partnership with T-Mobile, supporting them to strengthen, expand and speed up the deployment of their nationwide 5G network".

Niklas Heuveldop, President and Head of Ericsson North America, said that the company had recently made a decision to increase its investments in the U.S. to be closer to customers and better support them with their accelerated 5G deployments; thereby bringing 5G to life for consumers and enterprises across the country.

From T-Mobile's announcements, it seems the operator will be dividing the labor and dual sourcing from the two companies equally, buying both hardware and software compliant with global standards from Ericsson and Nokia.

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Alignment between the radio, core and transport layers of the network has never been more critical to meet the requirements of 5G use cases such as enhanced mobile broadband, fixed-wireless access, and massive and critical IoT, said a statement from the company.

Manoj Leelanivas, chief product officer, Juniper Networks, said: "Commercial 5G is expected to represent close to a quarter of all global network traffic in the next five years".

Both European vendors have undoubtedly benefited from the U.S. clampdown on Chinese rivals Huawei Technologies Co.

To bolster its end-to-end 5G transport portfolio, Ericsson is now extending its partnership with Juniper Networks. The partners have successfully demonstrated Non-Standalone (NSA) 5G New Radio (NR) interoperability using 39 GHz spectrum - the frequency band that 5G services in North America will be introduced on.

And there are still hurdles to overcome, not least 5G's limited range and penetration.

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