T-Mobile US has officially dismissed claims that it is abandoning Nokia as a supplier of network equipment. The company clarified its ongoing collaboration with both Nokia and Ericsson, emphasizing their roles in building the largest and fastest 5G network in the United States.
T-Mobile’s Official Statement
A T-Mobile spokesperson affirmed on Tuesday:
“T-Mobile works with both Nokia and Ericsson, who have helped us over the years build the largest and fastest 5G network in the nation. We continue to work with them on ensuring our customers have the best mobile network experience.”
This announcement came in response to speculation initiated by Earl Lum, president of EJL Wireless Research. Lum suggested in a LinkedIn post that T-Mobile might favor Ericsson over Nokia due to superior technology and possibly better pricing.
Market Reactions
The rumors had an immediate impact on Nokia's stock:
- Nokia’s Stock Plunge: Shares fell nearly 12%, marking the sharpest drop in almost a year, before closing 7% lower on the day.
- Rebound in Pre-Market Trading: After T-Mobile’s clarification, Nokia’s shares showed recovery, rising nearly 4% in pre-market trading.
The Bigger Picture
Nokia’s Market Challenges
Nokia has been losing ground in the US telecom market:
- AT&T’s Shift to Ericsson: AT&T moved away from Nokia, awarding Ericsson a $14 billion contract in 2023 to build a modern “open radio access network.”
- Verizon’s Preference: Verizon, another major US carrier, uses Ericsson and Samsung for its network infrastructure.
Analyst Perspectives
JPMorgan Chase analysts highlighted the significance of T-Mobile for Nokia’s business, stating:
“If Nokia were to lose T-Mobile US, it would mean that the technical turnaround promised by Nokia management in its wireless access business has failed.”
Conclusion
T-Mobile's reassurance underscores its commitment to both Nokia and Ericsson, quelling immediate market fears. However, Nokia’s declining market share and the growing dominance of Ericsson in the US telecom space signal ongoing challenges for the Finnish tech company. The situation highlights the fiercely competitive landscape of 5G infrastructure development.