Assignment task:
AT&T Signs $14 Billion Supply Deal With Ericsson
Telecom giant's move would replace existing equipment from Nokia in many locations
By Drew FitzGerald
AT&T said its shift to Ericsson will fast-track its network overhaul and allow it to buy hardware and software from a broader range of suppliers in future years. PHOTO: PATRICK T. FALLON/AGENCE FRANCE-PRESSE/GETTY IMAGES
AT&T T -0.60%decrease; red down pointing triangle struck a deal with Ericsson ERIC 4.58%increase; green up pointing triangle to buy up to $14 billion of its hardware and services after the Swedish equipment supplier pledged to open up its software to competing systems.
The five-year agreement would move virtually all of AT&T's new purchases of some cell-tower equipment to Ericsson, replacing existing machinery from Finnish rival Nokia NOK -9.46%decrease; red down pointing triangle in many markets. The Dallas-based telecom giant said it plans to start the swap next year and aims to have 70% of its wireless network traffic passing through open platforms by late 2026.
The move will replace a supplier that makes up about a third of AT&T's wireless footprint, said Chris Sambar, the carrier's network chief.
AT&T said its shift to Ericsson will fast-track its network overhaul and allow it to buy hardware and software from a broader range of suppliers in future years. Ericsson, which until recently had dismissed open standards as unworkable for wireless networks, has now agreed to open up its proprietary software interfaces to companies that make competing products.
"We knew it wasn't going to happen unless we got a major wireless equipment maker involved and committed," Sambar said. "In return, because it's such a significant step up for them, they're committing to build us an open network."
The market for wireless radio transmitters that link billions of cellphones to the internet is dominated by Scandinavian suppliers Ericsson and Nokia and China's Huawei Technologies. South Korea's Samsung Electronics also sells some network equipment.
Several mobile network operators have tried gear from smaller suppliers only to face trouble blending technologies from multiple vendors. Wireless companies such as Rakuten Mobile and Dish Network have added open standards to new networks built from scratch, but they have yet to gain significant market share.
In today's business world, the ability to make a concise, persuasive, and well-written argument is a skill that will serve you well in your professional executive career. In this week's discussion, students are to choose a recent article (within the last 2 weeks) from the Wall Street Journal that is related to Strategic Management topics that we have studied thus far in class.
Part 1:
In your own words, summarize the article, including the purpose of the article and the main points that the author is communicating to the reader.
Part 2:
Provide an analysis of the article. For example:
Explain why you agree or disagree with the author and his/her assertions by supporting your own points with evidence or specifics examples from our class readings
Explain how the article relates to strategic management topics studied in class. Demonstrate your understanding of these connections by using terms and concepts learned in our readings and relate these concepts to real-world examples.