Nokia CEO Pekka Lundmark stood by progress by its Mobile Networks business unit, despite pushing back a financial target in the wake of major US customer AT&T handing rival Ericsson a bumper open RAN contract.

In a statement, Nokia explained the decision by the operator to go with other vendors for an open RAN project would decrease its product line revenue from the US player over the next two-to-three years.

In its year-to-date, AT&T accounted for between 5 per cent and 8 per cent of net sales for the vendor’s Mobile Networks unit.

Cuts already announced are expected to partly mitigate the impact and, while it expects the unit to be profitable over the coming years, achieving a current ambition of a double-digit operating margin is expected to take up to two years longer than previously anticipated.

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Despite the blow, Nokia emphasised the quality of its products and “wide-ranging relationship” with AT&T across wireless, fixed, cloud and other network technologies. The company maintained it remained a “key partner” for the operator.

The Finnish vendor also took the opportunity to highlight recent increases in 5G market share and claim it was a “recognised leader” in open RAN.   

“AT&T confirmed to Nokia that while its decision was driven by reasons specific to AT&T, it believes Nokia has highly competitive products and services in Radio Access Networks and an accomplished R&D capability,” the vendor claimed.

Lundmark said while “the news from AT&T is disappointing, our Mobile Networks business has made significant progress in recent years, increasing our RAN market share and technology leadership”.

“I firmly believe we have the right strategy to create value for our shareholders into the future with opportunities to gain share, diversify our business and improve our profitability”.