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Nokia’s (NYSE: NOK) stock plunged as low as $2.94 at the opening bell on Tuesday after the company lost out on a $14 billion deal with telecom behemoth AT&T. According to a Monday press releases, the contract was instead won by Nokia’s rival Ericsson, which will produce 5G equipment for the project. 

Nokia Plummets to 3-Year Low as Rival Ericsson Wins $14B Deal

On Tuesday, Nokia’s shares fell to a more than 3-year low after the Finnish telecommunications company failed to secure a major deal to launch a new network in the US with industry giant AT&T. 

Nokia’s US-listed shares tumbled to $2.94 at the market open, marking its lowest level since March 2020. 

The drop came on the reports that AT&T will instead partner with Nokia’s rival, Ericsson, which will manufacture 5G equipment for the project at its plant in Texas. Ericsson’s Stockholm-listed shares were up 4.3% at the time of writing. 

According to the announcement, AT&T is expected to splash nearly $14 billion over its five-year contract with Ericsson. The deal involves deploying an open radio access network (Open RAN) in the US, which the American carrier intends to use for 70% of its wireless network traffic by late 2026. 

Nokia Trims Guidance After AT&T Blow

AT&T’s decision represents the latest blow for Nokia, affecting its market share as a supplier to the US’s largest wireless carrier. The Finnish telecoms firm’s CEO Pekka Lundmark, said the news is “disappointing,” but reiterated the company remains “fully committed” to Open RAN and has a strategy in place to drive profitability and diversify its business. 

Nokia has already been struggling financially, following a recent dip in its Q3 earnings amid reduced consumer spending. 

On Monday, the company issued a lowered outlook, likely contributing to today’s stock price decline. Notably, Nokia expected revenue from AT&T in its mobile division to decrease over the following two to three years. It believes the unit will remain profitable, though it now expects a delay in its timeline for reaching a double-digit operating margin of up to two years. 

AT&T accounted for 5% to 8% of Nokia’s mobile networks division’s revenue year-to-date. 

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