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Ericsson has landed a critical deal with Deutsche Telekom to provide “5G-ready” network infrastructure across half of Germany.
The contract has been hailed as a coup for the struggling Swedish company, which has lost half of its value since the start of 2015 due to a series of profit warnings. It has pinned its hopes on securing a large portion of the spend on 5G networks in the coming years.
No financial details were signed.
The deal to supply radio access network kit to Deutsche Telekom, Europe’s largest telecoms company, is one of the first large contracts to be awarded in Europe aimed at gearing up for the next cycle of mobile network equipment.
5G networks will debut in 2018 at the Winter Olympics in South Korea but will not be rolled out commercially until 2020 or later. Deutsche Telekom will be able to upgrade the network supplied by Ericsson to 5G with a software download when it is ready to commercially launch in the coming years.
Nokia, an existing supplier, also vied for the five-year contract with the German company, and Deutsche Telekom has been developing “pre-5G” networks with China’s Huawei.
Ericsson, which will replace one of the incumbent suppliers, missed out on supplying Deutsche Telekom with both 3G kit and 4G equipment in the past two decades.
Ericsson said the new contract covers one of two geographic areas in Germany and that it will modernise existing 2G, 3G and 4G equipment.