US telecom giant AT&T and Finnish network equipment maker Nokia have signed a multi-year agreement to upgrade AT&T's voice services and 5G network automation. This deal comes after Nokia lost a significant contract to Swedish rival Ericsson in 2023, which led to Ericsson securing a$14 billion deal to build a network for AT&T covering 70% of its US wireless traffic by 2026. Nokia, however, remains involved with AT&T through a smaller agreement for fibre network development and a new contract focused on cloud-based voice applications and network automation.

The deal will enhance AT&T's core network, enabling new voice services, including the integration of AI and machine learning. Although the financial details of the agreement were not disclosed, Nokia's involvement is seen as crucial in bolstering its long-standing relationship with AT&T. Nokia's president of Cloud and Network Services, Raghav Sahgal, emphasised that this agreement will allow for the deployment of new 5G functionalities.

Nokia recently reported stronger-than-expected earnings, driven by higher demand for telecoms equipment, particularly in North America and India. The company remains optimistic about its prospects in 2025, especially with plans to capitalise on the AI boom. Last year, Nokia also agreed to acquire Infinera for$2.3 billion to strengthen its position in the growing data centre and AI markets.