Telecommunication equipment giants Ericsson and Nokia continue to wobble operationally but are taking divergent paths toward stability.

Ericsson is spinning a lot of plates hoping to generate some operational momentum, though much of that continues to rely on its North America operations. The Nordic vendor posted another quarter of flat revenues, but CFO Lars Sandstrom cited “very strong growth in North America for the second quarter in a row with some customers selectively increasing investments.”

Ericsson is supplying 5G and radio access network (RAN) equipment to all of the major North American operators, including a foundational part of AT&T’s robust open RAN initiative. That program was announced late last year, and is starting to hit the market.

“North America continued to be very strong and grew by 55% year-over-year, driven by and helped by strong deliveries related to our recent AT&T contract win that's now coming into delivery phase,” Ericsson CEO Börje Ekholm said during the earnings call.

AT&T and Ericsson also completed a test call across the commercial cloud RAN infrastructure and stated, “third-party vendors will be able to use this configuration for open RAN in the future.”

Rethink Research’s Philip Hunter in a recent blog post noted that AT&T adding another vendor to run on top of the Ericsson platform was an important step for the broader open RAN ecosystem.

“Ericsson’s dominance in the U.S. as the only supplier of RAN components in large numbers to the country’s major telcos underlines the urgency of realizing that longer term open RAN goal of greater multivendor interoperability, which AT&T now admits it is working towards,” Hunter wrote.

Elkholm also stated that the vendor was seeing “selective network investments by other large customers.”

T-Mobile US is using Ericsson’s platform to power its recently launched 5G On Demand product, which the carrier is hawking as an easy way to deploy temporary private 5G services. Ericsson is also part of T-Mobile US’ AI-RAN Innovation Center that will be used to tie together cloud-based RAN and artificial intelligence (AI).

While Ericsson is riding some telecom momentum, Nokia continues to struggle in that space and is looking at alternative verticals to drive future growth.

Nokia CEO Pekka Lundmark during the vendor’s latest earnings call pegged the telecom-related total addressable market (TAM) at more than $85 billion, or more than four-times the data center TAM, but added that the latter has more growth opportunity for the vendor.

“Even though the telco TAM is expected to recover somewhat next year, we have to be realistic,” Lundmark said. “Telco TAM will never be a significant growth market so the only way to grow there will be through taking market share, which we have cost targeting, but it’s not the growth market. … Data centers will be our No. 1 growth target for the coming years. There will be others as well, but that will be the No. 1.”

That goal has seen Nokia expand into the data center space with new platform offerings. Lundmark noted that this direction opens opportunities across different markets.

“If you look at what even some of the operators like T-Mobile did in their Capital Markets Day, they are talking about an opportunity to look into GPU-as-a-service as an add-on to their business,” Lundmark said. “And then, of course, there is the significant hyperscaler opportunities and smaller data center opportunities.”

Lundmark’s T-Mobile US reference was tied to that carrier’s CEO telling investors that it could look to turn its cell site locations into edge data centers or cloud connections that can in turn better serve AI workloads.

“These kinds of AI workloads will increasingly demand that processing have happen on the device, which we’re starting to see but there are obvious limitations there, or on a cloud near the device, and that’s a business opportunity that we see in the future,” T-Mobile US CEO Mike Sievert said.

Lundmark’s “significant hyperscaler opportunities” quest could get a boost from the vendor’s pending $2.3 billion acquisition of optical networking provider Infinera.

Lundmark noted that the Infinera deal “will significantly increase our scale in North America and exposure to webscale customers,” and that it will leave Nokia “extremely well positioned for future growth and, importantly, toward new AI-driven data center opportunities.”

Nokia’s alternative telecom approach is also apparent with its API strategy where it continues to take a different path than its Nordic rival.

Ericsson last month struck a deal with a dozen of the world’s largest telecom operators including AT&T, T-Mobile, Verizon, and Vodafone have partnered with Ericsson and Google Cloud on a new commercial API joint venture targeted at taking advantage of the cloud ecosystem to drive revenues from their telecommunication network assets. The for-profit venture will work with Ericsson’s Vonage division and Google Cloud, which will provide access to the hyperscaler’s developer ecosystem.

Nokia was notably absent from the lineup, instead stating plans to stick with its own telecom network API strategy. Lundmark during the earnings call praised the Ericsson-led effort as being a necessary accelerant toward the broader telecom API market opportunity but remained vigilant on Nokia’s plans to stay the course.

“We have … taken a slightly different approach than our competitor. We have developed all of this organically,” Lundmark said. “We came to a conclusion that we do not need to acquire a legacy best player to enter this market. We have developed this organically and with pretty good progress. We announced this initiative a year ago, and we are currently having more than 20 partners across the ecosystem, including 16 CSPs … so we are able to offer extremely attractive base of networks to the developers who want to use our APIs. So overall, this is a good thing to the industry.”

IDC predicts the worldwide telecom and network API market will be generating north of $6 billion in revenues per year by 2028. This includes the market surging at a 57.1% compound annual growth rate (CAGR) from the approximately $700 million in revenues generated last year to more than $6 billion in 2028.

The IDC report noted that this opportunity has put additional pressure on telecommunication service providers to be more aggressive in positioning themselves against more technologically advanced and focused industry segments that have historically taken most of this revenue opportunity.

“While the telecom industry has a mixed history of API monetization, its latest focus on novel network APIs is being championed by all leading telecom service providers to include global support from key API aggregators, such as the hyperscale cloud providers and leading [communication platform-as-a-service] entities,” Patrick Filkins, research manager for IoT and telecom network infrastructure at IDC, noted in the report. “Even so, the long-term success of these efforts is expected to largely fall to the broader ecosystem consisting of API aggregators and systems integrators that can generate the value propositions required for market education and adoption to take place.”