Nokia scored a notable contract extension from telecom giant AT&T to continue powering voice core services that tonally softens Nokia’s dwindling presence within the carrier’s network infrastructure.

The multi-year contract extension has AT&T updating its legacy Nokia IMS Voice Core Platform to include support for voice over new radio (VoNR) capabilities. The Nokia IP multimedia subsystem cloud-native architecture will run through its Cloud Platform that includes all the usual cloud advantages like greater automation and control.

AT&T will also use Nokia’s Digital Operations software platform to further support automation for the design, delivery, and management of customer services.

The update is a significant network move by AT&T as it will further support deployment of VoNR technology. VoNR is a technology standard for running voice traffic as data over a 5G network similar to what voice over LTE (VoLTE) was for 4G LTE data networks. Once deployed, operators can start to transition VoLTE traffic to their 5G networks, which will then allow them to angle network resources away from their 4G LTE networks and toward their 5G networks.

Greg Collins, founder and principal analyst at Exact Ventures, noted in a blog post on LinkedIn that the deal helps Nokia cement its current dominance in North America for supplying IMS and VoLTE gear, and a boost for Nokia’s cloud operations. Nokia moved support and developmentt of its telecom-focused container and cloud infrastructure operations to Red Hat in mid-2023.

“Not only is voice a vital, foundational service for mobile operators, it is an increasingly important interface for GenAI [generative artificial intelligence] services and agents,” Collins wrote.

Nokia’s AT&T network ride The extension continues what has been a roller coaster ride for Nokia equipment within AT&T’s network.

AT&T late last year signed a five-year deal with Nokia to provide the carrier with fiber “solutions” to support the carrier’s network footprint expansion and upgrades. This includes the use of Nokia’s Lightspan MF programmability hardware and Altiplano Access Controller platforms that can support passive optical network (PON) technologies at speeds up to 100 Gb/s (100G).

That deal came less than two months after Nokia moved to acquire smaller optical networking rival Infinera for $2.3 billion. That deal is set to increase Nokia’s scale of its optical network business by 75%, which the equipment vendor said would enable “it to accelerate its product roadmap timeline and breadth.”

Jimmy Yu, VP at Dell’Oro Group, noted at that time that the Infinera acquisition solidifies Nokia as one of the optical networking market’s big three alongside Huawei and Ciena. He explained that those two plus the enhanced Nokia will control around 70% of the worldwide optical networking space, excluding China where Huawei holds a dominant position.

“This is a pretty significant acquisition in that sense,” Yu said.

However, Nokia continues to have a dwindling presence within other parts of AT&T’s broader network deployment. The vendor was notably absent from AT&T’s recent expansion of its open radio access network (RAN) initiative and the carrier stopped buying RAN gear from Nokia several years ago.

Nokia’s management noted that its overall mobile network sales dropped 17% during the third quarter of 2024 compared to the previous year due to slowing sales in North America and India, but that those numbers started to moderate during the final three months of last year.Analysts have noted that the vendor is continuing to slip further behind larger rivals Ericsson and Huawei in the RAN space.

The exclusion came despite Nokia being anointed by ABI Research as one of the industry’s leading open RAN vendors based on innovation and implementation metrics.

Nokia’s management has also remained confident on its telecom equipment future, highlighting various RAN deals in Europe and more opportunities as more Western countries look to drive China-made equipment from their telecommunications infrastructure.

Nokia CEO Pekka Lundmark acknowledged this struggle during the Q3 call but also pointed to Nokia’s opportunities outside of that space, especially in the data center market.

“Even though the telco TAM [total addressable market] is expected to recover somewhat next year, we have to be realistic,” Lundmark said during the Q3 call. “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.”