HELSINKI (Reuters) – U.S. telecoms operator AT&T and Finnish network equipment maker Nokia have signed an agreement to build a fibre network in the U.S., the Finnish company said on Tuesday.

The deal comes after Nokia lost a major deal with AT&T to its Swedish rival Ericsson, which the U.S. operator chose in December to build a telecoms network that will cover 70% of its wireless traffic in the United States by late 2026.

Nokia is eyeing new growth in fibre after AT&T’s $14 billion five-year deal with Ericsson.

Nokia did not disclose the financial value of the new five-year fibre deal but called it “a significant milestone” and said it would “boost broadband access for millions of users” in the U.S., while supporting AT&T’s extensive fibre network footprint “that passed 27.8 million total fibre locations as of the second quarter of 2024”.

In July, Nokia reported a 32% drop in profit but CEO Pekka Lundmark forecast that net sales would significantly accelerate in the second half of the year, pointing to an improving fibre market in the U.S. and a $42 billion U.S. government programme to boost citizens’ access to high-speed broadband.

Nokia said the fibre deal with AT&T is “Build America, Buy America-compliant”, to meet the requirements of U.S. government funding.

In June, Nokia announced the acquisition of U.S. optical networking gear maker Infinera, in a $2.3 billion deal in a bid to gain from the billions of dollars in investment pouring into data centres to cater to the rise of artificial intelligence.

(Reporting by Anne Kauranen in Helsinki; editing by David Evans)