Tariff Uncertainty Could Stall RAN Upgrades—but May Speed Up Disaggregation Strategies

In early April 2025, President Trump’s administration implemented a sweeping new round of tariffs. This consisted of 10% baseline tariffs, followed by country-specific rates from April 9. For now, these reciprocal tariffs have been paused for 90 days for all countries except China, which now will see a 145% levy, having responded with its own tariffs against U.S. imports. While the headlines have been dominated by the impact these tariffs will have on the automotive and manufacturing industries, there will also be a significant impact on the telecommunications sector. Some of the relevant countries and regions that will be hit include Vietnam (46%), the European Union (EU) (20%), Japan (24%), and South Korea (25%).

The impact of these tariffs is likely to be much more significant for smaller vendors such as Airspan and Mavenir than incumbent vendors such as Nokia and Ericsson. Adding to their cost of business creates even more strain than they were already experiencing, with Airspan having just emerged out of bankruptcy protection and Mavenir facing rumors of financial uncertainty and looking for a significant investment. While Nokia and Ericsson have a manufacturing presence in the United States, importing necessary components is unavoidable. However, due to their stronger financial positions, they will have prepared in advance for the implementation of these tariffs and have significant stock of the portfolio for the U.S. market.

Smaller players will not have been able to make such adjustments on a significant scale as they typically manufacture their solutions once an order has been placed and payment has been received to help with their cash flow positions. This will mean that when competing for future contracts in the United States, it becomes even harder for smaller players to compete from a price perspective, and the cost of developing new solutions will increase. In the table below, ABI Research breaks down how these tariffs may impact some of the different RAN components.

Furthermore, Fujitsu is likely to be more affected by these tariffs than other incumbent players. The vendor supplies radios to Boost Mobile and AT&T and will immediately see a 24% increase to product costs once they kick in again. Especially as the 5G radios being supplied to these customers are Open RAN-compliant, there is a risk that to avoid these costs, their customers may decide to select another vendor that is already part of the respective Open RAN deployments. However, this will still necessitate an integration process with the automation layer, especially in AT&T’s network where Ericsson integrates the third-party radios onto the Ericsson Intelligent Automation Platform (EIAP), so an immediate vendor swap is unlikely.

From a network deployment perspective, operators are unlikely to change their Capital Expenditure (CAPEX) plans, but rather slow down infrastructure upgrades/deployments. Nokia and Ericsson are more likely to increase the price of their solutions, rather than absorb the increase in component cost due to the competitive pricing they already offer their customers, keeping their margins in this market low, so operators will now have slightly less purchasing power for the duration of these tariffs. Any announcements set to be made in 2Q 2025 by the leading U.S. operators will be pushed back as they wait to see if they are able to wait out these tariffs.

From a strategy perspective, operators may reassess their network virtualization/cloudification strategies and look to see if they are able to accelerate their roadmap for these technologies in the midst of geopolitical uncertainties. Making their RAN more software-defined would impact operators less, especially if running the network over Commercial Off-the-Shelf (COTS) servers. Notably, NVIDIA’s DGX and HGX systems are exempt from U.S.-Mexico tariffs, sorted under the United States’ HTS codes 8471.50 and 8471.80, thanks to the United States–Mexico–Canada Agreement (USMCA) trade agreement. U.S. import data for these server-related categories show that 60% of the US$73 billion in imports in 2024 came through Mexico. This could entice U.S. operators to take a closer look at the feasibility of deploying an Artificial Intelligence (AI)-RAN architecture, especially as it offers the potential of monetizing their edge assets via Graphics Processing Unit-as-a-Service (GPUaaS) for third-party AI workloads. Should this occur, Fujitsu will again be a strong candidate for selection, having already integrated its technology with NVIDIA’s Aerial RAN for SoftBank.

The increased uncertainty surrounding the size and length of these tariffs necessitates adjustments from operators and vendors, but also presents these vendors with a unique opportunity to capitalize on this uncertainty and grow their presence. There are several measures that U.S. operators and RAN vendors can take:

• Operators can accelerate the roadmap for RAN virtualization or cloudification. The necessity for many proprietary components for their radio network leaves operators vulnerable to continued geopolitical instability in the future. Working closely with their existing RAN suppliers to help accelerate their roadmap by conducting more trials and setting out a strategy to prioritize their infrastructure upgrades toward virtualizing their network, specifically with COTS servers, will help operators avoid these same tariffs in the future and limit the effects of cost instability.
• RAN suppliers must review their Bill of Materials (BoM) and sourcing strategies for their RAN solutions. Identifying areas of exposure to tariffs, both current and in the future, can allow vendors to diversify their supply chain where possible and keep the costs of components for the U.S. market as low as possible, ensuring they are capable of offering competitive pricing. Furthermore, RAN vendors must assess the possibility of moving more of their production to the United States, Mexico, and/or Canada. Nokia and Ericsson already have manufacturing capacity in the United States; however, it is unclear whether these are more for assembling pre-manufactured components imported from their other facilities.
• RAN vendors must also work quickly to integrate their RAN software into more platforms that allow for network virtualization, such as NVIDIA’s Aerial RAN or Intel Xeon 6. Integrating their solutions into these platforms will allow vendors to assist operators in their network virtualization strategies and compete for future contracts, especially as the increased uncertainty is likely to make vendor diversification become less of a priority for operators as they take a more conservative approach. Being among the first to be able to offer this to operators will help them capture new opportunities first.  

Gain Clarity In Uncertain Times 

Explore more ABI Research Analyst Insights on how the U.S. tariffs will potentially impact technology markets and the next steps for stakeholders by downloading the free whitepaper, Navigating Tariff Turbulence in the Technology Sector.