T-Mobile US (TMUS  ) has crowned Nokia (NOK  ) as its official supplier of $3.5 billion in next-generation 5G network gear, the firms said on Monday, marking the world's largest 5G deal so far and solid evidence of a new wireless upgrade cycle that will anchor itself in the telecommunications industry.

The deal is one of Nokia's largest contracts to date and a sign that network equipment vendors are starting to gain business from the new cellular technology. Nokia will help build a nationwide 5G grid for the No. 3 wireless carrier, which has said its customers in New York, Los Angeles, Dallas, and Las Vegas will be first to run the technology early next year.

The T-Mobile award is critical to Finland's Nokia, whose results have been battered by years of slowing demand for existing 4G networks and mounting investor doubts over whether 5G contracts can begin to boost profitability later this year. The T-Mobile win helps it to compete with rival Ericsson in the 5G telecom equipment market. Specifically, T-Mobile will use Nokia's AirScale radio platform and cloud, AirFrame hardware, CloudBand software and SON and 5G Acceleration Services.

"It's our largest 5G deal to date, and in fact, one of the largest deals Nokia's ever signed," Phil Twist, vice president for marketing at Nokia's Mobile Networks unit, said by phone. "This underlines and makes concrete that 5G is coming to the market."

Nokia shares rose as much as 2.5% after the announcement and were trading 1.1% higher at 4.75 euros as of 4:37 p.m. in Helsinki. In a separate statement, Nokia said that its outlook included the impact of the T-Mobile agreement.

Terms of the deal include the fact that Nokia needs to supply a range of 5G hardware, software and services that will allow T-Mobile to capitalize on licensed airwave to deliver, broad coverage on 600 megahertz spectrum and ultra high-speed capacity on 28 megahertz airwaves in densely trafficked urban areas, the companies said.

The US and China have been at the forefront of next-generation mobile technology. All major American operators have announced plans to deploy 5G, which boasts download speeds and capacity that will enable everything from autonomous vehicles to remote surgery and traffic control. Nokia and its Swedish rival Ericsson AB are in prime positions to benefit from investments in the new infrastructure as their main competitor, China's Huawei Technologies Co., is blocked from supplying equipment to US carriers.