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Ericsson to Supply Small Cells for Telstra's 4G LTE Network
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Telefonaktiebolaget LM Ericsson (publ) (ERIC - Free Report) and telecommunications company, Telstra, are slated to extend their ties, with the former gearing up to deploy indoor and outdoor small cells on the latter’s 4G LTE network.
Telstra has already completed the deployment of small cells in 50 rural towns across Australia, in a bid to improve the broadband experience of the residents. Small cells in 4G LTE network are known to improve quality and reliability of mobile broadband service, thus boosting customer satisfaction. These cells can enable operators to provide cost-effective services and expand LTE coverage.
Once the deployment of cells is complete, it will be able to support both individual and enterprise customers in shopping centers and large indoor venues. Leveraging on these small cells, Telstra can now offer seamless Voice over LTE, Voice over WiFi and video calls. Further, the latest agreement will help Telstra in preparing for the upcoming 5G network deployments.
Meanwhile, Ericsson’s Mobility Report shows that from 2016 to 2022, data traffic per smartphone will skyrocket from 1.6 Gigabytes to 11 Gigabytes per month. Such a surge will necessitate operators to boost their network data performance, both indoor and outdoor. Integrating small cells with macro networks will be a major step to accomplish this goal. Given that small cell deployment is an integral part of Ericsson's heterogeneous network strategy, the company is poised to benefit from this trend, moving ahead.
Though Ericsson is confident of its prospects, based on the impending 5G commercialization, its near-term headwinds are likely to vex investors. The company has been grappling with a host of factors, including soft mobile broadband demand, slowdown in emerging markets and weaker-than-expected benefits from cost-cutting initiatives.
Plagued by these factors, shares of the company have recorded an average negative return of 26.6% in the past six months, comparing unfavorably with that of the Zacks categorized Wireless Equipment industry average of 9.9%. With three back to back earnings misses, over the trailing four quarters, Ericsson has an unimpressive average negative earnings surprise of 23.0%.
Further, with the Zacks Rank #4 (Sell) company’s earnings estimates moving south, over the past couple of months, there is no immediate respite in sight. The Zacks Consensus Estimate for 2016 earnings descended from 50 cents to 33 cents, over the past two months, attributable to five downward estimate revisions compared with none upward.
Networking products and solutions provider, Ubiquiti Networks has an excellent earnings surprise history, beating estimates each time, over the trailing four quarters. It has a positive average surprise of 19.7%.
Motorola Solutions is engaged in providing communication equipments, software and services. The company has a striking earnings surprise history, for the trailing four quarters, having beaten estimates all through, for an impressive average beat of 15.7%.
Harris Corporation is an international company, focused on communications equipment for voice, data and video applications. The company has an impressive earnings surprise history for the trailing four quarters, beating estimates all through, for an average of 4.2%.
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Ericsson to Supply Small Cells for Telstra's 4G LTE Network
Telefonaktiebolaget LM Ericsson (publ) (ERIC - Free Report) and telecommunications company, Telstra, are slated to extend their ties, with the former gearing up to deploy indoor and outdoor small cells on the latter’s 4G LTE network.
Telstra has already completed the deployment of small cells in 50 rural towns across Australia, in a bid to improve the broadband experience of the residents. Small cells in 4G LTE network are known to improve quality and reliability of mobile broadband service, thus boosting customer satisfaction. These cells can enable operators to provide cost-effective services and expand LTE coverage.
Once the deployment of cells is complete, it will be able to support both individual and enterprise customers in shopping centers and large indoor venues. Leveraging on these small cells, Telstra can now offer seamless Voice over LTE, Voice over WiFi and video calls. Further, the latest agreement will help Telstra in preparing for the upcoming 5G network deployments.
Meanwhile, Ericsson’s Mobility Report shows that from 2016 to 2022, data traffic per smartphone will skyrocket from 1.6 Gigabytes to 11 Gigabytes per month. Such a surge will necessitate operators to boost their network data performance, both indoor and outdoor. Integrating small cells with macro networks will be a major step to accomplish this goal. Given that small cell deployment is an integral part of Ericsson's heterogeneous network strategy, the company is poised to benefit from this trend, moving ahead.
Though Ericsson is confident of its prospects, based on the impending 5G commercialization, its near-term headwinds are likely to vex investors. The company has been grappling with a host of factors, including soft mobile broadband demand, slowdown in emerging markets and weaker-than-expected benefits from cost-cutting initiatives.
Plagued by these factors, shares of the company have recorded an average negative return of 26.6% in the past six months, comparing unfavorably with that of the Zacks categorized Wireless Equipment industry average of 9.9%. With three back to back earnings misses, over the trailing four quarters, Ericsson has an unimpressive average negative earnings surprise of 23.0%.
Further, with the Zacks Rank #4 (Sell) company’s earnings estimates moving south, over the past couple of months, there is no immediate respite in sight. The Zacks Consensus Estimate for 2016 earnings descended from 50 cents to 33 cents, over the past two months, attributable to five downward estimate revisions compared with none upward.
Stocks to Consider
Some better-ranked stocks in the same space include Ubiquiti Networks, Inc. Motorola Solutions, Inc. (MSI - Free Report) and Harris Corporation , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Networking products and solutions provider, Ubiquiti Networks has an excellent earnings surprise history, beating estimates each time, over the trailing four quarters. It has a positive average surprise of 19.7%.
Motorola Solutions is engaged in providing communication equipments, software and services. The company has a striking earnings surprise history, for the trailing four quarters, having beaten estimates all through, for an impressive average beat of 15.7%.
Harris Corporation is an international company, focused on communications equipment for voice, data and video applications. The company has an impressive earnings surprise history for the trailing four quarters, beating estimates all through, for an average of 4.2%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>