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Telefonica (TEF) Joins Tech Leaders to Boost Industry Digitization

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In a dedicated effort to scale the usage of big data and artificial intelligence (AI) solutions in industrial environments, Telefonica, S.A. (TEF - Free Report) recently joined a group of eminent tech companies to establish Spain’s first data economy and artificial intelligence consortium — IndesIA. Other participating companies include Repsol, Navantia, Gestamp, Tecnicas Reunidas and Microsoft Corporation (MSFT - Free Report) .

Notably, Spain’s industrial sector is crippled by several headwinds, one of them being lack of valuable infrastructure to support and enhance the productivity of industrial processes on the back of automation and optimization capabilities. Given the fact that Telefonica has been honing its AI techniques for several years, the alliance is likely to boost its competitiveness and trigger significant growth at the national level, thereby accelerating industrial digitization.

With a European outlook, IndesIA aims to identify new industrial use cases and enable the advancement of data analytics solutions for driving the adoption of AI technology among various organizations. In fact, the catalyst project has identified more than 60 use cases with support from a thriving ecosystem of universities, technological centers and startup companies. These entities possess in-depth knowledge of AI solutions and its applicability on industrial applications.

Markedly, the use cases are likely to digitize the value chain of five key industrial verticals — telecommunications, automotive, engineering, naval and energy. It is worth mentioning that Telefonica’s AI solutions are relied upon by a plethora of startups and established companies as it helps such entities to take more objective, data-driven decisions and streamline their business operations through the use of complex algorithms.

In sync with this, the initiative will create a large-scale interoperable industrial data platform that will foster data ingestion and ensure data capture on a real-time basis by collaborating with leading suppliers of industrial hardware and software. Apart from identifying next-gen industrial use cases, IndesIA intends to make judicious use of economic and technical resources to ink agreements pertaining to avant-garde technologies like IoT, 5G and edge computing. It also plans to generate employment opportunities with high-skilled jobs.

With adequate support from organizations like Basque Artificial Intelligence Center, the project intends to integrate more than 100 small and mid-sized businesses and propel their digitization journey as part of this innovative endeavor. The corporations are working together to promote a sustainable economy with the development of energy-efficient materials and open a Data & Artificial Intelligence School to train industrial sector professionals pertaining to STEM (science, technology, engineering, and mathematics) disciplines. Markedly, other associations, which are part of this strategic venture, are Technical University of Madrid, VicomTech, OdiseIA and the University of Granada, to name a few.

Driven by such diligent operations, Telefonica currently has a Zacks Rank #3 (Hold). Shares of the company have gained 24% compared with the industry’s growth of 9.8% in the year-to-date period.

Zacks Investment ResearchImage Source: Zacks Investment Research

Some better-ranked stocks in the industry are Vivendi SE (VIVHY - Free Report) and BCE Inc. (BCE - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vivendi has a long-term earnings growth expectation of 15.6%.

BCE has a long-term earnings growth expectation of 4.7%.

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