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Ericsson (ERIC) Joins Tech Giants to Test Industry-First 5G Feature

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Ericsson (ERIC - Free Report) recently joined forces with long-time technology partners — Telia Company AB (TLSNY - Free Report) and Qualcomm Incorporated (QCOM - Free Report) — to demonstrate the feasibility of an industry-first 5G Standalone (SA) feature. Dubbed RRC Inactive or the inactive state of Radio Resource Control, the latest advancement is designed to take the 5G technology to a new level by providing a considerable boost in 5G benefits for an enhanced mobile experience.

5G SA is a new-age, cloud-native architecture that augments network capacity with streamlined mobility management and direct access to wide 5G bands, thereby eliminating the dependency on 4G networks. The core purpose of the test was to exhibit the reduced amount of signaling needed during state transitions, i.e., from a connected state to inactive state without the device falling back to idle. Since mobility handling, state and revamped connectivity infrastructure are the major pillars of current and future 5G use cases, the RRC Inactive feature is essential in today’s digital era.

This innovation is touted as a major technology milestone to make efficient use of network resources while addressing critical connectivity requirements supported by low latency and battery savings of up to 30%. It adds significant value to Ericsson and Telia’s thriving 5G relationship while offering customers and industries emerging IoT use cases to bolster digital transformation for a better-connected, sustainable future.

Until now, wireless devices, including smartphones, have existed in two main states – idle and connected. The transition between these two states is a heavy-weight process as it involves one of the most frequent high-layer signaling events on 4G LTE networks. In order to make data transmissions quicker and shorter, it is essential to minimize the amount of signaling to lower battery consumption and device latency for a better 5G smartphone life.

Hence, RRC Inactive seems to be the need of the hour with majority of the operators migrating toward smarter solutions for a more responsive end-user experience. The development of the inactive state is primarily fueled by Machine-type Communication, which is an integral component of 3GPP standardization. The RRC Inactive test was conducted over Telia’s commercial 5G network by capitalizing on a mobile test device powered by Qualcomm’s Snapdragon X60 Modem-RF System, coupled with Ericsson’s software and 5G SA network nodes.

This powerful combination has been proved to shorten time lag by up to 3x, thereby empowering customers with next-gen applications like cloud gaming and Virtual Reality gaming experience. 5G use cases such as smart transport and enhanced mobile broadband are also compatible with the latest technology. The landmark test is likely to not only play a pivotal role in the expansion of 5G networks but also foster Ericsson’s capabilities and its relationship with the tech behemoths in the forthcoming years.

Moving forward, Ericsson intends to invest in strengthening its portfolio and expanding global footprint. The company is benefiting from accelerated 5G deployments in North-East Asia, North America and Europe. It currently has 143 commercial 5G agreements with communication service providers and 93 live 5G networks in 45 countries. Its patent licensing business continues to perform well on the back of a strong intellectual property rights portfolio. Such bullish trends are expected to boost the Sweden-based company’s business roadmap in the long run.

Ericsson currently has a Zacks Rank #3 (Hold). Its shares have gained 37.5% compared with industry’s growth of 51.6% in the past year.

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A better-ranked stock in the industry is Motorola Solutions, Inc. (MSI - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Motorola delivered a trailing four-quarter earnings surprise of 11.6%, on average.