Ericsson ( ERIC Quick Quote ERIC - Free Report) recently inked an agreement with Virgin Media O2 to accelerate network modernization in the United Kingdom. The deal of an undisclosed amount is an extension of a long business relationship and aims to provide reliable and faster connectivity to end users. Virgin Media intends to enhance 5G connectivity by utilizing Ericsson’s latest quad-technology baseband, multiband and industry-leading 5G Massive MIMO radio AIR 3258. The technology also mitigates the adverse environmental impact as it will consume 30% less energy than available variants and a 40% reduction in weight and volume to expedite the network deployment. Per the deal, Virgin Media will facilitate the testing of Ericsson's most recent Cloud RAN (Radio Access Network) solution. The system operates in a cloud computing environment, which offers incredibly scalable, adaptable, and reliable applications that enable organizations to act quickly and develop innovative solutions. Apart from substantial advancement of hardware, software and other network infrastructure, the deal includes additional upgrades and small-cell solutions. This will likely improve mobile capacity, coverage and speed for customers in major U.K. cities such as Manchester, Liverpool and Belfast. Ericsson is witnessing solid demand trends for its 4G and 5G RAN technology that accentuate the strength of its Radio System portfolio and acceptance of its latest innovation among customers. The company is benefiting from solid 5G momentum worldwide. Investments in research and development (R&D) have established it as a leader in 5G. In the Mobile Networks business, Ericsson plans to capitalize on the convergence of cloud, software, and services by merging Digital Services and Managed Services to form a new segment dubbed Cloud Software and Services. With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has recently increased. To maintain superior performance as traffic increases, there is also a continuous need for network tuning and optimization. Ericsson is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity. The company is focused on structural changes that will generate lasting efficiency gains and boost cost competitiveness. Courtesy of investing in R&D combined with operational efficiency, Ericsson has the world’s leading patent portfolio in cellular technology, with 60,000 granted patents and more than 100 signed licensing agreements. It is also focused on stabilizing its IT, cloud and project portfolio and re-establishing profitability in Managed Services by handling existing contracts and investing in automation and artificial intelligence. The stock has lost 40.4% in the past year compared with the industry’s decline of 18.9%. Image Source: Zacks Investment Research
Ericsson currently carries a Zacks Rank #3 (Hold).
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