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Ericsson Sets Up India's First 5G CoE and Innovation Lab

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Ericsson (ERIC - Free Report) recently announced that it has established a Centre of Excellence (CoE) and Innovation Lab for 5G at the Indian Institute of Technology (“IIT”) Delhi, India with an aim to stimulate the 5G ecosystem across the country.

The Swedish telecommunications company and IIT Delhi had inked a memorandum of understanding to jointly roll out a ‘5G for India’ program. The first of its kind, Ericsson’s new incubation hub has been set up to accelerate 5G deployments in India by bringing together telecom ecosystems, academia, industry and start-ups.

Ericsson is leading standardization of 5G on a global stage and believes it to be the keystone for the digitization of industries. The 5G CoE supports the government's plans to foster a robust and vibrant 5G ecosystem in India. As such, the IITians in collaboration with the industry are working to develop the latest technologies that will enable connectivity for millions and make 5G a reality in India. In addition to hosting the CoE, IIT Delhi will conduct research and development to explore how some of the country’s challenges can be addressed with mobile technologies as their partnership contribute to India’s digital vision.

The company conducted India's first 5G over the air beam tracking demonstration on 3.5GHz spectrum using a pre-commercial end-to-end system. It anticipates that there will be 1 billion 5G subscriptions for enhanced mobile broadband by 2023. 5G will cover more than 20% of the world’s population by the end of 2023. The first commercial networks based on 5G New Radio are expected to go live in 2019 with major deployments from 2020.

Per the company, 5G enabled digitization revenue potential in India will be $27.3 billion by 2026. The operators in India can generate additional revenues of $13 billion or half if they take up roles beyond being connectivity and infrastructure providers to become service enablers and service creators. 5G will accelerate the digital transformation in many industries enabling new use cases in areas such as IoT, automation, transport and big data.

Positive industry trends are expected to boost Ericsson’s long-term growth. The company plans to accelerate planned cost cuts and efficiency measures and focus on its core business of selling networking equipment prior to the expected roll-out of 5G networks.

Over the past three months, shares of Ericsson have rallied 22.3%, outperforming the industry’s growth of 5%.        



Ericsson currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Motorola Solutions, Inc. (MSI - Free Report) and Ubiquiti Networks, Inc. (UBNT - Free Report) . While Comtech sports a Zacks Rank #1 (Strong Buy), Motorola and Ubiquiti carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.   

Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.         

Motorola has a long-term earnings growth expectation of 8%. It beat earnings estimates in each of the trailing four quarters, the average being 12.1%.   

Ubiquiti has a long-term earnings growth expectation of 18.6%. It surpassed earnings estimates thrice in the trailing four quarters with an average positive surprise of 8.9%.    

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