Ericsson (ERIC - Free Report) has joined forces with Telia Norway — a leading Nordic communications service provider — to deploy first 5G commercial network in the greater Oslo region. The partnership comes into effect soon after the operator selected the Sweden-based telecom equipment maker as its sole 5G radio access network (RAN) supplier. The move will enable Ericsson to capitalize on its best-in-class capabilities in wireless core services platform.
Ericsson's 5G NR RAN is an integral component of its 5G platform and includes software support for migration from LTE (a 4G mobile communications standard) to NR (a global 5G standard). It offers an industry-leading performance on the smallest site footprint with the lowest energy consumption as networks grow in scale and complexity. The company’s 5G radio access technologies provide the infrastructure required to meet growing demand for high-bandwidth connections and support the real-time, low-latency and high-reliability communication requirements of mission-critical applications.
Per the deal, Telia Norway will leverage Ericsson’s 5G NR hardware and software to deploy its avant-garde 5G network in Lillestrøm and parts of Groruddalen. Designed to offer seamless connectivity services, the partnership will enable both the companies to enhance their existing consumer business and address value chains in the digitization of industries. Apart from being energy and cost efficient, the technology will be used in various sectors such as healthcare, transport and public safety with greater flexibility as well as reliability. Currently available in Oslo, the 5G coverage will be expanded to other Norwegian cities such as Bergen and Trodheim.
Ericsson and Telia Norway intend to optimize new 5G use cases with better network speed to provide a premium experience to consumers and enterprises as well as accelerate applications for various industries across Norway. The Nordic company has been working with Ericsson to revamp its entire radio network infrastructure since last year. The initiative involves the deployment of Ericsson’s Spectrum Sharing software, which enables Telia Norway to share its spectrum between 4G and 5G network. Telia expects to complete majority 5G rollout in 2021, with a nationwide coverage by the end of 2023.
With 34 live 5G networks globally, Ericsson continues to see momentum in its business courtesy of its strategy to increase investments for technology leadership. Its mobility report predicts 1.9 billion mobile 5G subscriptions globally by the end of 2024, up from 1.5 billion subscriptions predicted in the mobility report of 2018. In Networks, the company’s ongoing activities include investments in R&D to safeguard a leading product portfolio and cost leadership; higher investments in automation and serviceability, while lowering costs; and selectively gain market shares led by technology and cost competitiveness.
The company’s “cost and efficiency program” has been devised to generate higher cost savings. Ericsson is focusing on structural changes that will help generate lasting efficiency gains and boost cost competitiveness. It is also focusing on stabilizing its IT, cloud and project portfolio as well as and re-establishing profitability in managed services by managing existing contracts and investing in automation.
Further, the company is on track with its 2020 and 2022 financial targets while building a stronger company in the long term. It has invested in R&D and supply chain capacity to increase market share. The company continues to focus on a restructuring plan to cut costs and streamline focus areas as well as explore options for the media business.
Ericsson currently carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 25.9%. The stock has lost 6.3% compared with 12.6% decline of the industry in the past year.
Some other top-ranked stocks in the broader industry are InterDigital, Inc. (IDCC - Free Report) , Ooma, Inc. (OOMA - Free Report) and Opera Limited (OPRA - Free Report) . While InterDigital sports a Zacks Rank #1 (Strong Buy), Ooma and Opera carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
InterDigital’s bottom line surpassed the Zacks Consensus Estimate in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 99.5%, on average.
Ooma’s bottom line surpassed the Zacks Consensus Estimate in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 124.1%, on average.
Opera’s bottom line surpassed the Zacks Consensus Estimate twice in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 192.9%, on average.
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