LM Ericsson Telephone Company (ERIC - Analyst Report) recently won a contract from Chile-based telecom company Entel for providing 4G or LTE network to its operators. In addition, the contract will also expand Ericsson’s partnership for Entel’s 2G and 3G networks. The agreement is for a span of 3 years.
The new contract from Entel is the result of increased data traffic growth and increasing demand for mobile broadband coverage in Chile. The new contract also includes multi-standard radio access network, evolved Packet Core with Evolved Packet Gateway on the SSR 8000 family of Smart Services Routers, operation and support system and backhaul transport design.
The contract further strengthens Ericsson’s position as the technology leader in the Latin American market. Ericsson is the world leader in LTE and currently has more than 130 commercial LTE contracts. Network expansions in emerging markets (including Latin America, Eastern Europe, Africa, and Asia) are expected to drive the company’s overall revenue over the coming years.
Following the deployment of all the contracts won by Ericsson in recent times, the company is expected to have more than half of the share of the Latin American LTE market in terms of volume.
Recently, in Feb 2013, Ericsson and Reliance Communications signed a $1 billion managed services contract to operate and manage the Wireline and wireless networks in the Northern and Western States of India. In addition, Ericsson announced that it has signed a frame agreement with Tele2 to expand and upgrade the latter’s mobile backhaul network across Europe. This agreement has been effective since Dec 2012.
Ericsson currently has a Zacks Rank #2 (Buy). Some other players operating in the same industry such as Juniper Networks (JNPR - Analyst Report) , Interdigital Inc. (IDCC - Snapshot Report) and Qualcomm Inc. (QCOM - Analyst Report) carry a Zacks Rank #2 (Buy).