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Ericsson Furthers Collaboration With O2 UK for 5G Networks

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Ericsson (ERIC - Free Report) today communicated that it has been chosen by O2 UK to deploy its 5G radio access network even farther across the United Kingdom. As part of a major network modernization program, Ericsson will upgrade the existing 2G/3G/4G sites of the communications service provider.

Since the introduction of O2’s 5G commercial network in October last year, the collaboration has expanded to include Ericsson’s hardware, software and service upgrades in the west of the U.K. The Sweden-based telecom gear maker will continue to help O2 with the rollout of commercial 5G in multiple cities, towns and locations in England, Scotland, Wales and Northern Ireland.

Products and solutions from the Ericsson Radio System portfolio will be used in the deployment, which includes new multi-band and wide-band 5G radios as well as 5G-optimized basebands. Also, the companies are developing an innovation cluster as part of a trial platform to evaluate future mobile architecture, technology and systems.

Ericsson Radio System comprises hardware, software and services for radio, RAN Compute, antenna system, transport, power as well as site solutions. It enables smooth and cost-effective migration from 4G to 5G, supporting communications service providers to launch the avant-garde technology and grow 5G coverage fast. The company’s 5G radio access technologies provide the infrastructure required to meet the growing demand for high-bandwidth connections and support the real-time, high-reliability communication requirements of mission-critical applications.

Ericsson is witnessing a healthy momentum in its business, based on the strategy to increase its investments for technology leadership, including 5G. In Networks, the company’s ongoing activities are to invest in R&D to safeguard a leading product portfolio and cost leadership; increase investments in automation and serviceability driving down costs; and selectively gain market share based on technology and cost competitiveness.

Ericsson has been making progress toward building a stronger company in the long term, while investing in supply chain capacity. It currently has 93 commercial 5G agreements (of which 51 are publicly announced) and includes 40 live 5G networks. Its “cost and efficiency program” has been devised to generate higher cost savings. The company is focusing on structural changes that will generate lasting efficiency gains and boost cost competitiveness.

The company’s portfolio spans Networks, Digital Services, Managed Services and Emerging Business. Courtesy of investing in R&D combined with operational efficiency, Ericsson has the world’s leading patent portfolio in cellular technology, with more than 54,000 granted patents and above 100 signed licensing agreements. Considering the current visibility, the company maintains the financial targets for 2020 and 2022.

Shares of Ericsson have rallied 31.2% compared with 19.6% growth of the industry in the past three months. The company has a long-term earnings growth expectation of 25.9% compared with 14.6% of the industry.

Ericsson currently carries a Zacks Rank #2 (Buy) and a VGM Score of A.

Some other top-ranked stocks in the broader industry are Ooma, Inc. (OOMA - Free Report) , Acacia Communications, Inc. (ACIA - Free Report) and Chegg, Inc. (CHGG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ooma has a trailing four-quarter positive earnings surprise of 228.2%, on average.

Acacia has a trailing four-quarter positive earnings surprise of 17.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

Chegg has a trailing four-quarter positive earnings surprise of 49.9%, on average.

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