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Ericsson Augments Network Managed Services With MTN Group

Zacks Equity Research

Ericsson ERIC recently announced that it has inked an agreement with Africa’s biggest telecommunications company — MTN Group — to deploy managed services in Benin by leveraging its AI and data-driven operations. Reinforcing the long-term partnership, the strategic deal underscores the Swedish equipment maker’s efforts to capitalize its best-in-class capabilities in automation platforms, thereby benefiting MTN Group with seamless network infrastructure and enhanced customer experience.

Pursuant to the terms of the agreement, Ericsson’s advanced portfolio of 5G technology and automation use cases will enhance MTN Group’s core business operations to deploy improved network capacity and performance in the West African country. Markedly, the extended collaboration, which marks a significant step in the digitalization of MTN Benin’s networks, focuses to leverage Ericsson’s intelligent analytics to accelerate operational transformation with proactive IT and network management.

Ericsson’s top-notch automation and maintenance capabilities have proved to be a popular standard in the last few years. It is primarily known for increasing network efficiency and minimizing capital and operational expenditures for an enhanced network infrastructure. Keeping in mind the current scenario of radical technological disruptions, the extended partnership aims to shift its focus from network-centric operations to user experience-centric operations, which make it more likely for MTN Group to deliver an innovative network experience for subscribers.

With the emergence of smartphone market and subsequent usage of mobile broadband, Ericsson, being one of the premier telecom service providers, is much in demand among the operators to expand network coverage for higher speed and capacity. Markedly, the company is one of the world’s largest suppliers of LTE technology with a huge market share.

Currently, the Swedish telco is witnessing healthy momentum in its business, based on the strategy to increase investments for technology leadership. In Networks, the company’s ongoing activities aim 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 shares based on technology and cost competitiveness. Markedly, its much-acclaimed Radio System extensions deliver an end-to-end 5G access system, which includes the industry’s first global portfolio of 5G New Radio.

The company’s “cost and efficiency program” has been devised to generate higher cost savings. It is focusing on structural changes that will help generate lasting efficiency gains. It plans to increase investment in core areas to develop a product portfolio. Furthermore, Ericsson is focusing on stabilizing its IT, cloud and project portfolio, and re-establishing profitability in managed services by managing contracts as well as investing in automation.

Notably, Ericsson is on track with its 2020 and 2022 financial targets while making progress toward building a stronger company in the long term. In addition, it aims to achieve its 2020 financial goals with a comprehensive 5G-ready portfolio to enable seamless migration to 5G technology. AI and automation are key enablers for future business development, creating customer and shareholder value.

Ericsson has a long-term earnings growth expectation of 17.7%. The stock has lost 16.2% compared with 26.2% decline recorded by the industry in the past three months.



Zacks Rank & Stocks to Consider

Ericsson currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader industry are Telenav, Inc. TNAV, Motorola Solutions, Inc. MSI and Qualcomm Incorporated QCOM. While Telenav sports a Zacks Rank #1 (Strong Buy), Motorola and Qualcomm carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Telenav outpaced estimates twice in the trailing four quarters, the positive earnings surprise being 77.1%, on average.

Motorola outpaced estimates in the trailing four quarters, the positive earnings surprise being 6.6%, on average.

Qualcomm surpassed estimates in the trailing four quarters, the positive earnings surprise being 10%, on average.

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