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Ericsson to Boost Next-Tech Wireless' Network Capabilities

Zacks Equity Research

Ericsson ERIC recently inked a deal with wireless carrier Next-Tech Wireless to help it better adapt to the modalities of upgraded network infrastructure to embrace 5G technology. The strategic deal will help Next-Tech Wireless to transform its core network facilities to combat competition as 5G services gradually roll out across the country.

Per the contract, Kansas-based Next-Tech Wireless will deploy Ericsson Fast VoLTE Launch solution, a full-stack industrialized and validated virtual IP multimedia subsystem to enable HD quality VoLTE, Wi-Fi calling and future-enriched communication services. This will help the wireless carrier to be more agile as it aims to launch commercial 5G services using both fixed and mobile access. In addition to improving operational efficiency, the transformation will augment the network capabilities for seamless IoT applications and other potential future services. Ericsson will also provide 3GPP standards-based 5G New Radio hardware and software capabilities along with virtual upgrades of the Cloud Core network.

With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has increased in recent times. Further, to maintain superior performance as traffic increases, there is also a continuous need for network tuning and optimization. Ericsson, being one of the premier telecom services providers, is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity. Notably, Ericsson is the world’s largest supplier of LTE technology with a significant market share and has established a large number of LTE networks worldwide.

The stock has declined 5.1% in the past year compared with the industry’s 1% fall.



Ericsson is focusing on 5G system development and has undertaken many notable endeavors to position itself for market leadership in 5G. The company believes that standardization of 5G is the cornerstone for digitization of industries and broadband. Moreover, Ericsson foresees mainstream 4G offerings to give way to 5G technology in the future. Meanwhile, the impending deployment of 5G networks in 2020 is expected to boost the adoption of IoT devices with technologies like network slicing gaining more prominence. Such positive industry trends are expected to boost the company’s long-term growth. Ericsson plans to accelerate its 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.

Ericsson currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Nokia Corporation NOK, Sonim Technologies, Inc. SONM and Viasat Inc. VSAT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
    
Nokia beat earnings estimates thrice in the trailing four quarters, the average positive surprise being 89.3%.  

Sonim has a long-term earnings growth expectation of 25%.  

Viasat beat earnings estimates in each of the trailing four quarters, the average positive surprise being 230.6%.

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