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Ericsson (ERIC) Boosts 5G Ecosystem in Taiwan With APT Alliance

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Zacks Equity Research
·4 min read
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Ericsson ERIC recently announced that it has teamed up with a leading communications service provider — Asia-Pacific Telecom Co Ltd (“APT”) — for the deployment of 5G Non-Standalone licenses to support Multi-Operator Core Networks (MOCN) in Taiwan. As part of the agreement, the Swedish telco equipment vendor will also be responsible for streamlining APT’s network on the back of its best-in-class 5G Radio Access Network (RAN) technology.

As a 5G RAN vendor, the latest move will help Ericsson to bolster APT’s digital transformation while strengthening its footprint in the East Asian country. Amid rapid technology shifts, the collaboration comes as a boon, especially at a time when majority of the service providers are shifting toward automated operations for addressing business critical needs. It will primarily focus on tapping lucrative opportunities and driving the overall 5G development in Taiwan with utmost agility and flexibility.

With an industry experience of more than 20 years, Asia-Pacific Telecom Co Ltd is a well-known telco that is mainly involved in the establishment of integrated telecommunications services. The company provides a plethora of avant-garde network services such as broadband mobile communication, broadband fixed line and broadband Internet services to personal and business customers based in the East Asian country. It is worth mentioning that the partnership also involves integration with the third largest telco in Taiwan — Far EasTone Telecommunications (“FET”) — on the 3.5GHz frequency band.

Interestingly, both APT and FET joined forces, last year, to support nation’s first MOCN with the deployment of 5G services on 3.5GHz frequency band. The MOCN readiness, apparently, enables multiple core networks to operate under the same bandwidth and RAN, which makes it all the more worthwhile among network operators. In March 2020, FET tapped the Swedish tech giant to install the latter’s 5G RAN across its spectrum assets in the low, mid and high bands on the back of Ericsson Radio System portfolio.

Per the recent collaboration, APT will capitalize on Ericsson’s 5G-ready Radio System portfolio to serve its purpose. Notably, Ericsson Radio System comprises hardware, software and services for radio, RAN Compute, antenna system, transport, power and site solutions. It enables smooth and cost-effective migration from 4G to 5G, supporting communication service providers to launch the avant-garde technology and grow 5G coverage fast. The existing Ericsson basebands and several mobile sites will be modernized to enhance customer experience, driven by the 5G RAN technology as part of the deployment initiative.

Ericsson’s 5G radio access technologies provide the ultimate infrastructure required to meet the growing demand for high-bandwidth connections and support real-time, high-reliability communication requirements of mission-critical applications. Apart from the Radio System portfolio, the deal includes Ericsson Network Manager, OSS migration services and upgrade. In fact, Ericsson had previously partnered with Chunghwa Telecom Co., Ltd. CHT to deploy commercial 5G network in Taiwan with its 5G Core network and 5G RAN for seamless connectivity.

To date, Ericsson has secured 124 commercial 5G agreements with unique communication service providers, of which 74 are publicly announced. Notably, the company is witnessing a healthy momentum in its business, based on the strategy to increase investments in 5G, while enabling new use cases in IoT and Big Data. Also, investments in research and development have established it as a leader in 5G network technology. Acquisition of Cradlepoint has reinforced its ability to grow in the 5G enterprise market. Such optimistic industry trends are expected to bode well for Ericsson in the long run.

Ericsson currently has a Zacks Rank #4 (Sell). It has a long-term earnings growth expectation of 28.9%. The stock has rallied 30.5% compared with industry’s growth of 35.2% in the past year.



Some better-ranked stocks in the industry are Comtech Telecommunications Corp. CMTL and Qualcomm Incorporated QCOM. While Comtech sports a Zacks Rank #1 (Strong Buy), Qualcomm carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech delivered a trailing four-quarter positive earnings surprise of 2%, on average.

Qualcomm delivered a trailing four-quarter positive earnings surprise of 17.3%, on average.

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