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Ericsson (ERIC) Partners New Zealand-Based Firm to Deploy 5G

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·4 min read
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In a concerted effort to establish a streamlined network infrastructure amid rapid 5G shift, Ericsson ERIC recently announced its partnership with 2degrees, a New Zealand-based communications service provider. Per the alliance, the Swedish telco equipment vendor will deploy 5G commercial network in Auckland and Wellington. With productivity benefits, the service is expected to roll out later this year.

The collaboration comes into effect soon after the operator selected Ericsson as its sole 5G radio access network (RAN) technology partner. The latest development will enable Ericsson to capitalize on its best-in-class capabilities in wireless core services platform and bolster digital transformation while augmenting its footprint in the island country. However, financial terms of the deal were not disclosed.

Pursuant to the agreement, Ericsson will be responsible for revamping 2degrees’ core network. The initiative, which commenced in 2020-end, involves the deployment of Ericsson NFVI (Network Functions Virtualization Infrastructure), Policy Control and Cloud Packet Core solutions. These platforms push the boundaries of connectivity while enabling service providers to migrate toward faster adoption of automated networks to realize 5G use case scenarios.

The NFVI is a complete solution that facilitates deployment of virtual network functions and minimizes complexity during the NFV transformation. It covers industry-leading software and hardware products that support central and distributed cloud deployments across underlying virtual environments. With a low cost of ownership, the flexible solution will aid 2degrees with high throughput, low latency and better customer experience. Policy Control dynamically models the network behavior and harnesses AI assistance for improved service delivery.

Meanwhile, Ericsson Cloud Packet Core enhances network capacity growth and supports customers to shift from virtual Evolved Packet Core to dual mode core operations for seamless 5G connectivity. It introduces network slices for massive IoT, reinforces critical enterprise deployments and optimizes workflows. This enables the service providers to reduce operating costs by up to 65%. Currently, the tech giant is also working toward modernizing 2degrees’ RAN network with the installation of innovative solutions from the Ericsson Radio System portfolio.

Apparently, Huawei has been a long-standing tech partner of 2degrees. However, owing to its ban from the 5G market on security grounds, the New Zealand telco has resorted to Ericsson for its network upgrade. Notably, the latest collaboration will substitute 2degrees’ 3G and 4G networks with 5G to not only double the existing capacity but also boost economic development with best-in-class technology. Supported by such distinct strategies, Ericsson is likely to foster next-gen networks with greater flexibility, thereby elevating its leadership in the global market as a 5G RAN vendor.

Moving forward, Ericsson intends to invest in strengthening its portfolio and expanding its global footprint. The company is benefiting from accelerated 5G deployments in North-East Asia, North America and Europe. It currently has 136 commercial 5G agreements with communications service providers and includes 83 live 5G networks in 41 countries.

The company is witnessing a healthy momentum in its business, based on its strategy to increase investments in 5G, thus enabling new use cases in IoT and Big Data. Also, investments in research and development have established the industry player as a leader in 5G. Its patent licensing business continues to perform well on the back of a strong intellectual property rights portfolio. Such bullish trends are expected to bode well for the Swedish entity 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 gained 63.4% compared with industry’s growth of 56.4% in the past year.

Some better-ranked stocks in the industry are Ubiquiti Inc. UI, Nokia Corporation NOK and Sierra Wireless, Inc. SWIR. While Ubiquiti sports a Zacks Rank #1 (Strong Buy), Nokia and Sierra Wireless carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ubiquiti delivered a trailing four-quarter earnings surprise of 37.1%, on average.

Nokia delivered a trailing four-quarter earnings surprise of 40.2%, on average.

Sierra Wireless has a long-term earnings growth expectation of 12.5%.

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