Ericsson ERIC recently made public the November 2019 edition of its Mobility Report. The Swedish telecom equipment maker forecasts global 5G subscriptions to surpass 2.6 billion within the next six years, on the back of continued momentum and a rapidly evolving ecosystem.
The report says that 5G will cover up to 65% of the world’s population by the end of 2025 and handle 45% of global mobile data traffic. Average monthly data-traffic-per-smartphone is anticipated to rise from the current figure of 7.2 GB to 24 GB by the end of 2025, partly driven by new consumer behavior like virtual reality streaming. Ericsson currently has more than 75 commercial 5G agreements with communication service providers, of which 23 are live networks.
A total of 13 million 5G subscriptions are estimated by the end of 2019. This is the year in which leading service providers in Asia, Australia, Europe, Middle East, and North America have switched on their 5G networks. Network deployments are expected to ramp up during 2020, building the foundation for massive adoption of 5G subscriptions.
The growth in 5G subscription is estimated to be significantly faster than that of LTE. The fastest uptake is likely to be in North America with 74% of mobile subscriptions projected to be 5G by the end of 2025. North East Asia is expected to follow at 56%, with Europe at 55%.
In Networks business (which accounts for the lion’s share of total sales), Ericsson’s ongoing activities include investing 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.
On Oct 2, 2019, the company completed the acquisition of Kathrein’s antenna and filter business in order to expand its Radio System portfolio with new products and capabilities. Ericsson continues to execute its strategy and is well on track to achieve its 2020 financial goals. It has been working with operators to help in their network modernization, while optimizing on plenty of opportunities.
Shares of Ericsson have added 11.6% compared with the industry’s growth of 6.9% in the past three months. The Zacks Consensus Estimate for its current-year earnings has been revised 25.7% upward over the past 60 days.
Ericsson currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the industry include Qualcomm Incorporated QCOM, Ubiquiti Inc. UI and PCTEL, Inc. PCTI. While Qualcomm and Ubiquiti sport a Zacks Rank #1 (Strong Buy), PCTEL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Qualcomm has long-term earnings growth expectation of 14%.
Ubiquiti has long-term earnings growth expectation of 9.4%.
PCTEL topped earnings estimates in each of the trailing four quarters, the average surprise being 150.6%.
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