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Ericsson to Modernize Telia Norway's Network for 5G Services

Zacks Equity Research

Ericsson ERIC recently announced that it has been chosen by Telia Norway — a Nordic communications service provider — as its sole 5G radio access network provider for nationwide network. Financial terms of the deal remained undisclosed. Markedly, Ericsson is currently live with commercial 5G in 19 customer networks across 15 countries, spanning four continents.

Per the agreement, the Swedish telecom equipment maker will deploy its hardware and software products and solutions, including 5G New Radio. It will also modernize Telia Norway’s radio network as part of transition to 5G technology, including deployment of its Spectrum Sharing software, which will enable Telia to share its spectrum between 4G and 5G use.

Through this deal, Ericsson has strengthened its position in the Nordic countries. The companies expect 5G rollout to begin in 2020, and the first 5G commercial services are likely to be available next year. Ericsson and Telia intend to provide nationwide 5G coverage in Norway by the end of 2023. Ericsson aims to work in partnership with Telia to bring superlative commercial 5G experience to customers.

Ericsson continues to execute its strategy and is well on track to achieve its 2020 financial goals. The company is investing in its comprehensive 5G-ready portfolio to enable communication service providers’ seamless migration to 5G technology. Its investments in R&D over the past years have secured a competitive and industry-leading offering. Artificial intelligence and automation are key enablers for its future business development, creating customer and shareholder value.

Ericsson has been focusing on 5G system development and has undertaken several notable endeavors to position itself for market leadership. Growth in 5G subscriptions is estimated to be the fastest in North America with 63% of projected mobile subscriptions within the next five years, followed by North East Asia with 47% and Europe with 40%.

As 5G devices increasingly become available and more 5G networks go live, more than 10 million subscriptions are estimated globally by the end of 2019. Ericsson has been working with operators to help in their network modernization, while optimizing plenty of opportunities.

Ericsson’s shares have lost 9% against the industry’s growth of 12.3% year to date. Favorable industry trends are likely to boost its long-term growth and profitability.

Ericsson currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader industry are PCTEL, Inc. PCTI, Nokia Corporation NOK and T-Mobile US, Inc. TMUS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PCTEL surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 146.4%.

Nokia surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 89.3%.

T-Mobile surpassed earnings estimates in each of the trailing four quarters, the average surprise being 17.9%.

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