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Ericsson Partners With Zain for Advanced 5G Network Services

Zacks Equity Research

Ericsson ERIC recently collaborated with telecom behemoth — Zain — to meet growing data traffic demands and deliver high-quality mobile broadband and fixed wireless experience in Bahrain. Per the agreement, the Swedish telecom maker will provide 3GPP standards-based 5G new radio hardware and software from its radio system portfolio, thereby creating a major networking platform for innovation. Equipped with Massive MIMO solutions, subscribers are also expected to benefit from next gen mobile and network services.

The Collaboration

Ericsson’s advanced 5G portfolio will modernize Zain’s network from LTE to 5G, thereby providing enhanced coverage while simultaneously strengthening its current network. This trailblazing digitalized strategy will feature Ericsson Cloud Packet Core and Voice-over-LTE solutions to accelerate the deployment of innovative services for enterprise and industry customers by introducing advanced 5G technologies across Bahrain.

The alliance is also expected to be a major milestone as Zain aims to foster 5G network services across automotive, health and energy sectors by being the sole telecom network company in the country to undergo such a radical transformation. In addition to improving operational efficiency, Ericsson’s 5G portfolio will enhance network capabilities for IoT applications and other potential future services. The deal represents an opportunity for Ericsson to showcase its next-generation mobile network technology in the highly profitable Middle Eastern market. This partnership also contributes to Bahrain’s 2030 innovation strategy as Zain moves toward launching advanced commercial 5G services, using both fixed and mobile access.

With the new deal, Ericsson now claims more than 70 commercial 5G agreements or contracts with unique communication service providers, of which 22 are live networks.

Existing Business Scenario

With the emergence of the smartphone market and subsequent usage of mobile broadband, Ericsson, being one of the premier telecom service providers, is much in demand among the operators to expand network coverage for higher speed and capacity. Markedly, the company is the world’s largest supplier of LTE technology with a huge market share. It continues to execute its strategy and is well on track to achieve its 2020 financial goals with comprehensive 5G-ready portfolio to enable seamless migration to 5G technology. Artificial intelligence and automation are key enablers for its future business development, creating customer and shareholder value.

As 5G devices increasingly become available, more than 10 million subscriptions are estimated globally by the end of 2019. The telecom equipment maker has also been working with operators to help in network modernization, while optimizing plenty of opportunities to position itself for market leadership.

Backed by inherent growth potential, the stock has gained 1.7% compared with the industry’s rise of 26% in the year-to-date period.



Zacks Rank & Stocks to Consider

Ericsson currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are QUALCOMM Incorporated QCOM, Viasat, Inc. VSAT, both sporting a Zack Rank #1 (Strong Buy) and Verizon Communications Inc. VZ, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

QUALCOMM surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 8.7%.

Viasat outpaced estimates in each of the preceding four quarters, the average positive earnings surprise being 252%.

Verizon exceeded estimates in each of the trailing four quarters, the average positive earnings surprise being 2.2%.

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