Ericsson ERIC has secured a 5G contract with Chunghwa Telecom to modernize Taiwan’s network infrastructure. The collaboration with the Taiwan-based service provider builds on a Memorandum of Understanding signed at Mobile World Congress 2024, where both companies committed to advancing 5G technology focusing on intelligent network operations and AI-driven energy efficiencies.
How Will ERIC’s Solutions Aid Chunghwa Telecom?
The contract encompasses Ericsson's comprehensive 5G Radio Access Network (RAN) portfolio, featuring advanced ultralight remote radios like the dual-band Radio 4490HP. This cutting-edge technology is projected to achieve a remarkable 54% reduction in embodied carbon footprint and more than 40% lower energy consumption compared to current systems. These enhancements are set to improve multi-band capacity and uplink performance while promoting energy efficiency.
Additionally, Chunghwa Telecom will leverage Ericsson's state-of-the-art AI Intelligent RAN power-saving solution. Integrated into Ericsson's Service Continuity AI app suite, this solution utilizes predictive modeling to analyze real-time network data. The solution optimizes operations by activating, deactivating or maintaining network elements based on neighboring cell activities, ensuring seamless service continuity and enhancing user experience across diverse 5G use cases such as private networks, network slicing and mission-critical networks. By automating the monitoring and optimization of complex networks, it predicts network load and enhances energy efficiency, aligning with the operator’s sustainability goals.
Another crucial element of this modernization initiative is Ericsson’s Site Digital Twin technology, which offers communication service providers improved control throughout the full network deployment cycle by providing a detailed digital representation of the site and network, thereby facilitating quicker and more automated design and deployment processes.
Does ERIC Stand to Gain From the Partnership?
With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has increased in recent times. Ericsson is focusing on 5G system development and has undertaken many notable endeavors to position itself for market leadership on 5G.
The company believes that the standardization of 5G is the cornerstone for the digitization of industries and broadband. It empowers developers to enhance the flexibility of applications and allows service providers to better align network connectivity with user-specific requirements.
Ericsson's innovative solutions are reshaping connectivity across sectors, from enhancing network visibility through advanced 5G deployments to revolutionizing industries with robust IoT innovations. The company’s leadership in cloud and edge computing is providing scalable solutions for efficient digital infrastructures worldwide, ensuring flexibility and resilience in a rapidly evolving digital landscape.
Leveraging its state-of-the-art technologies, Ericsson is poised to enhance Chunghwa Telecom’s operational efficiency and scale down its costs while maintaining high service quality. This will likely help Chunghwa Telecom to reduce its carbon footprint aligning with global environmental goals for a sustainable future.
These advancements are expected to generate incremental demand for Ericsson’s solutions, leading to higher revenues. An improved financial performance is likely to propel the stock upward.
ERIC’s Stock Price Performance
Shares of Ericsson have gained 84.7% over the past year compared with the industry’s growth of 59.2%.
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ERIC’s Zacks Rank and Key Picks
Ericsson currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader industry have been discussed below.
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Its excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 4.19%.
Workday Inc. WDAY sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%. WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains.
Ooma, Inc. OOMA currently carries a Zacks Rank #2 (Buy). In the last reported quarter, it delivered an earnings surprise of 7.14%.
Ooma provides communications solutions and other connected services to small business, home and mobile users. The company's products include Ooma Office for small businesses, Business Promoter, Ooma Telo for home, Ooma end-point devices, Ooma Premier Service for Telo, Talkatone Application as well as caller identification, call-waiting and voice mail services. Ooma is based in Palo Alto, United States.
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