Ericsson & China Telecom Complete ESS-Backed 5G Data Call

Ericsson ERIC recently announced that it has collaborated with a leading telecommunication services provider — China Telecom — to conclude a 5G Standalone (SA) data call over the latter’s commercial network. The data call trial capitalized on Ericsson’s avant-garde spectrum sharing technology to deliver superior 5G experience to customers, while accelerating the 5G rollout process. The latest tech milestone is touted as China’s first 5G SA data call test over a commercial network. The partnership will enable Ericsson to leverage its best-in-class capabilities in wireless core services platform, thereby reinforcing its position in the East Asian country.

As majority of the frequency bands allocated nowadays are in high- and mid-bands, network operators face a tough time in functioning wide-area 5G in lower-frequency bands. To overcome this headwind, Ericsson Spectrum Sharing (ESS) transforms the 5G deployment process by enabling operators to re-use infrastructure assets and introduce wide area 5G coverage with access to advanced 5G use cases. This innovative technology is supported by major chipset vendors and is based on 3rd Generation Partnership Project standard on the back of intelligent algorithms. ESS allows 5G network to work on existing 4G bands with negligible impact on live end-user service, thereby making it a cost-effective solution.

Notably, the ESS-backed 5G data call trial run was conducted in the city of Deyang, China over a 2.1GHz 5G network of China Telecom. It was primarily conducted, keeping in mind, the accretive network requirements of both 4G and 5G commercial users. Post the demonstration, it was observed that ESS technology can seamlessly roll out 5G Non-Standalone New Radio (NSA NR), 5G SA and 4G without the need for a dedicated 5G spectrum. As part of nationwide 5G deployment drive, the state-owned telecom carrier can now deploy Frequency Division Duplex-backed New Radio 5G SA networks across the communist nation. Apart from establishing a streamlined network infrastructure, the industry-leading technology will tap new business opportunities for the overall economic development.

Ericsson and China Telecom have been working closely for quite some time now on the commercialization of standalone core 5G network. Few months back, the Swedish network vendor inked a deal with China Telecom and China Unicom to offer core products and solutions for 5G network connectivity across the nation. These include Cloud Unified Data Management and Policy, and Cloud Packet Core products. In particular, the network equipment vendor deployed Ericsson Radio System and ESS in both the carriers to strengthen their 5G capabilities. As part of the latest collaboration, it is worth mentioning that China Telecom and Ericsson have also completed the authentication of basic services such as voice over LTE (VoLTE) and interoperability with the existing 4G base stations.

Currently, Ericsson is witnessing healthy momentum in its business with continued investments for technology leadership, including 5G. Its mobility report predicts 1.9 billion mobile 5G subscriptions globally by the end of 2024, up from 1.5 billion predicted in 2018. In Networks, the company’s ongoing activities include investments in R&D to safeguard a leading product portfolio and cost leadership, increase investments in automation and serviceability while lowering costs, and selectively gain market shares led by technology and cost competitiveness. Further, it is on track with 2020 and 2022 financial targets while progressing toward building a stronger company in the long term.

Ericsson currently has a Zacks Rank #4 (Sell). It has a long-term earnings growth expectation of 26.3%. The stock has gained 26.8% compared with industry’s growth of 25.6% in the past year.

Some better-ranked stocks in the broader industry are Viasat, Inc. VSAT, Corning Incorporated GLW and Harmonic Inc. HLIT. While Viasat sports a Zacks Rank #1 (Strong Buy), Corning and Harmonic carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Viasat delivered a trailing four-quarter positive earnings surprise of 361.3%, on average.

Corning delivered a trailing four-quarter positive earnings surprise of 39.9%, on average.

Harmonic delivered a trailing four-quarter positive earnings surprise of 4.4%, on average.

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