Ericsson-Magyar Telekom Partnership Brings 5G in Hungary

On Apr 9, Ericsson ERIC announced the launch of a commercial 5G network in Hungary with Magyar Telekom — a leading telecommunications company. The Swedish telecom gear maker currently has 86 commercial 5G agreements with operators (of which 39 are publicly stated) and includes 29 live 5G networks on four continents. Initial services are live in select locations of Budapest and Magyar Telekom’s headquarters in Konyves Kalman korut.

The feat marks a new milestone in the long-standing partnership between the companies spanning 2G, 3G and 4G. Magyar Telekom, a subsidiary of Deutsche Telekom AG DTEGY, utilized 5G-enabled products and solutions from the Ericsson Radio System. Notably, the launch comes two weeks after Magyar Telekom secured the related 3.5GHz spectrum in an auction on Mar 26.

Ericsson Radio System comprises hardware, software, and services for radio, RAN Compute, antenna system, transport, power as well as site solutions. It enables smooth and cost-effective migration from 4G to 5G, supporting communications service providers to launch the avant-garde technology and grow 5G coverage fast. The company’s 5G radio access technologies provide the infrastructure required to meet the growing demand for high-bandwidth connections and support the real-time, high-reliability communication requirements of mission-critical applications.

Ericsson is seeing healthy momentum in its business, based on the strategy to increase its investments for technology leadership, including 5G. 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.

The company’s “cost and efficiency program” has been devised to generate higher cost savings. Ericsson is focusing on structural changes that will help generate lasting efficiency gains and boost cost competitiveness. It is also focusing on stabilizing its IT, cloud and project portfolio as well as and re-establishing profitability in managed services by managing existing contracts as well as investing in automation.

Further, Ericsson is on track with its 2020 and 2022 financial targets while progressing toward building a stronger company in the long term. It has invested in R&D and supply chain capacity to increase market share. The company continues to focus on a restructuring plan to cut costs and streamline focus areas as well as explore options for the media business.

Ericsson has a long-term earnings growth expectation of 17.7% compared with 14.9% of the industry. The stock has lost 2.6% compared with the industry’s decline of 11.7% in the past six months.

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

A couple of better-ranked stocks in the industry are Qualcomm Incorporated QCOM and InterDigital, Inc. IDCC, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Qualcomm has a trailing four-quarter positive earnings surprise of 10%, on average.

InterDigital has a trailing four-quarter positive earnings surprise of 62%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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