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Ericsson to Help Telenor Transform to 5G in Key Markets

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EricssonERIC recently inked a deal with Norwegian multinational telecommunications firm Telenor Group to help it better adapt to the modalities of upgraded network infrastructure to embrace 5G technology. The strategic deal will help Telenor to transform its core network in key European markets of Sweden, Denmark and Norway.

Per the Network Function Virtualization contract, Telenor will deploy Ericsson Cloud Core solutions for 5G across multiple data centers in designated locations, leveraging Ericsson's portfolio of network function solutions and related services such as Policy Control, virtual IMS and virtual User Data Consolidation. This will help Telenor to be more agile as it aims to launch commercial 5G services using both fixed and mobile access. In addition to improving operational efficiency, the transformation will augment the network capabilities for seamless IoT applications and other potential future services.

The latest collaboration strengthens the business relationships between the two firms, with Ericsson being a long-term partner of Telenor in Scandinavia, supporting its expansion across multiple markets in fixed and mobile networks in the region. The network transformation will further provide Telenor state-of-the-art virtual core applications that serve mobile and fixed access and extend the lifecycle of its legacy network.

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. Further, to maintain superior performance as traffic increases, there is also a continuous need for network tuning and optimization. Ericsson, being one of the premier telecom services providers, is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity. Notably, Ericsson is the world's largest supplier of LTE technology with a significant market share and has established a large number of LTE networks worldwide. The company has outperformed the industry in the past year with an average return of 49.9% compared with a rise of 5.4% for the latter.

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 standardization of 5G is the cornerstone for digitization of industries and broadband. Moreover, Ericsson foresees mainstream 4G offerings to give way to 5G technology in the future. Meanwhile, the impending deployment of 5G networks in 2020 is expected to boost the adoption of IoT devices with technologies like network slicing gaining more prominence. Such positive industry trends are expected to boost the company's long-term growth. Ericsson plans to accelerate its planned cost cuts and efficiency measures, and focus on its core business of selling networking equipment prior to the expected roll-out of 5G networks.

Ericsson currently sports a Zacks Rank #1 (Strong Buy). Other stocks in the industry worth considering include Harris Corporation HRS , Juniper Networks, Inc. JNPR and Nokia Corporation NOK , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 stocks here .

Harris topped earnings estimates in each of the trailing four quarters, the average surprise being 7.1%.

Juniper has a long-term earnings growth expectation of 5.3%. It beat earnings estimates in each of the trailing four quarters, the average surprise being 11%.

Nokia has a long-term earnings growth expectation of 9.2%. It surpassed earnings estimates twice in the trailing four quarters, the average positive surprise being 4.9%.

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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.


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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