Ericsson ERIC has collaborated with Mobile TeleSystems PJSC MBT and the Commonwealth of Independent States for introduction of IoT and 5G technologies in Russia. In particular, Ericsson and Mobile TeleSystems have inked a Memorandum of Understanding (‘MOU’), which entails the spectrum studies of next generation network.
On an initial level, both the firms will work towards the construction of requirements and use cases along with evaluation of performance and efficiency of 5G key technology components. Additionally, as per the alliance, Ericsson will implement 5G-related technologies like Ericsson Lean Carrier and the use of unlicensed spectrum in the MTS' network. The companies have planned the first test system deployment of 5G technology in the coming year, with demonstration set for FIFA World Cup 2018.
We view the abovementioned move as a strategic fit for Ericsson, given the company’s motive of leveraging 5G technology especially across the untapped regions of the world. Earlier this month, Ericsson highlighted the bright prospects of 5G networks in the latest edition of Ericsson Mobility Report. As per company sources, 5G mobile subscription count is projected to reach 150 million by 2021 with the U.S., China, South Korea and Japan grabbing the highest number of 5G subscriptions.
Thus, Ericsson has been currently focusing on fortifying the 5G system development and has undertaken many notable endeavors related to that in the past. The company believes that standardization of 5G is the cornerstone for digitalization of industries as well as broadband. It is also important for different global network operators to provide uniform customer experience.
In our opinion, Ericsson’s aim to support 5G commercialization with its market-leading technologies are well on track with 11 operators already having deployed 5G Radio Test Beds to implement live test networks. Going forward, we believe the improved 5G Radio Prototypes version will gain fast market traction, thereby supplementing the company’s profitability.
Ericsson currently carries a Zacks Rank #4 (Sell). A couple of better-ranked stocks in the industry include InterDigital, Inc. IDCC and AudioCodes Ltd. AUDC. Both stocks hold a Zacks Rank #1 (Strong Buy).
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