Ericsson to Modernize Teracom’s Network for Digital Sweden

Ericsson ERIC recently communicated that it has been chosen by Teracom AB as a technology partner for its nationwide 4G network. Teracom is a state-owned service provider in Sweden, offering communications services to public and private national critical infrastructure enterprises. Financial terms of the deal remained undisclosed.

Per the agreement, which also includes products and solutions from Ericsson’s partner Juniper Networks JNPR, Ericsson will provide radio access network and its Cloud Core products for 4G, as well as transport solutions and security gateways. The Swedish telecom gear maker’s cutting-edge technology will enable Teracom to offer customers reliable connections and a potential path toward 5G.

Teracom is using the low 450 MHz band, which is well suited for coverage that benefits remote locations and utilities like electric and water. The new network will be rolled out in second-quarter 2020. Ericsson’s Radio System provides a powerful mobile broadband with optimized total cost of ownership per gigabyte and efficient 5G introduction. With a modernized 4G network, Teracom will be able to support an increasingly digitized society in Sweden.

Ericsson is witnessing 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 are to invest in R&D to safeguard a leading product portfolio and cost leadership; increase investments in automation and serviceability driving down costs; and selectively gain market shares based on technology and cost competitiveness.

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

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

Ericsson has a long-term earnings growth expectation of 17.7%. The stock has lost 19.6% compared with 26.4% decline recorded by the industry in the past three months.

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

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

Motorola topped earnings estimates in the trailing four quarters, the surprise being 6.6%, on average.

Qualcomm surpassed earnings estimates in the trailing four quarters, the beat being 10%, on average.

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