Ericsson (ERIC) To Provide Media Delivery Services For SBS

Telefonaktiebolaget LM Ericsson (ST:ERICAs) (publ) (NASDAQ:ERIC) inked an exclusive contract to provide media delivery services for Australian public service broadcaster, Special Broadcasting Service (“SBS”), fortifying its position as a leading provider of broadcast and media services in Australia and globally.

Per the contract, Ericsson will leverage its broadcast and media services hub in London to cumulate, prepare and deliver content from multiple content owners and distributors globally. This content will be format ready for transmission and will be delivered directly to SBS’s headquarters in Sydney.

Further, Ericsson will also provide Quality Control and deliver full technical metadata, in accordance with SBS’s technical and editorial specifications.

This deal will enable SBS to transition from a manual delivery process to a digitised practice, thus making its content aggregation process more efficient and streamlined. It will also lend SBS the flexibility and agility required to cater to the dynamic demands of managing media assets.

As a leading global provider of broadcast and media services, Ericsson has worked with world’s most famous broadcasters, platforms and content producers, including BBC, HBO, 20th Century Fox, Liberty Global (NASDAQ:LBTYA), Sky, Bonnier Group, TV5 Monde and France 24.

In April this year, Ericsson signed a multi-year access services contract with SBS to provide both live and file-based captions for SBS TV. Ericsson is one of the leading providers of closed captioning services in the world, and boasts a strong presence in Australia, the UK, Germany, France, the Netherlands, Spain and the U.S.

ERICSSON LM ADR Price, Consensus and EPS Surprise

We believe that the new contract will not only help strengthen Ericsson’s live captioning business in Australia, but also boost its brand value in the global wireless equipment market.

Of late, Ericsson has been grappling with slumping demand in Russia and Brazil, and accelerating negative industry trends have further compounded its problems. Further, the company is also facing stiff competition from Huawei Technologies Co. and Nokia (HE:NOKIA) Corp. (NYSE:NOK) . To combat such critical industry concerns, Ericsson recently struck a partnership with Cisco Systems Inc. (NASDAQ:CSCO) , to boost its product line up and sell more complete networks. The company expects that the deal would generate $1 billion or more in annual sales for each company by 2018.

Whether the growth and cost-streamlining efforts of this Zacks Rank #4 (Sell) company will help it beat industry-wide demand blues, remains to be seen.

Stock to Consider

A better-ranked stock in the same space is Harris Corporation (NYSE:HRS) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Harris Corporation is an international company, focused on communications equipment for voice, data and video applications. The company has an impressive earnings surprise history for the trailing four quarters, beating estimates all through, with an average of 4.2%.

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