Ericsson (ERIC) To Power T-Mobile's OTT TV Service KNIPPR

Premium communication technology and services behemoth, Ericsson (ST:ERICAs) (NASDAQ:ERIC) , announced that it has been chosen to offer the online video platform for T-Mobile Netherlands’ KNIPPR, the latest over-the-top (OTT) TV service.

Robust Online Video Service for KNIPPR

Launched last month, T-Mobile’s KNIPPR offers freedom to the viewers to select channels of their choice and watch them from anywhere on any device. It is also compatible with Chromecast and Apple (NASDAQ:AAPL) TV and is available as an app both for tablets and smartphones. Leveraging Ericsson’s technology, KNIPPR has come up with a TV service that offers unbundled channel options, charging customers for only the channels that they choose to view.

Per the deal, Ericsson is providing its technical knowhow, including content management and preparation, digital rights management and content delivery networks, to create a comprehensive end-to-end online video service. Also, Ericsson is offering a broad range of both live and on demand TV channels for KNIPPR.

Powered by Ericsson Managed Player, Ericsson’s online video service can integrate OTT delivery and playout services to create superior content delivery on cross-platform connected devices. Furthermore, Ericsson will also provide metadata services to bolster Electronic Program Guide (EPG) of KNIPPR.

Media Industry Remains Bright

Ericsson boasts a robust content discovery portfolio with over 10 million movies and program titles covering more than 35 languages. The audience’s television viewing patterns have undergone a striking change over the past decade with the penetration of internet. Ericsson believes its technology portfolio is well suited to provide online TV services to every connected device, thus meeting changing demand patterns.

As a matter of fact, Ericsson’s growing presence in the broadcasting and media industry has been acting as a key growth driver. In a bid to fortify its foothold in this domain, the company has been extending its technology to broadcasters for merging video and mobility.

During second-quarter 2016, the company entered into an exclusive multi-year access services contract for offering live captioning services to New Zealand and Australian parliaments and Australian public service broadcasters, ABC and SBS. In addition, Ericsson inked a multi-year contract with FOX Networks Group in the Middle East to provide playout services for three new HD channels.

Near-term Challenges Pose Concerns

Reduced consumer telecom spending, including the delayed spectrum auction is playing a spoilsport for Ericsson. The company’s mobile broadband sales continue to take a beating from the soft macroeconomic environment and weakness in countries like Brazil, Russia and the Middle East. Moreover, the company has been facing investment headwinds in network developments in the Mediterranean, Northern Europe and Central Asia (especially Russia) regions as well as in Latin America and the Middle East.

Additionally, given that the company derives a major portion of its revenues in various foreign currencies, it is prone to negative impacts from currency fluctuation. During second-quarter 2016, weakening currencies across some of the major Latin America markets and floating of the Nigerian currency were the major dampeners for the company. Foreign currency fluctuations affected this Zacks Rank #4 (Sell) company sales by 7%.

Some better-ranked stocks in the same space include Ubiquiti Networks, Inc. (NASDAQ:UBNT) , QUALCOMM Inc. (NASDAQ:QCOM) and Clearfield, Inc. (NASDAQ:CLFD) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Another better-ranked stock in the industry include Konica Minolta, Inc. (KNCAY) that holds Zacks Rank #2 (Buy).

Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).

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