Ericsson 5G Plug-Ins Help Network Operators Transition To 5G

Swedish communication technology and services giant Ericsson (ST:ERICAs) (NASDAQ:ERIC) unveiled a new range of software-driven network upgrade options called 5G Plug-Ins. These 5G Plug-Ins are designed to be integrated within the current networks of operators, thus allowing them to accelerate their evolution to 5G.

5G Plug-Ins

Supported by the Ericsson Radio System, the software-driven 5G Plug-Ins cover a wide range of emerging radio technologies, from multi-user MIMO to intelligent connectivity to RAN virtualization.

The plug-ins will allow operators to enhance their mobile broadband, fixed wireless and IoT services, and will deal with varied 5G use cases from mobile HD video, haptic feedback-enabled drones and self-driving cars to fiber-equivalent residential wireless access.

The software will be available to carriers for field trials this year itself, with pre-standards based commercial deployments slated to begin next year.

Enabling Transition to 5G

It’s common knowledge that 5G has achieved rapid momentum over the past year. In the near future, operators will likely need to support zillions of IoT devices which are expected to be wirelessly connected. This has huge technical implications, and its implementation will entail huge time and costs.

At present, in the absence of spectrum allocations or established standards, these 5G plug-ins offer carriers a chance to field-test some pre-5G technologies. Thus, 5G Plug-Ins, in essence, offer operators a migration method that enables them to leverage current network investments to facilitate the evolution to 5G.

Ericsson: Driving 5G Deployment

Industry players expect 5G standards to be finalized in 2019 at the earliest, with commercial deployments to roll out after 2020. Thus, Ericsson’s 5G Plug-Ins offer mobile operators the opportunity to try out and deploy 5G technology this year itself, thus giving them the opportunity to evolve to 5G at their own speed.

Ericsson continues to aggressively drive progress in 5G technology, and currently has 5G network trials scheduled with 24 operators. In addition, it is working on 5G projects and future use cases with 12 industry partners and about 20 research institutes and universities.

Late last year, the company released a mobility report that highlighted bright prospects for 5G network space. Per the report, the company expects 5G mobile subscriptions to increase to 150 million by 2021, with the U.S., China, South Korea and Japan projected to generate the highest number of subscriptions.

Ericsson’s Present & Future

Ericsson is the world’s largest supplier of LTE technology, and about 40% of the world's mobile traffic is carried over Ericsson networks. The company is making commendable progress with respect to 5G initiatives and stands to benefit significantly from the impending commercialization of the networks.

We believe that Ericsson and its partners will emerge as key players in defining the next generation of mobile network technology and its subsequent commercialization.

However, stiff competition and currency fluctuations have been weighing on this Zacks Rank #4 (Sell) company’s performance lately. Ericsson is also grappling with waning sales in some key end-markets, slowdown in 4G deployment in China and ongoing industry consolidation among customers and major rivals.

Some better-ranked stocks in the same space include Ubiquiti Networks, Inc. (NASDAQ:UBNT) , Sonus Networks, Inc. (NASDAQ:SONS) and Clearfield, Inc. (NASDAQ:CLFD) . While Ubiquiti sports a Zacks Rank #1 (Strong Buy), Sonus and Clearfield both hold a Zacks Rank #2 (Buy).