Ericsson Caption Services Picked By New Zealand Parliament

Network equipment and software provider Telefonaktiebolaget LM Ericsson (ST:ERICAs) (publ) (NASDAQ:ERIC) recently clinched a multi-year access services contract from the Office of the Clerk of the House of Representatives, New Zealand. The contract is a noteworthy win for Ericsson as it marks the debut of its captioning services in New Zealand.

This deal also highlights the company’s Media Services portfolio strength which has been winning multiple deals for the company in the past nine months.

Live Captioning Services

The contract requires Ericsson to offer live captioning services for TV broadcasts in the Parliament covering sessions of the New Zealand House of Representatives, effective Aug 2016. Given that one in every nine people in the country relies on captions while watching TV, the House of Representatives believes that Ericsson’s services will help the public access parliamentary information better. This will also allow the citizens to actively participate in the public decision making processes.

Media Business on a Roll

Over the past nine months, Ericsson’s media business has been raking in considerable profits, winning multiple contracts from Australian public service broadcasters like ABC and SBS, and news service provider ANC. Also, Sky News opted for Ericsson’s captioning services for its Qantas flights. In fact, Ericsson’s caption business enjoys a strong hold across multiple geographies like U.K., France, Germany, Spain, the Netherlands and the U.S.

With over 30 years of experience in this space and over 230,000 hours of captions every year, Ericsson has carved out a dominant position for itself in the TV audio description and sign-language translation services market. The company has seen steady growth in the European media market, successfully establishing itself as a prominent player offering metadata, images, search and recommendations in about 3,000 TV channels in over 30 languages.

Why a Zacks Rank #4?

Despite these positives, stiff competition, currency fluctuations and significant structural charges in the near term are proving to be headwinds, hurting the company’s financials materially. Also, waning mobile broadband sales in some key end-markets, slowdown in 4G deployment in China and the ongoing industry consolidation among customers and major rivals are compounding the challenges for this Zacks Rank #4 (Sell) company.

Better-ranked stocks in the industry include Ubiquiti Networks, Inc. (NASDAQ:UBNT) , Sonus Networks, Inc. (NASDAQ:SONS) and Clearfield, Inc. (NASDAQ:CLFD) . While Ubiquiti Networks sports a Zacks Rank #1 (Strong Buy), Sonus Networks and Clearfield carry a Zacks Rank #2 (Buy).