Ericsson (BS:ERICAs) ERIC recently collaborated with Telstra (OTC:TLSYY) Corporation Limited TLSYY to develop an indigenous enterprise edge cloud solution for use in the latter’s domain. The partnership aims to extend their relationship forged in 2019 to explore 5G edge computing use cases and network capabilities for the financial sector in association with Commonwealth Bank of Australia (OTC:CMWAY).
5G edge computing services offer the flexibility to better manage data traffic and allow businesses to route application-specific traffic where they need it and where it’s most effective — whether in the cloud, the network or on their premises. Leveraging indigenous software-defined network to enable low-latency, high-bandwidth applications for faster access to data processing, it is likely to transform the way data-intensive images are transferred across the industry on real time basis.
The latest tie-up between the two firms will facilitate consumption-based interfaces between cloud providers and the Telstra network for seamless orchestration, network exposure and service assurance. This is expected to improve the service capabilities of the carrier and enable it to significantly scale traditional wireless network to provide 5G services to varied customers. This, in turn, is likely to redefine the way telecom carriers operate across the globe and give rise to more flexible and agile networks to effectively handle the wide proliferation of data and other bandwidth-intensive applications.
Ericsson is focusing on 5G system development and has undertaken many notable endeavors to position itself for market leadership on 5G. The company believes that standardization of 5G is the cornerstone for digitization of industries and broadband. Ericsson foresees mainstream 4G offerings to give way to 5G technology in the future. The deployment of 5G networks is expected to boost the adoption of IoT devices with technologies like network slicing gaining more prominence.
Notably, Ericsson currently has 113 commercial 5G agreements with operators (of which 63 are publicly announced) and includes 65 live 5G networks in 33 countries. 5G will likely accelerate the digital transformation in many industries, enabling new use cases in areas such as IoT, automation, transport and Big Data. Such positive industry trends are expected to boost the company’s long-term growth.
The stock has gained 35.3% year to date compared with the industry’s rise of 28.9%.
We remain impressed with the focused attempts of this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the broader industry are Viavi Solutions (NASDAQ:VIAV) Inc. VIAV and Knowles (NYSE:KN) Corporation KN, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Viavi delivered a positive earnings surprise of 17.5%, on average, in the trailing four quarters.
Knowles has a long-term earnings growth expectation of 10%. It delivered a positive earnings surprise of 12.5%, on average, in the trailing four quarters.
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