Ericsson To Power Saudi Arabia's Digitization & IoT Drive

Ericsson (BS:ERICAs) (NASDAQ:ERIC) recently inked a definitive agreement with Saudi Arabia’s telecommunications service provider Mobily to accelerate the digitalization and IoT drive across the country. The deal is likely to foster the development of 5G technology in Saudi Arabia and facilitate the carrier to significantly scale traditional wireless networks to provide 5G services to varied customers.

Per the deal, Mobily will leverage the comprehensive portfolio of Ericsson and deploy solutions spanning 5G radio access technologies to digitize both government and private sector businesses. Ericsson 5G radio access technologies provide the requisite infrastructure to support the burgeoning demand of high-bandwidth connections for real-time communication requirements of mission-critical applications.

With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has increased manifold. Further, to maintain superior performance as traffic increases, there is also a continuous need for network tuning and optimization. Ericsson, being one of the premier telecom services providers, is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity. The Sweden-based telecommunications equipment provider is arguably the world’s largest supplier of LTE technology with a significant market share, and has established a large number of LTE networks worldwide.

Notably, Ericsson has secured more than 75 commercial 5G agreements with unique communication service providers, of which 24 are live networks. The company is increasingly focusing on 5G system development to capitalize on the upcoming market opportunities. The company believes standardization of 5G is the cornerstone for digitization of industries and broadband. Moreover, Ericsson foresees mainstream 4G offerings to give way to 5G technology in the future.

Meanwhile, the impending deployment of 5G networks is expected to boost the adoption of IoT devices, with technologies like network slicing gaining more prominence. Currently, Ericsson is investing in its competitive 5G-ready portfolio to enable customers to seamlessly migrate to 5G. AI and automation remain key enablers for its business development, while recurrent contracts ensure a steady revenue stream.

The stock has gained 0.6% in the past year compared with the industry’s rise of 19.3%.

Ericsson currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Qualcomm Incorporated (NASDAQ:QCOM) , Ubiquiti Inc. (NASDAQ:UI) and PCTEL Inc. (NASDAQ:PCTI) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Qualcomm has a long-term earnings growth expectation of 14%. It delivered an average positive earnings surprise of 8.7% in the trailing four quarters, beating estimates on each occasion.

Ubiquiti has a long-term earnings growth expectation of 9.4%. It delivered an average positive earnings surprise of 16.1% in the trailing four quarters, beating estimates thrice.

PCTEL delivered an average positive earnings surprise of 150.6% in the trailing four quarters, beating estimates on each occasion.

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