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Ericsson to Help SmarTone Build 5G Network in Hong Kong

Enhancing their long-term partnership, Ericsson ERIC has inked a five-year agreement with SmarTone, a leading communications service provider in Hong Kong, for the deployment of 5G service. The Swedish telecom gear maker is the sole supplier of SmarTone’s 4G network and will continue as its single 5G vendor. Financial terms of the deal remained undisclosed.

Reportedly, SmarTone will be the first operator in Hong Kong to deploy Ericsson Spectrum Sharing (ESS). ESS allows operators to run LTE and 5G New Radio simultaneously on the same carrier frequencies and base station hardware. With a software installation, ESS offers the introduction of 5G over a wide area, for all 5G-enabled devices leveraging 4G spectrum and existing Ericsson Radio System infrastructure. ESS and inter-band NR carrier aggregation enable a fast introduction of 5G and smooth evolution of 5G networks, which maximize the infrastructure usage and spectrum assets.

With ESS, SmarTone will be able to more efficiently allocate its spectrum assets according to traffic demands, using existing infrastructure. SmarTone’s customers will also be able to enjoy enhanced overall network experience brought by 5G. The new agreement also includes Ericsson’s Dual-Mode 5G Core, enabling SmarTone to quickly launch advanced services and run efficient operations through a cloud-native solution combining Evolved Packet Core and 5G Core architectures. Ericsson will also deploy automated provisioning and insight-driven service assurance with Ericsson Orchestration and management systems to simplify operations.

With AI-powered radio access capabilities, the SmarTone network will also benefit from ML and real-time processing on the baseband. This will allow the network to instantaneously direct the 5G end-user to the best 5G cells, providing better coverage and a superior 5G experience. Ericsson’s Security Reliability Model ensures security and privacy by design in all its network infrastructure products across radio, core, cloud infrastructure, and operational and business support domains.

Ericsson is witnessing healthy momentum in its business, based on the strategy to increase its investments for technology leadership, including 5G. In Networks, the company’s ongoing activities are to invest in R&D to safeguard a leading product portfolio and cost leadership; increase investments in automation and serviceability driving down costs; and selectively gain market shares based on technology and cost competitiveness.

Moreover, Ericsson is on track with its 2020 and 2022 financial targets while making progress toward building a stronger company in the long term. It has invested in R&D and supply chain capacity in order to increase market share. The company continues to focus on restructuring plan to cut costs and streamline focus areas, as well as explore options for the media business.

Ericsson’s “cost and efficiency program” has been devised to generate higher cost savings. The company is focusing on structural changes that will help generate lasting efficiency gains and boost cost competitiveness. It intends to increase investment in certain core areas to develop a product portfolio. Ericsson is also focusing on stabilizing its IT, cloud and project portfolio, and re-establishing profitability in managed services by managing existing contracts as well as investing in automation.

Ericsson has a long-term earnings growth expectation of 17.7% compared with 14.5% for the industry. The stock has lost 17.4% compared with the industry’s decline of 26.8% in the past six months.

Ericsson currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industry include Motorola Solutions, Inc. MSI, Qualcomm Incorporated QCOM and Ubiquiti Inc. UI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Motorola topped earnings estimates in the trailing four quarters, the surprise being 6.6%, on average.

Qualcomm surpassed earnings estimates in the trailing four quarters, the beat being 10%, on average.

Ubiquiti topped earnings estimates twice in the trailing four quarters, the positive surprise being 5.7%, on average.

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