Ericsson ERIC recently announced that it has entered into an agreement with Econet Wireless Zimbabwe to expand the latter’s telecommunications infrastructure by boosting network scalability, reliability and unlock advanced capabilities such as automation and virtualization. Ericsson and Econet has a long-standing business relationship spanning decades. In 2023, Econet utilized Ericsson’s cloud-native dual-mode 5G Core solution to upgrade its core network and accelerate 4G and 5G installation.
In the current venture with Ericsson, Econet is integrating 5G Core cloud-native network functions to launch 5G standalone across its network. This will empower Econet to augment its mobile broadband capabilities, match the rising demand for data traffic and support advanced use cases from both individual and enterprise customers. Ericsson will offer Econet lifecycle management for its current and new Virtual Network Function and Cloud Network Function nodes. The advanced infrastructure will deliver greater cost and power efficiency and effectively facilitate Econet’s Network Function Virtualization and Ericsson Cloud Native Infrastructure Solution for rising workloads. ERIC will also provide a Cloud Core Exposure Server to enable Econet to give developers secure access to the latest core network functionalities. These features from Ericsson’s solution will significantly bolster Econet’s network capabilities.
Recently, Ericsson also collaborated with UNITEL, a prominent communication company in Angola, which has leveraged Ericsson’s comprehensive solution suite to complete its network modernization initiatives. In this venture, Ericsson has installed its dual-mode 5G Core solutions to support the migration from 2G and 3G services to 4G and 5G services. ERIC also deployed IP Multimedia Subsystem to deliver real-time communication for both business and individual users.
Will This Venture Drive ERIC’s Share Performance?
The availability of consistent network connectivity allows people to seamlessly access education, healthcare, financial and several other critical services. Lack of network access can undermine socio-economic growth and development. To address these issues and foster digital inclusivity, several government and telecom operators are undertaking various initiatives to expand their network capacity and coverage. Ericsson, with its comprehensive network portfolio, is well-positioned to capitalize on this trend. This bodes well for long-term growth.
Ericsson is witnessing headwinds in the Africa region for the last few quarters due to macroeconomic challenges, forex volatility, intense price competition and lower customer spending. The recent customer wins will likely strengthen its foothold in the region.
ERIC’s Stock Price Movement
Shares of Ericsson have gained 55.5% over the past year compared with the industry's growth of 47.2%.
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ERIC’s Zacks Rank and Key Picks
Ericsson currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader industry have been discussed below.
InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the trailing four quarters, it delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.
Celestica Inc. CLS carries a Zacks Rank #2 (Buy) at present. The company provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers.
United States Cellular Corporation USM sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 150%.
U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
United States Cellular Corporation (USM) : Free Stock Analysis Report
Ericsson (ERIC) : Free Stock Analysis Report
Celestica, Inc. (CLS) : Free Stock Analysis Report
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
