Ericsson Partners Omantel To Boost Network Digitalization

Ericsson (BS:ERICAs) (NASDAQ:ERIC) recently announced that it has inked an agreement with Omantel to manage its multi-vendor mobile networks in Oman. The strategic deal, which has been renewed for the next five years, underscores the Swedish equipment maker’s efforts to capitalize its best-in-class capabilities in automation platforms, thereby benefiting Omantel with seamless network infrastructure and enhanced customer experience.

Pursuant to the agreement, Ericsson’s advanced portfolio of 5G technology and automation use cases will enhance Omantel’s fixed and multi-line (2G, 3G, 4G and 5G) network access to deploy improved network performance in the Middle East country. The deal, which initially took place in 2016, involves a significant stake of Omani government. Apart from seamless network operations, it also enables Omantel to utilize various Network Functions Virtualization (NFVi) services.

Notably, NFVi, which leverages Ericsson’s top-notch automation and maintenance capabilities, has proved to be a popular standard in the last few years. It is primarily known for increasing operational network efficiency and minimizing capital and operational expenditures for an enhanced network infrastructure. Keeping in mind the current scenario of radical technological disruptions, the renewed partnership aims to shift its focus from network-centric operations to user experience-centric operations, which makes it more likely for Omantel to deliver an innovative network experience for subscribers.

With the emergence of smartphone market and subsequent usage of mobile broadband, Ericsson, being one of the premier telecom service providers, is much in demand among the operators to expand network coverage for higher speed and capacity. Markedly, the company is the world’s largest supplier of LTE technology with a huge market share.

Currently, the Swedish telco is witnessing healthy momentum in its business on the back of the strategy to increase investments for technology leadership, including 5G. In Networks segment, the company’s ongoing activities are focused on investing 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.

Ericsson is on track with its 2020 and 2022 financial targets while making progress toward building a stronger company in the long term. In addition, it is well on track to achieve its 2020 financial goals with a comprehensive 5G-ready portfolio to enable seamless migration to 5G technology. AI and automation are key enablers for future business development, creating customer and shareholder value.

Shares of Ericsson have lost 35.5% compared with industry’s decline of 18.7% in the past year.

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the broader industry are Comtech Telecommunications Corp. (NASDAQ:CMTL) , Telenav, Inc. (NASDAQ:TNAV) and PCTEL, Inc. (NASDAQ:PCTI) . While Comtech and Telenav sport a Zacks Rank #1 (Strong Buy), PCTEL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech exceeded estimates in the trailing four quarters, the positive earnings surprise being 85.9%, on average.

Telenav outpaced estimates twice in the trailing four quarters, the positive earnings surprise being 77.1%, on average.

PCTEL surpassed estimates in the trailing four quarters, the positive earnings surprise being 108.9%, on average.

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Ericsson (ERIC): Free Stock Analysis Report

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