On Feb 25, 2019, the Swedish telecom equipment maker communicated its intention to buy Kathrein’s antenna and filter business. The company remains on track to provide its customers with a broadened Ericsson Radio System. In addition to enhancing its portfolio of antenna and filter products, the buyout will bring crucial competence required to evolve radio access products.
With more focus on the antenna and filter business, Ericsson plans to expand its offering to further optimize site space, which is important for the introduction of 5G. The company has purchased an organization focusing on R&D, production and sales, based in more than 20 locations including Germany, Romania, the United States, Mexico and China.
With most of the professionals based in Europe, Ericsson has complemented its strong R&D base across 21 locations on the continent. The acquired business is now added as a separate unit in Business Area Networks and is going to be reported in Segment Networks, with an expected positive contribution to 2020 profitability targets.
Ericsson continues to execute its strategy and is well on track to achieve its 2020 financial goals. The company is investing in its comprehensive 5G-ready portfolio to enable communication service provider’s seamless migration to 5G technology. Its investments in R&D over the past years have secured a competitive and industry-leading offering. Artificial intelligence and automation remain key enablers for its future business development, creating customer and shareholder value.
Ericsson has been focusing on 5G system development and has undertaken several notable endeavors to position itself for market leadership. The growth in 5G subscriptions is estimated to be the fastest in North America with 63% of projected mobile subscriptions within the next five years, followed by North East Asia with 47% and Europe with 40%.
As 5G devices increasingly become available and more 5G networks go live, more than 10 million subscriptions are estimated globally by the end of 2019. Ericsson has been working with operators to help in their network modernization, while optimizing on plenty of opportunities.
Ericsson’s shares have lost 12.2% against the industry’s growth of 11.9% in the year-to-date period. Favorable industry trends are likely to boost its long-term growth and profitability.
Source ZACKs RESEARCH
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