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Ericsson (ERIC), Telenor Team Up for AI-Driven Network Solution

Ericsson ERIC announced that it has inked a Memorandum of Understanding for three years with Telenor, a prominent telecommunication enterprise in Asia and the Nordics region. The tech partnership aims to develop and test cutting-edge AI/ML-based solutions for mobile network connectivity.

One of the primary focus areas is to drive energy efficiency and improve network performance, specifically in the RAN (Radio Access Network) domain, by utilizing advanced AI. Focus on the development of explainable AI is a vital aspect of this partnership. This feature bridges the gap between complex AI algorithms and human understanding by making the AI models more transparent and trustworthy.

The enterprises will also focus on validating AI capabilities in 5G applications and building teaching modules and resources for AI-powered telecommunications. Research insights on complex topics such as advanced ML methods will create a solid foundation of innovation to further accelerate the future growth potential across the industry.

Ericsson is striving to move toward zero-touch provisioning in operations for consumer-facing network domains, leveraging AI/ML software solutions. Telenor also intends to speed up AI model implementation in its operations to address the complexity of advanced 5G use cases and boost customer experience. The two enterprises will conduct testing of AI systems on a live network to assess their effectiveness in reducing power consumption, detecting anomalies and optimizing the capacity of wireless communications channels.

The combined expertise of the two organizations is expected to boost monetization opportunities for communications service providers through efficient energy utilization and enhanced security with robust AI systems. The advancements in network operations are anticipated to bring substantial business advantages for the network operators by expediting digitalization across their respective markets.

With the emergence of the smartphone market and the subsequent usage of mobile broadband, user demand for coverage speed and quality has increased exponentially. To maintain performance with increased traffic, there is a consistent need for network tuning and optimization. Ericsson is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity. The company is reportedly the world’s largest supplier of LTE technology with a significant market share and has established a large number of LTE networks worldwide.

ERIC focuses on 5G system development and has undertaken many notable endeavors to position itself as a market leader. It believes that the standardization of 5G is the cornerstone for digitizing industries and broadband. Ericsson expects mainstream 4G offerings to give way to 5G technology in the future. It currently has 157 live 5G networks across the globe, spanning 66 countries.

The stock has lost 25.3% in the past year compared with the industry’s decline of 7.2%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

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

Stocks to Consider

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Arista Networks, Inc. ANET, carrying a Zacks Rank #2 (Buy), is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista delivered an earnings surprise of 12%, on average, in the trailing four quarters.

ANET holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is increasingly gaining market traction in 200 and 400-gigabit high-performance switching products and is well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.

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