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Ericsson Continues to Position for 5G with a New Entel Deal

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Preparing Entel’s network for 5G technology

Europe-based (EFA) telecommunications equipment vendor Ericsson (ERIC) is helping Entel prepare its network for 5G (fifth-generation) deployment. Entel is a Chilean telecom operator that serves about 9.0 million wireless subscribers in the country. It also has a presence in Peru, where it counts roughly 6.0 million wireless customers.

In preparing Entel’s network for 5G network technology, Ericsson will deploy its LTE (long-term evolution) FDD (frequency division duplex) and LTE TDD (time division duplex) Massive MIMO (multiple-input, multiple-output) network technologies (QQQ). The deployment of these technologies is expected to enable Entel to improve its network competitiveness and unlock additional revenue streams.

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Pressure on networks units as 4G deployment peaks

Ericsson and Nokia (NOK), two leading telecom equipment vendors, have endured weak sales in their networks units recently. The pressure in the networks business has come from a slowdown in the uptake of 4G (fourth-generation) equipment as the deployment of 4G networks has peaked in many key markets.

These telecom equipment vendors are now positioning themselves to cash in on 5G network deployment, which promises a huge revenue opportunity.

Over $9.0 billion in 5G equipment market

Technology research and advisory firm TechNavio expects the global 5G equipment market to grow at an average annual rate of more than 32% between 2016 and 2020. In this scenario, the 5G equipment market would be worth $9.6 billion by 2020, as we can see illustrated in the chart above.

In their positioning for 5G deployment, Ericsson and Nokia are collaborating with network operators such as AT&T (T) and Verizon (VZ) in the United States (SPY) and other operators around the world for 5G network trials or pilot deployments.

The latest contract between Ericsson and Entel built on the partnership that the companies have forged for many years.

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