5G deployment starting in 2020
Ericsson (ERIC) will help Switzerland’s leading telecommunications provider, Swisscom, to modernize its network as part of the carrier’s preparation for the deployment of the more advanced 5G network technology (QQQ).
The contract calls for Ericsson to enable Swisscom’s nationwide network for gigabit LTE (long-term evolution) speed starting in 2018. Starting in 2020, Ericsson will begin enabling Swisscom’s nationwide network for 5G (fifth-generation) speeds, according to an announcement posted by Ericsson.
As part of the digital transformation of Swisscom’s network, Ericsson will provide the carrier with network-slicing capabilities designed to address the cost, efficiency, and flexibility requirements of the future telecom sector. In June 2017, Ericsson demonstrated its network-slicing technology to Swisscom before Swisscom signed the contract for network transformation.
Swisscom looking to bolster network capacity and quality
Swisscom is expecting the network transformation to result in increased capacity and ultra-low latency as it seeks a better mobile broadband experience for its customers. Swisscom is Switzerland’s leading telecom provider. It also has a footprint in Italy.
The network renewal contract with Swisscom fits with Ericsson’s strategy of positioning itself to cash in on 5G deployments around the world. Research company TechNavio forecasts that global 5G deployment could enable $9.6 billion in revenue for telecom equipment vendors such as Ericsson, Nokia (NOK), and China-based (MCHI) Huawei.
Telecom operators in markets such as the United States (SPY), Europe (EFA), and Japan (EWJ) have begun preparations for the 5G rollout, and operators such as AT&T (T) and Verizon (VZ) are at various stages of undertaking 5G network trials.
Stimulating networks sales
Ericsson’s networks division, the division that deals in the sale of telecom equipment, recorded a 4.0% YoY (year-over-year) fall in its sales in 3Q17, leading to its overall sales falling 3.0% YoY on an adjusted basis and marking another quarter of falling sales for the unit. The company is looking to a 5G network rollout to stimulate growth in this division.