The stock of Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) closed at $6.54 losing 0.76% in yesterday’s trading session. Most of the incumbent telecom infrastructure-vendors agree on the point things are getting tough with time. The business dynamics keep shifting but that is something any risk taking company needs to get used to in order to thrive in a market characterized with fierce competition.
These vendors believe that the tough times shouldn’t be seen as barriers but rather as stepping stones to even better things. Investments must be made from time to time since they are the ones that determine the future of any company. Ericsson has today proceeded to make the announcement about the $370 million investment that it is making in 5G and other investments.
Sources indicate that the company signed agreements with AB Svensk Exportkredit for $150 million and with the Nordic Investment Bank (NIB) for $220 million. It is a major risk that the company is making but it continues to exude confidence that the deals are for its own best interest.
Asides from strengthening the company’s financial flexibility and its balance sheet, the funds will play significant role helping offer support to R&D activities whose main motive is develop 5G much more as well as a wide range of other mobile innovations.
Ericsson chief technology officer, Erik Ekudden opined, “As part of our focused strategy we are increasing our investments to secure technology leadership in 5G, IoT and digital services, Already now we have 38 operators engaged with us on developing and preparing for 5G networks. This is more than any other company.”
The latest announcement by Ericsson pulls along in a matter of days from the time the 3GPP ratified the Non-Standalone (NSA) 5G New Radio (NR) specifications for what is deemed to be the central basis of the various commercial 5G products. If everything goes according to plan, it is expected that by June next year the Standalone (SA) version might just be unleashed.
For quite some time Ericsson has been a part of a team that has paid much focus in trying to demonstrate the 5G NR interoperability with with several operators.