Telefonica, S.A. TEF achieved a milestone with the deployment of 5G technology in Spain. The 5G networks are likely to provide almost 75% of the population with advanced mobile Internet services, streamlining the entire communications infrastructure of the country by 2020. As telecom operators start rolling out high-speed connectivity for consumers and businesses, the latest move underscores Telefonica’s dedicated efforts to emerge as a forerunner in the European telecommunications market, given its technology prowess coupled with accelerated pace of innovation.
Telefonica’s move to activate 5G connection is considered as a substantial step to lead Spain in the race for the Fourth Industrial Revolution. The fifth-generation network will enable vertical industries to introduce new businesses and promote direct and indirect cross-cutting benefits to primary sectors such as healthcare, tourism and automotive. It will also promote digitization of small and mid-size enterprises with this much-awaited initiative. Apart from addressing the needs of verticals, the 5G connection integrates existing and new radio technologies for enhanced performance, reduced costs and new paradigm for network evolution with scalable networks.
Interestingly, Telefonica was one of the early adopters of 5G technology. The company intends to ramp up 5G RAN growth across global markets between 2022 and 2025. The 5G deployment will take place in different phases. As part of the first phase, the network operator will integrate non-standalone 5G with Dynamic Spectrum Sharing technology, thereby enabling the dual usage of 4G and 5G networks. The deployment, which will take place in concurrence with the closure of traditional networks, will leverage 3.5 GHz and mid-band frequencies to launch new network capabilities with the pervasive use of fiber optics. It is expected that the existing copper network will be substituted by a fiber network by 2025, which will eventually help Telefonica effectively manage its 5G investments.
Telefonica provides a comprehensive suite of service platforms for fast go-to-market launches. Its IoT connectivity platform has been specifically designed to address dynamic business requirements and enable a cost-effective solution to improve business productivity. Over the past years, it has invested heavily in the deployment and transformation of its network to provide seamless connectivity with enhanced capacity, speed, coverage and security. With its operations across 17 countries, the Spanish telecom company is capitalizing on the opportunities in the digital world through several growth strategies to enhance long-term prospects, while experiencing healthy traction in the smartphone market.
Telefonica currently has a Zacks Rank #3 (Hold). The company’s shares have plunged 44.5% compared with the industry’s decline of 17.6% in the past year.
Some better-ranked stocks in the broader industry are Deutsche Telekom AG DTEGY, Shenandoah Telecommunications Company SHEN and MYR Group Inc. MYRG, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Deutsche Telekom has a long-term earnings growth expectation of 10%.
Shenandoah has a trailing four-quarter earnings surprise of 10.2%, on average.
MYR Group has a trailing four-quarter earnings surprise of 33.1%, on average.
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