Ericsson will be able to firmly focus on its research and development, strengthen relationships with third-parties, streamline relevant business practices and ensure wireline access product integration to provide AT&T with the best and most innovative solutions available.

Already having approved Ericsson's GPON Fiber to the Home (FTTH) solution for general deployment, AT&T will now start integrating Ericsson's DSL portfolio for Fiber to the Node (FTTN) and IP DSLAM solutions to support its offerings like IPTV, High Speed Internet and VoIP over an all IP network infrastructure.

As the technology and market leader in GSM-based equipment, Ericsson stands to benefit from the continued growth of the wireless industry, especially in emerging markets. Of the 4.16 billion wireless subscribers worldwide, about 3.84 billion use GSM-based networks and with global wireless penetration of around 50%, subscriber growth is expected to remain fairly strong.

Having established partnerships with local firms and set up R&D centers in numerous locations, Ericsson is well positioned to win additional network expansion contracts in Asia over the next couple of years. The company has also been winning more than its share of 3G contracts, including one to provide High Speed Downlink Packet Access (HSDPA) technology to Cingular Wireless. HSDPA is an improvement on the basic W-CDMA technology offering faster data rates (similar to fixed broadband).

Ericsson is the world's leading provider of technology and services to telecom operators. As the leader in 2G, 3G and 4G mobile technologies, the company provides support for networks to over 1 billion subscribers and has a dominant position in managed services. Its portfolio comprises mobile and fixed network infrastructure, telecom services, software, broadband and multimedia solutions for operators, enterprises and the media industry. Alcatel-Lucent (ALU) is a major competitor. We currently have a Neutral recommendation on ERIC.