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AT&T Inc. (T) has intensified its 5G focus by joining Ericsson (ERIC) 5G Startup Program to spearhead innovation and unlock the full potential of 5G services for consumers. The collaboration aims to offer value-added services to bring new immersive experiences to users, utilizing AR and VR technology across the spectrum.

Ericsson 5G Startup Program is a worldwide network of more than 40 5G startup firms that seek to drive 5G innovation by exploring and identifying novel ideas spanning multiple consumer segments. It offers a unique opportunity to tap the extensive research and analytical data from Ericsson ConsumerLab and leverage key actionable insights to serve consumers better. The program seeks to enable communication service providers (CSPs) like AT&T to fine-tune their go-to-market strategy to address about $3.7 trillion worth of estimated global 5G consumer market by 2030, according to an Ericsson research report.

By joining this program, AT&T will gain access to a curated list of firms that develop scalable services, devices and applications over 5G. This, in turn, will likely facilitate it to differentiate its 5G offering and gain a competitive advantage by bundling relevant use cases and tariff features to drive higher 5G consumer adoption, thereby generating incremental revenues. The program will also offer an opportunity to other CSPs across the world to gain rich experience by tapping the technical and strategic know-how for improved scalability and replicate their success by integrating off-the-shelf 5G B2C solutions in their own offerings.  

AT&T is focusing on core wireless businesses to maintain its leading market position as the industry benefits from a healthy uptick in demand amid the lingering coronavirus scare. While optimizing operations, the company aims to increase efficiencies to lower operating costs and focus on 5G and fiber-based broadband connectivity. Management expects postpaid phone average revenue per user to stabilize in 2022 with higher international roaming calls and an uptrend in premium Unlimited plans.

AT&T is increasingly focusing on its customer-centric business model to attract and retain customers for a lower churn rate. The company aims to profitably increase its postpaid subscriber base leveraging its network quality and market penetration capabilities. As the first carrier in the industry, AT&T has unveiled its 5G policy framework that hinges on three pillars — mobile 5G, fixed wireless and edge computing.

For a seamless transition among Wi-Fi, LTE and 5G services, AT&T intends to deploy a standards-based nationwide mobile 5G network. Its 5G service entails the utilization of millimeter-wave spectrum for deployment in dense pockets, while in suburban and rural areas, it intends to deploy 5G on mid- and low-band spectrum holdings. It believes that as the 5G ecosystem evolves, customers can experience significant enhancements in coverage, speeds and devices. An integrated fiber expansion strategy is expected to improve the broadband connectivity for both enterprise and consumer markets, while steady 5G deployments are likely to boost end-user experience.

Shares of T have lost 18.6% in the past year compared with the industry’s decline of 7.1%. Nevertheless, we remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock.

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Clearfield, Inc. (CLFD) , sporting a Zacks Rank #1 (Strong Buy) is a solid pick for investors. 

Clearfield delivered an earnings surprise of 50.7%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 102.7% since February 2021. Over the past year, Clearfield has gained a solid 85.3%.

Qualcomm Incorporated (QCOM) , carrying a Zacks Rank #2 (Buy) is another key pick. It has a long-term earnings growth expectation of 16.1% and delivered an earnings surprise of 12.2%, on average, in the trailing four quarters.

Earnings estimates for the current year for the stock have moved up 43.1% over the past year, while that for the next fiscal is up 48.6%. Qualcomm is likely to benefit in the long run from solid 5G traction and a surge in demand for essential products that are the building blocks of digital transformation in the cloud economy.