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LM Ericsson Telephone Company (NASDAQ:ERIC) is in a great situation to take advantage of the technological changes in the wireless industry. Many wireless carriers are in the middle of migrating from 3G to 4G. This will put Ericsson in the best position to take advantage of this strong growth.

It's expected that 1.5 million LTE base stations will be needed by carriers over the next 4 years. Ericsson will be the main beneficiary of this surge in demand, since it is the current market leader. Asia-Pacific is also expected to ramp up plans for LTE expansion that is expected to continue till 2015.

Here are some highlights I like about the Ericsson story:

  • 60% of the worlds population still remains to be covered by WCDMA, HSPA, CDMA, and mobile broadband. There is still huge opportunity as mobile broadband demand grows.
  • Second quarter sales saw 14% growth, and if you adjust for currency and take away acquisition costs, Ericsson saw growth of 27% for the quarter.
  • Networks division saw sales increase 31% year-over-year despite having to deal with a strong Swedish currency. Due to strong growth in the mobile broadband segment, Ericsson should see more growth coming from Latin America, Northern Europe and Central Asia.

I'm bullish on Ericsson as I expect the company to stay one of the top providers of network equipment. The 4G trend is here to stay, and carriers will continue to rush to meet the increase in demand as more mobile devices continue to hit the market. This trend will spell big profits for Ericsson going forward.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ERIC over the next 72 hours.

Source: LM Ericsson: A 4G LTE Growth Machine