IBM Unveils 5G Software, Announces Deals with Verizon, Telefonica

IBM (IBM) used the 2021 Mobile World Congress event to launch its new automation software targeting telecom operators in the 5G era. It went on to announce deals with Verizon (VZ) and Telefonica (TEF).

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The IBM Cloud Pak for Network Automation software is designed to help operators deliver the promise of 5G. These include reduced costs, quick delivery of innovative services, and zero-touch operations.

According to IBM, the software will enable operators to scale new services in a matter of days instead of months. The company notes that many operators are shifting to software-defined networks to capture 5G and edge computing value. However, challenges such as limited automation are preventing them from rolling out new services fast enough.

“To help address these growing demands, IBM’s new Cloud Pak for Network Automation software uses AI-powered automation to enable zero-touch provisioning of new services which can facilitate the simplification of the management of network functions from the core to the edge,” said Andrew Coward, IBM’s Software Defined Networking general manager.

Alongside the software announcement, Verizon has selected IBM and its subsidiary Red Hat (RHT) to provide a hybrid cloud platform for its 5G network. It also said Telefonica will use its cloud platform to build new solutions for enterprise customers. (See IBM stock chart on TipRanks).

Bank of America Securities analyst Wamsi Mohan recently reiterated a Buy rating with a price target of $175 on IBM stock. Mohan’s price target implies 19.18% upside potential. The analyst believes IBM is better-placed with Red Hat as a subsidiary.

“RHT maintains a neutral stance, and has partnerships with hyperscalers such as Microsoft and Amazon, as well as with 127 regional cloud providers,” noted Mohan.

Consensus among analysts is a Moderate Buy based on 4 Buys, 3 Holds, and 1 Sell. The average IBM analyst price target of $151.75 implies 3.34% upside potential to current levels.

IBM scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.