Ericsson won’t rely on 5G capex spike

02 OCT 2017

EXCLUSIVE INTERVIEW: Erik Ekudden, Ericsson’s recently appointed CTO, backed industry 5G launch timelines but said the technology will not necessarily lead to a spike in operator capex.

Speaking with Mobile World Live during Mobile World Congress Americas, Ekudden noted the industry is now on the brink of pinning down initial specifications for the new radio system for 5G, work he expects to be mostly completed by December.

Initial standards will clear the way for “pre-commercial system launches and, in some cases, commercial launches” in 2018 and 2019, he explained. However, Ekudden expects more 5G launches to occur in the 2019 to 2020 timeframe: “That’s when we start to see the big ramp up and bigger ecosystem support around the world.”

As for the likes of Ericsson and its rivals enjoying a nice spike in operator spend thanks to these network buildouts, Ekudden noted: “as with any new generation that we roll out, there is an introduction in the network that is both on the capex side as well as on the opex side, in some cases. And no doubt, for 5G as well, there is a rollout phase. And then, of course, there’s more regular upgrades in terms of features and functions that is softer over the coming year.”

But he cautioned early 5G deployments are unlikely to lead to a sudden spike in operator capex simply because investments in the years leading up to 2020 and beyond “will very much be directed to systems that can handle both LTE, 4G, as well as 5G”.

Indeed, 4G technology “is still being improved,” according to Ekudden (he believes current peak 1Gb/s download speeds can be “improved even further”).

“Going forward, there’s a natural combination of the LTE capabilities and the new [5G] radio capabilities. So they will go hand in hand for the foreseeable future. Basically, for a very long time,” Ekudden predicted.

Strategy
Ekudden also offered an update on Ericsson’s new strategic direction. The vendor suffered a number of poor quarters financially and is putting the focus back on its traditional service provider market (scaling back on earlier plans to ramp up growth in the enterprise market. Meanwhile it is also mulling the sale of its media business).

Ekudden said Ericsson’s new approach involves “more focus on the platform, the network part” covering both access and cloud infrastructure elements.

Ericsson’s platform incorporates “all the new technologies”, while an expansion into digital services is “a completely new business area; a unit that will take digital transformation of customers’ networks to the next level”.

The CTO explained Ericsson is also transforming. For example, its managed services business, which runs “about a billion subscriptions” globally, is “undergoing a huge transformation in terms of automation, increasing the efficiency and lower cost of operation”.

Click below to hear more from Ekudden, including his thoughts on the technical challenges posed by producing 5G equipment, and details on the range of products Ericsson demonstrated during the US event last month.

Interview: Ericsson

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Michael Carroll

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