Ericsson is back on track with a new focused business strategy. The networking and telecoms giant is also in the midst of an effort to be the ‘first’ and ‘best’ to roll of 5G around the globe. Helena Norrman, Chief Marketing & Communications Officer and Head of Marketing and Corporate Relations, takes Arabian Business through the company’s plans for the future.
The GCC is vying with others to claim the title to be the first to deploy 5G. Will Ericsson grow its operations in the region as a result?
Ericsson together with its partners has been working with 5G technology for several years in the labs, and last two years we took these technologies into advanced outdoor field trials and now 5G is becoming a reality. We see the GCC as part of the advanced markets and 5G will be deployed in the region soon.
Innovation is happening at a superfast pace, especially with events like Expo 2020. One reason for my visit here is to discuss how 5G will be a catalyst for other innovations to follow.
Are there enough 5G-compatible devices in the market yet?
There are no 5G devices in the market today. The 5G network in the US is a fixed wireless network, it is not mobile and requires modem connection points. These are the only commercially available 5G devices in the market today, and that is definitely the big question because networks are improving at a rapid pace. There are a lot of rumours about when the new devices will be ready. It is not only about 5G smartphones, it is also about the other devices that will come on top of the 5G network.
The Internet of Things will rely on a secure 5G network
The 5G network is supposed to be more secure, so are there any major challenges that you foresee with regard to security?
Cybersecurity is a big topic in general. When the networks become not just a part of communication infrastructure, but you start running more societal and industrial enterprise applications on top of the network, it means you need better security. That puts higher requirements on the network.
Is it Ericsson’s ambition to help an operator be the first to roll out 5G globally?
We work with the majority of large operators in the world. 5G is the biggest thing happening in the industry right now, so it is definitely key to be first and best on 5G. If we look at the markets that are moving earliest, for instance the North American markets, we are partnering with all the big ones.
What would you say about the need to invigorate the industry in a market traditionally catered to by a few suppliers?
We don’t see the competitive situation changing. It has always been dominated by a couple of strong players and we just focus on making sure we are competitive.
Innovation is happening fast here, driven by leading events such as Dubai Expo 2020
What can you share about the status of he ongoing corruption issue in the US?
There have been investigations by the US authorities that go back to 2013 and we have also done extensive internal investigations that have been handed over to the authorities. Even though we cannot say what results the authorities come up with, what we have said is that we have seen gaps in our own performance. We are working very diligently to close all of those gaps. It is a serious situation to be in and we are putting in a lot of priority on making sure it is fixed.
What are your feelings about the global economy in terms of the telecom sector?
The market has been declining for a number of years quite drastically. This year it has been flattening. It is predicted to start growing in the next couple of years on the back of a 5G take up. It is not a huge number but it is a change in the trend.
Has the market situation had an effect on the telecom industry’s development?
The telecom industry has been down for a number of years and is now levelling out. That means that investments have been on lower levels for a couple of years and now it is starting to increase a bit.
Our experience is that consumers and enterprises are quick to embrace new technologies. When new services and experiences are available people want it
Is it the right time for capex investments?
If you are an operator then you want to give the best services to your customers on the most efficient network. You also want to have the potential of new revenue streams, depending on your current network and depending on how much operations you have done in densely populated areas.
So there is definitely a business case for 5G because it can give you more efficiency, a better experience for your customers, and it can open up new revenue streams. We can’t predict what new revenue streams will look like until the networks exist. But we know from experience that innovation happens when the technology is there.
How do you see consumers embracing a new era of communication?
Our experience is that consumers and enterprises are quick to embrace new technologies. When new services and experiences are available people want it. So the growth in data traffic is almost exponential. If it’s there, if it adds value, if it’s a good experience, people will use it.
We can’t predict what new revenue streams will look like until the networks exist. But we know from experience that innovation happens when the technology is there
Over the past year of restructuring, how strong a position is Ericsson in to retain market share?
We have regained a strong market position in the last 18 months. Our new strategy was launched and we we have been working hard to turn around the company. That has paid off in stronger financials and also in higher market share and a stronger position with our customers.
Can Ericsson retain its edge in a changing industry considering the number of staff it has shed?
When we went into the turnaround we wanted to reduce costs drastically. But we also decided to increase our R&D investments to make sure that we are relevant to our customers in the long run.
Plus, the new technology is more efficient. The increased R&D is actually paying off in much higher gross margins. We have made a lot of changes but we have not weakened the company.
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