‘5G to accelerate operators’ revenue by over 30%’

Fredrik Jejdling, Executive Vice President, Head of Business Area Networks, Ericsson, supervises 5G commercialization across Ericsson, including the conduct of 5G trials with operators. In an interview with Voice&Data, he talks about the 5G opportunities and why 5G deployment is different from 4G or any other technologies.

Voice&Data: How do you see the 5G deployment taking place in the world? If you can throw some light on the kind of contribution that Ericsson is making…

Fredrik Jejdling: When I started this job a year back, 5G had not reached the point where it is today. It has accelerated a lot, but at the same time in a polarized way. We have been working very closely with the American operators around 5G. That is largely driven by fixed wireless access uses case and millimeter waves, very high spectrum frequency. That is one side of it.

Also, in the last one year, China and the Eastern part of the globe have accelerated their 5G plans. So, we are looking at trials, pre-launches, and launches in the US as well as in China, Korea, Japan, and some other markets towards the end of this year.

There are a couple of things around 5G and first, we should understand that you can look at 5G in two different cases. First, it was developed to connect things, which is the original use case of 5G. At the same time, we also realized that the mobile broadband evolution and growth in data traffic in the networks is doubling every year, and then you need more spectrum. So, 5G will enable carrying more mobile broadband traffic which is a necessity.

As a matter of fact, 4G frequencies are highly utilized. So, 5G offers an opportunity to evolve and facilitate mobile broadband at a better quality. Then there is critical and massive IOT as well. So, that is a little bit on the way we see 5G, and I think that if you look at our mobility report, which pegs the network growth to be eight times by 2023. That means that we as a vendor need to realize that we have to say to our customers that we can deliver the cost of gigabytes that is 8-10 times lower compared to what it is today.

We would like to highlight, that there is a medium to long term connecting use case of 5G, which we think will drive additional revenue for the existing operators. Also, there could be 36% of growth in revenue on the basis of internet of things. However, there is a lot of benefit of adding the extra spectrum to the mobile broadband customer that we are used to today.

We think that the traffic on mobile broadband is going to grow by eight times in India by 2023. It’s doubling every year right now. Through 5G, we have the opportunity to offer a cost-per-gigabyte to the operators/customers that is 8-10 times lower than today. So, there is a different dynamic that is coming to play here due to the growth of the consumer mobile usage as well as the opportunity to critical and massive IoT by 2023.

Voice&Data: You mentioned about operators’ revenue getting accelerated because of 5G. But what type of traction do you see among operators, are they ready to invest in future technologies?

Fredrik Jejdling:
It depends on the state of the specific operators. I would say that some operators look at it as an opportunity, it is optional for their future revenue. I have to admit that when I came, 4G use case was quite easy to understand and it was around Android and iPhone performance. That is why we innovated around 4G to start with.

5G may not have such defined use cases, however the potential of 5G is higher for operators. Although the use cases, particularly for IoT might be a bit difficult. So, different operators take different perspectives. I would say that some of them are very bullish about creating an option for themselves to be in the connected IoT kind of space, which 5G will facilitate.
Some operators are more cautious and want to harvest more from 4G.

We are rather sure that when you buy a hardware today from our company, that is ready for 5G. We think that it is an important aspect of things because we think we want to work with 4G, which is an excellent technology.
We want to make sure that we can evolve that, and as and when the 5G NR standards come into the network, our hardware, with the software upgrade capability carries 5G traffic. That is largely linked to the effect that we see in the market. There is not a whole lot of big investments to be done upfront. It is rather an evolution of 4G into 5G, and 4G and 5G will live concurrently for as long as I can think.

Voice&Data: Talking about standardization, a lot of global standardization forums and industry bodies are aligning the technology and certification activities. I know that Ericsson is playing a key role in all these. If you can just specify some of the highlights of the standardization thing, how do you see the standardization gradually evolving?

Fredrik Jejdling : I think that from standardization perspective, it is of course a fundamental and important part. We are the biggest contributor to the 3GPP standardization body. If you know 3GPP is the standardization body for GSM, 3G, 4G, 5G etc. So, we work very actively for standardization to make sure that NR becomes standard for 5G like LTE was the standard for 4G. That has a big impact on our ability to market and sell our products in the future.

There are elements of additional standardization bodies around mobility coming up. We support 3GPP because we believe that these standards that we developed together facilitated communication for billions of people in a cost-efficient way.

We believe that if we fragment the standardization community, you are not going to get the scale which will ultimately benefit the hundreds of millions of people in India to be connected. We are working with other bodies also to understand what they want to do, and if we understand that there are certain elements linked to some sort of historical IP standardization practice, we want to make sure that it is into the global standardization body, 3GPP as well.

Voice&Data: What is your outlook for the India market when it comes to various technologies like IoT, 5G etc.?

Fredrik Jejdling : You can see Idea, Vodafone, Jio, Bharti Airtel have done a phenomenal job of bringing out communication to almost all Indians at this stage. What we see is that IT application in India is much faster than many other markets. The growth of mobile network that we see in India now, we see the Indian market as very important for us, but we also see it as a market which will drive the development of mobility even more. You take the massive IoT applications that you can download over the 4G networks. 5G will offer very cost-efficient way of manufacturing, communication, and so on.

So, I think that India has always been a place of innovative solutions for me. It has driven the industry to become extremely cost efficient and effective, and I think it will continue to happen.

Voice&Data: How do you see the operators transitioning from 4G to 5G. Do you have some advice for them?

Fredrik Jejdling : I think operators are fully capable of understanding their own business case. However, there are few things that we need to consider when 5G comes to India. Firstly, the introduction of 5G spectrum will be an important facilitator in the transition from 4G to 5G, and the ability to re-farm certain spectrums into certain areas will also be important.

I feel that we need to approach the transition from 4G to 5G one step at a time. 4G already offers a lot of services that 5G is capable of offering and both global and Indian operators will see a gradual evolution that will encompass evolving the existing hardware.

I would also like to stress on the importance of collaboration between different industry stakeholders to identify the use cases of 5G, once the spectrum and technology are in place. Between the operators and regulatory bodies like TRAI, we need to make sure that the environment is conducive for the growth of the telecom sector in India. If we look at the global use cases for 5G and take cues from there, I am sure that we can create an environment that proves effective and efficient for India.

Voice&Data: Where do you see 2018 heading for Ericsson from technology point of view? What developments will you see this year?

Fredrik Jejdling : Ericsson went through a transformation and changed its strategy in 2017, where we focused on three areas- Networks, to support a continued global rollout of 4G and establishing a leading position in 5G. The second part is Digital Services and the third part is Managed services, where India plays a big role.

In these three areas, we will be increasing investment in technology and provide cost efficient solutions for our customers to make sure that we stay a technology leader in the space and retain our market leadership. We will continue to execute our focus strategy during 2018.

From the technology perspective, this will be the year of introducing 5G, in several markets. It will also be the year when we work on high capacity solutions for both 4G and 5G, which is called massive MIMO.

We will also introduce dual band radios offering wider spectrum to the operators. So, I think that it will be a critical year for new technologies in the market. From Ericsson’s perspective, we will continue to execute our focus strategy that we communicated in 2017.

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