Ericsson seems to have been in some form of crisis for years now, as the maturity of the 4G market led to a drop-off in networking gear spend, and its varied attempts to diversify away from this channel have yielded limited results. The last year has been characterised by multiple, wholesale changes to the senior management team, which included the promotion of Ericsson lifer Ekudden to the top tech job at the end of May last year.
So, after 24 years at the company, this will be Ekudden’s first MWC as Ericsson CTO. We probably say every year that this will be a critical MWC for Ericsson and, lacking the fixed infrastructure offerings of its competitors, we assume its entire strategy hinges on positioning itself to exploit the 5G era.
Unlike last year, however, Ekudden was keen to stress that, while 5G radio gear is, and always will be, a big deal for Ericsson, the current messaging is all about the big end-to-end infrastructure picture, which includes distributed cloud, general IT, IoT platforms, etc.
As has already been extensively explored, all the cleverness and new opportunities promised by 5G will be impossible to realise without an unprecedented level of cleverness behind the scenes. Such is the level of computation required to process everything and provide the network-level flexibility needed, that things like orchestration, artificial intelligence are as important as the latest whizzy radios.
But having said all that, Ekudden certainly didn’t want to downplay Ericsson’s 5G radio offering, which he considers to be a significant competitive differentiator. In fact he thinks his company will be ahead of the other big network vendors when it comes to speed and quality of 5G NR products to market. One of the reasons for this, we were told, is that Ericsson has been deploying radios that are software upgradable to 5G since 2015.
Ekudden also reckons we’re ahead of schedule when it comes to 5G roll out. Some early outliers have already taken place, but 2019 (rather than 2020) is expected to be the year the ramping starts to significantly gather momentum. In fact Ericsson’s market planning assumes the general decline in global networking spend will slow this year, bottom out next year and spending will start to pick up again from 2020.
These observations tally with Qualcomm’s expectation that the first 5G devices will appear at the beginning of next year (see if you can guess what everyone will be banging on about at CES and MWC 2019). These early devices will be used to showcase the super-duper wireless download speeds that, in the context of 5G, are referred to as enhanced mobile broadband (eMBB).
We asked Ekudden if he thinks that will be the main use-case for early 5G and he said he did, but alongside fixed wireless access (FWA). The business case for FWA will initially be restricted to niche, high ARPU markets, which is probably why the US seems to be ahead of the game in this area. But Ekudden reckons it will become much more commonplace in, say, suburban environments and in the long term could account for as much as 10% of the broadband infrastructure market.
Other than eMBB and FWA, and to complete the acronym set, Ekudden reckons the other area early manifestations of 5G is likely to impact is massive IoT. Apart from NB-IoT radio this will be as much due to the new infrastructure as anything else, with things like network slicing enabling a much more optimal environment for managing zillions of connected devices.
All this feeds into the general consensus that 5G will very much be an evolution (a long term one, you might say), rather than a revolution, and its business benefits will be piecemeal and hard to predict. Operators could do the radio bit first (NSA 5G NR), the IT infrastructure bit first, or all at once, depending on how much of a business case they detect.
Whichever they do Ericsson, of course, wants to be the company they turn to for all their 5G needs. But the days of vendor lock-in and over-bundled, end-to-end solutions are behind us so, to achieve this, Ericsson needs to demonstrate its superiority in every specific component of the mix. That seems to be Ekudden’s biggest challenge ahead if his first MWC as Ericsson CTO.
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Tags: 5G, 5G NR, Ericsson, featured, IOT, MWC 2018