At the 2018 World Mobile Congress, where the buzz around 5G was undeniable, Ericsson’s CEO, Bao Yikang, shared his insights on the future of 5G and its implications for the telecom industry. Let’s dive into what he had to say.
Despite 5G being the highlight of the event, operators are still grappling with how to invest efficiently in this new technology. Bao Yikang pointed out that the telecom sector is facing a dual challenge: stagnant revenue growth and an explosive increase in data traffic. Operators must manage costs while maintaining a high-quality user experience, without allowing expenses to spiral out of control. “In this context, we believe the first practical use case for 5G will be enhanced mobile broadband,†he explained. “This will help operators handle traffic growth without compromising the user experience.â€
For instance, Bao mentioned that a site capable of supporting both 4G and 5G networks costs just one-tenth of what it would take to transmit basic data over gigabytes. This cost efficiency is driving global operators to show increasing interest in 5G. “Ericsson has already started receiving orders for commercial 5G deployments,†he added. “Operators’ interest isn’t driven by specific use cases right now, but rather by the need to manage rising traffic costs effectively.â€
During the Pakistan exhibition, Ericsson launched an initiative titled “5G sits on the ground and doesn’t work as well.†The message was clear: operators need to prepare for the transition from 4G to 5G by upgrading their networks, including virtualization, new core networks, and updated billing systems. Only then can they fully capitalize on the benefits of 5G.
Bao emphasized that Ericsson’s wireless systems are now 5G-ready, allowing operators to upgrade their 4G networks through software updates. “This is a smart and forward-thinking investment for operators, and something they should focus on now,†he said.
While many countries are actively moving toward 5G, Bao believes large-scale deployment won’t begin until 2020. “Europe has too many regulatory uncertainties, making it hard for operators to plan their investments. North East Asia and North America are leading the way, with clearer policies and stronger market demand,†he noted.
According to Ericsson’s research, European operators have yet to secure spectrum licenses, and the cost and timeline for acquiring them remain unclear. As a result, their investment enthusiasm is low. In regions like Africa, Latin America, and parts of Asia outside Northeast Asia, data traffic growth isn’t as rapid, so there’s less urgency for 5G investment. However, in Northeast Asia and North America, where policy and market demand are more defined, operators are showing strong commitment to 5G.
There's no doubt that the 5G era will be highly competitive, but Ericsson is determined to lead the market. Bao Yikang highlighted that the company has been focusing on innovation and delivering the lowest total cost of ownership (TCO) for its customers. This approach helped Ericsson regain some market share in China, even though the 4G market there has reached peak investment.
Looking ahead, Ericsson plans to continue investing heavily in 5G. To date, the company has signed 38 network testing agreements with operators worldwide. More importantly, several commercial contracts have been secured, with products expected to be delivered by year-end. “We are also increasing our efforts in the Chinese market to ensure we provide the most competitive technologies and solutions,†Bao said, noting that Ericsson’s R&D center in China is the largest outside of Sweden.
Regarding Ericsson’s financial performance in 2017, Bao explained that the company underwent strategic restructuring to reduce risks and focus on more profitable areas. While the results were not ideal initially, the company’s cash flow improved significantly throughout the year. “By the end of 2017, our financial position was much stronger than at the beginning of the year,†he said. “It’s not just about the numbers—it’s about real-world performance.â€
Reflecting on the past year, Bao highlighted the importance of customer relationships as a key indicator of the success of Ericsson’s restructuring efforts. “Customers are always our top priority, and financial performance is a natural outcome of providing excellent service,†he concluded.
In summary, Ericsson is preparing for the 5G revolution with a clear strategy focused on innovation, efficiency, and customer satisfaction. With continued investment and a strong presence in key markets, the company aims to lead the next phase of telecom evolution. For more updates, follow eeworld for comprehensive and timely information.
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