Ericsson backs 5G to deliver further growth

Ericsson EVP and head of Business Area Networks Fredrik Jejdling offered a cautiously optimistic outlook for the vendor’s business in Q4 and beyond, as the potential for recession in key markets muddies the waters of continued progress in 5G.

The executive told Mobile World Live growth in North America was beginning to top out as the big three operators in the US reach an advanced stage in their respective 5G rollouts. The market has been a key driver for Ericsson in recent years, but Jejdling noted the vendor continued to rack up wins in other key markets, including recent contracts in India, a market he said held great potential “because of the sheer size”.

A lack of fixed line copper or FTTH infrastructure in India makes it ripe for fixed wireless access (FWA) networks alongside pure-play mobile 5G as a means of providing broadband connectivity.

Another relevant aspect in India is the huge demand for mobile services: Jejdling noted the Covid-19 (coronavirus) pandemic had fuelled use of wireless technologies to access information and healthcare during the crisis, all of which had been handled on 4G networks.

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Progress during Q3 is testament to Ericsson’s continued investment into its technology, Jejdling argued, noting alternative approaches to infrastructure were yet to rival the cost-performance benefits provided by the vendor’s “quality integrated solutions”.

He did not rule out a shift in strategy moving forward, but explained this would be driven by the business case. “It’s my job to understand what kind of technologies at a certain point in time can provide the best value for our customers. It sounds very trivial, but that’s in reality what it is.”

“Ultimately our customers are sophisticated buyers and we work very closely with them on this”.

In its Q3 earnings statement, CEO Borje Ekholm fleshed out Jejdling’s view, noting Ericsson’s share of the global RAN market, excluding mainland China, stood at 39 per cent.

Ekholm predicted customer wins beyond North America would “lead to overall growth in 2023”, noting there remains a large opportunity to deliver mid-band 5G infrastructure given less than 25 per cent of global LTE nodes have been upgraded to the spectrum.

The vendor’s net income declined 7 per cent year-on-year to SEK5.4 billion ($482.4 million), on revenue of SEK68 billion, up 21 per cent.