Faced with Nokia and Huawei, Ericsson wants to take advantage of 5G to make a difference

THURSDAY PRO // A leading player in telecom equipment, Ericsson wants to take advantage of the deployment of 5G to reduce the gap with Huawei, the world leader in the sector. Decryption with Franck Bouétard, CEO of Ericsson France.

With the arrival of 5G, competition has resumed even more vigorously between the world’s top three telecom equipment. At present, the Chinese giant Huawei is leading the dance, controlling nearly 30% of the global telecommunications infrastructure market, ahead of the Nordic companies Ericsson and Nokia, which each hold 15% of the market, according to the Dell’Oro Group research firm.

Among these players, the Swedish group Ericsson has strong ambitions in 5G to reduce the gap with Huawei. “5G is the fastest-deploying communication technology since the birth of humankind”, notes Franck Bouétard, CEO of Ericsson France. According to the latest crooks of the Stockholm-based company, 5G should pass the milestone of one billion subscribers in 2022, three-quarters of them in Asia-Pacific.

Geopolitics of telecoms redrawn by the banishment of Huawei

In this region, several countries have been pioneers in the deployment of 5G, such as South Korea and China, where 60% of the population is covered. But the Chinese market has become more difficult to access for foreign equipment, since Huawei was banned from the United States and heavily restricted in Europe.

Consequently, the Chinese giant as well as ZTE, another local champion, benefits from a national preference to develop in their domestic market. A situation that Franck Bouétard regrets: “We are in the process of crystallizing and separating the world on a technological basis. Competition is one thing, it is through competition that we are forced to create innovation, to reduce our costs… Without competition, you cannot ‘innovate more.’

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Europe a huge delay.

Franck Bouétard, CEO of Ericsson France

Failing to be able to compete on equal terms with Huawei in China, it is in the United States and in Europe, where Nokia is the main rival, that the Swedish intends to do well. But on the Old Continent as in France , barely 10% of the population is covered by 5G. A year after its launch in France, 5G had nearly 3 million users at the end of 2021, when 4G had 66.1 million users in the fourth quarter of 2021, according to figures published by the telecoms regulator in early April.

“Europe has a huge delay. As for France, we are among the first in Europe, but we are the first in the caboose. In France, the situation is not good, we have to speed up. Operators are moving forward but must combine investment in fiber and investment in 5G, at a time when prices are very low”, explains Franck Bouétard. And to add on a more optimistic note: “France is less behind on industrial 5G than it is on the global deployment of 5G at the consumer level.”

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On industrial 5G precisely, a report was submitted to the government at the start of the year to identify the obstacles to its development and make recommendations to redress the situation. And if experiments are to be welcomed, the work to be carried out remains substantial. However, the situation is far from catastrophic in the eyes of the CEO of Ericsson France. “We must not crystallize on the implementation of 5G in industrial areas, we must crystallize on the implementation of mobile networks, starting with 4G to change models, and with a gradual evolution towards the 5G. We can see that it’s starting to take”, he explains. The issue is crucial for French manufacturers since it is a question of switching to industry 4.0, and therefore to connected factories.

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Two major acquisitions to conquer businesses

For companies, it is the deployment of 5G private networks autonomous which will change the game. These 5G networks autonomous are totally independent of 4G, hence their name (the English term “autonomous” means “autonomous”). They will be installed directly within the premises of the players concerned, above all ports and industrial zones. In France, Orange has also selected Ericsson and Nokia for this “real” 5G.

To capitalize on this business clientele, the Swede, who is facing the backlash of the “Ericsson List” investigation, which suspects the group of being at the heart of a corruption scandal, notably signed the largest acquisition of its history in 2021, with the acquisition of Vonage, an American company specializing in cloud communications, for more than 6 billion dollars. A year earlier, Ericsson had also acquired Cradlepoint, another American company specializing this time in wireless networks for businesses, for 1.1 billion dollars.

If these acquisitions should allow the Swedish group to develop its service offer in 5G, the latter is already preparing for the future. In this sense, Ericsson relies in France on a research and development (R&D) center, opened in 2020 in Massy, ​​​​in the Paris region, which is already working on 6G, in addition to 5G, security, artificial intelligence and private networks. To date, this center should reach 300 employees by the end of 2023, compared to 140 at present. Because if 5G is taking center stage at the moment, we must already prepare for the next battle with 6G. And to win it, we will have to continue to innovate.

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