Ericsson Testing 5G Use Cases, CFO Says

Ericsson is working on 5G use cases with a slew of customers and partners centered on how machines will communicate and how cities and companies will use the network, the vendor's chief financial officer says.

In an interview with Light Reading shortly after the publication of Ericsson AB (Nasdaq: ERIC)'s fourth-quarter earnings, CFO Jan Frykhammar touched on growth projections for the vendor's "target areas" of IP networks, cloud-related systems, OSS and BSS, TV and media platforms and several selected industry verticals, and also outlined the vendor's work on the developing 5G standard. (See Ericsson Feels US Capex Squeeze in Q4 and The Many Faces of 5G .)

"I think when it comes to 5G, in general, we are in this phase where we get together with customers and other partners, and we work on different use cases, as we call them," Frykhammar says, adding that there are more use cases for 5G than there were for 3G or 4G. "3G and 4G were more related to peer-to-peer communications, whether data or voice. When it comes to 5G, it's more how machines will communicate and how companies and cities will take advantage of the networks."

Exploring these use cases involves branching outside of network operators to understand what performance criteria businesses have for networks. For most, latency has trumped speeds as the top priority, Frykhammar says. He adds that there is more standardization work needed on 5G and a lot of it needs to focus on the network core, not just the radio network. (See Ericsson Sets Its Sights Outside Telecom.)

Ericsson has teamed up with IBM Corp. (NYSE: IBM) on building out the antenna technology that will eventually be part of 5G. It has also been running pre-5G tests in Stockholm, but expects 5G technology to start being deployed in 2020, a timeline Frykhammar echoed on Tuesday. (See Ericsson & IBM: The Many Phases of 5G and Ericsson CTO: 5G Needs Broad Brush.)

"In this early phase of new technology, you have to work with use cases," Frykhammar says. "You have to understand how the networks are going to be used, and then you convert those use cases into specifications on the different interfaces, whether radio interfaces or demands on the handsets. We are in the phase of working with use cases and doing our own internal research."

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

5G is only one focus area of many for the vendor, which struggled in the fourth quarter as the US operators spent less on their networks. While Ericsson boosted its sales from its aforementioned target areas -- IP networks, cloud, OSS/BSS, TV and media platforms -- by 10% in 2014, they still represented less than 15% of its total sales in 2014. Frykhammar is optimistic that development of these markets will see more than 10% growth going forward, but whether that happens in 2015 or 2016 doesn't necessarily matter to him, he says.

"The important thing is we start to get traction and build customer references," Frykhammar says.

— Sarah Thomas, Editorial Operations Director, Light Reading