Ericsson's CEO on 5G, Managed Services & Keeping Subscribers Happy

Dan Jones
11/8/2017
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NEW YORK -- Ericsson Capital Markets Day -- The mantra for Ericsson's new CEO might be best expressed by something he said in our interview on Wednesday morning: "Plan for the worst, hope for the best."

Börje Ekholm sat down with Light Reading and a couple of Swedish journalists for a brief chat in Times Square Wednesday. Ekholm stressed several times that the company is putting forward a "robust plan for 2020," which -- at least in part -- means not overpromising on a turnaround too soon, or hyping technology trends like automation or 5G too heavily.

Not overpromising could be key. Ericsson officials admitted today that the Cisco partnership will not meet the goal set two years ago. The companies had hoped to each generate $1 billion in incremental revenues by 2018. (See Cisco/Ericsson Partnership to Miss $1B Sales Target in 2018.)

More generally, Ericsson executives are forecasting a revenue drop, with the new target being SEK 190 billion to SEK 200 billion ($22.7 billion to $23.9 billion) by 2020. That's compared to sales of SEK 211 billion ($25.2 billion) in the last four quarters. Ericsson is facing a decline in RAN sales, the need to overhaul its digital services business, and the strength of the Swedish currency.

"We can't do much about it," Ekholm said of the Swedish Krona's (SEK) rise.

The CEO says that Ericsson does expect to start to see 5G deployments to start in 2018 and into 2019. "We expect to see some sales, but it will not be significant... We don't know the timing yet." (See Eurobites: Swisscom Goes All Out for Gigabit LTE, 5G.)

Ericsson has started investments in automation, although the CEO didn't split out the totals. He did say that "the R&D of managed services" will be important to Ericsson.

What this means, he continued, is collecting and analyzing data on existing managed networks and using that information to optimize setup and management. One example would be applying lessons from data about issues that subscribers had in setting up a new phone on the network. When running a network with 1 billion subscribers, he noted, "well, we can learn quite a lot from that."

Trying to improve customer experience and deal with user complaints about overcrowded mobile networks could result in mobile operators building out more network capacity, the CEO allowed. "I'm more optimistic on the network market," Ekholm said. "We have not factored it in, but at some point it will happen.

"I'm surprised there are as few complaints from consumers as there are," he continued, "We don't want to plan [for] that. They [operators] could sweat the network for a little bit more."

Ekholm wouldn't elaborate, as he didn't want to give away his customer's plans.

Light Reading also asked if there would be any more changes at the top, as several major management changes were announced at Ericsson yesterday. "I'm very comfortable with the team we have now," Ekholm said. (See Eurobites: Ekholm Continues Management Purge at Ericsson.)

— Dan Jones, Mobile Editor, Light Reading

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