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Ericsson Unveils Mobile Money Mate

Ray Le Maistre
2/27/2012

BARCELONA -- Mobile World Congress 2012 -- Ericsson AB (Nasdaq: ERIC) CEO Hans Vestberg trotted out a key new "strategic alliance," an impressive array of statistics and updated product developments here in Barcelona Monday morning, but failed to convince in the key area of carrier cloud capabilities.

The alliance is with global money transfer specialist Western Union, and is designed to help both become invaluable partners to mobile operators wanting to offer mobile commerce services. Such an announcement was expected, as Ericsson just announced a greater focus on its mobile commerce activities when it unveiled its Business Unit Support System (BUSS) last week and also announced pan-African service provider MTN Group Ltd. as the first operator to adopt Ericsson's Converged wallet capabilities. (See Ericsson Boards Its Own BUSS.)

Western Union, which already works directly with a number of mobile operators in Africa, Asia/Pacific and North America, is integrating its Mobile Money Transfer Network with Ericsson's M-Commerce applications to enable carriers to include Western Union money transfers in their service offerings. (See Ericsson Teams With Western Union.)

Western Union looks to be a strong (though non-exclusive) partner for Ericsson as it's already operational in 200 countries -- "Even more than us!" exclaimed Ericsson's Vestberg in an interview with Light Reading -- and has 500,000 service outlets. Add that reach to the claim that Ericsson's (mostly pre-paid) billing platforms are already connected to 1.6 billion mobile users worldwide, with the potential for those users to adopt mobile wallet services, and the combination of the two companies is potentially powerful.

Western Union's CMO Diane Scott also noted here today that there are 2 billion people in the world with no access currently to financial services: With mobile services penetrating rural areas of developing markets, the new partners also see greenfield growth potential.

Small cells and numbers games
Aside from that new partnership, Vestberg also trotted out some statistics to cement its claims to still be the leading mobile networks player.

Ericsson increased its share of the mobile networks infrastructure market (including core and backhaul as well as radio access network equipment) in 2011 to 38 percent from 32 percent the previous year, according to the Swedish vendor's own estimates. (Which rivals lost out is another matter...)

And along with all other major mobile networks vendors, Ericsson is pushing its small cell portfolio (beyond its planned acquisition of BelAir) and claiming "leadership" in the LTE market. Vestberg noted that currently about 325 million end users are connected to networks that offer commercial LTE services, of which 215 million are connected to networks where Ericsson is a supplier, giving it the "biggest market share," stated the CEO. (See Ericsson Shows Off Pico Base Station and Ericsson Adds Wi-Fi With BelAir Buy .)

Cloud questions
Vestberg also talked about Ericsson's cloud systems efforts, though didn't dive into details during his morning presentation. He noted that the content delivery cloud service partnership with Akamai Technologies Inc. (Nasdaq: AKAM) announced a year ago had yielded a customer in the form of Indonesia's PT Telekomunikasi Selular (Telkomsel) and that Ericsson had just unveiled its "Network-enabled Cloud" concept. (See Ericsson Launches a Cloud.)

That "concept" appears rather wishy-washy and lacking in specific capabilities or developments, especially when compared with some rivals such as Alcatel-Lucent (NYSE: ALU) and Cisco Systems Inc. (Nasdaq: CSCO). (See Cisco Passes LR's Independent Cloud Services Test, Cisco Opens Up the CloudVerse and Analyst: AlcaLu Could Have a Cloud Hit.)

But at least one industry analyst believes Ericsson is making good progress.

"There was so much focus on the cloud last year, so not much was said about it this morning. Ericsson has a good story to tell: The ship is steady and on course following key strategic decisions made last year," states CCS Insight research analyst Paolo Pescatore. "This was underlined by repeated comments to the network society ... and if you recall the tie-up with Akamai, there you have the leaders in network working with the leaders in cloud CDN [content delivery network], so it is a strong partnership."

— Ray Le Maistre, International Managing Editor, Light Reading

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