Ericsson Hypes 5G After Telcos Slam 5G Hype

Ericsson obviously didn't get an invite to Huawei's recent Mobile Broadband Forum event in London. If it had been able to sneak in through the back door, it would have heard senior telco executives describing 5G hype as "bullshit" and imploring the industry to focus on the technology's efficiency benefits for operators rather than the futuristic services. (See Vodafone CTO: 5G Is Overhyped & It's Mainly About Cost and Let's Talk About 5G Efficiency, Not Wacky Services.)

Instead, the Swedish vendor has compiled another one of its regular mobility reports that pays lip service to operator efficiency while foregrounding the famous "use cases." One for "augmented reality-assisted maintenance and repair in the manufacturing industry" gets a mention in the third sentence. (See Ericsson Makes 5G Predictions in Mobility Report.)

By contrast, the words "efficiency" or "efficiently" turn up only four times in the main text of the 32-page report: once in discussing the spectral efficiency of not 4G but 5G technology; twice in describing efficiency benefits for manufacturers using "augmented reality-assisted maintenance and repair;" and only once to note the network efficiency improvements that should come with massive MIMO, a 5G technology.

In fairness to Ericsson AB (Nasdaq: ERIC), the mobility report has always been largely about forecasting rates of technology adoption. Nor is it likely that all telco executives are demanding more discussion of 5G's efficiency benefits. But the one who did so in a very publicized way, during a keynote speech at Huawei's event, happened to be Johan Wibergh. Not only is he chief technology officer of Vodafone Group plc (NYSE: VOD), one of Ericsson's biggest customers, but he also used to work for Ericsson in an executive vice president role. He is probably worth listening to.

Give Me More Efficiency
Johan Wibergh, Vodafone's chief technology officer, complains about 5G hype at a recent Huawei event in London.
Johan Wibergh, Vodafone's chief technology officer, complains about 5G hype at a recent Huawei event in London.

Just because Ericsson's latest mobility report shows little evidence of that does not mean it is ignoring his concerns. Yet churning out hockey-stick growth projections while telco executives continue to fret about technology readiness (and purpose) is perhaps inadvisable when your business is in a rut. Germany's Deutsche Telekom AG (NYSE: DT), it has recently become apparent, is far from happy about progress on 5G standardization outside the new radio area. Even more than Huawei Technologies Co. Ltd. and Nokia Corp. (NYSE: NOK), Ericsson needs to demonstrate it is paying close attention. (See DT Is Not Going Radio Gaga About 5G.)

Unlike either Huawei or Nokia, Ericsson now caters exclusively to telcos, and so its mobility report is presumably meant to be read by them. One way of engaging worried operators would be to use this oddly high-profile publication to address some of their concerns regarding efficiency benefits and non-radio progress. Naysayers would likely dismiss any positive statements as vendor PR, but the prognosticating about trends can hardly be viewed objectively, either, when it comes from the industry's second-biggest supplier.

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kq4ym 12/11/2017 | 1:08:45 PM
Re: Damned if you do ... I would suppose "sour grapes" is only to be expected when talking about competition and where we feel we're behind the curve, but besides getting a bit of press, it's not always good business to let those type of comments flow too freely I would think
Principa74412 11/30/2017 | 4:54:00 AM
NR performance and efficiency is much better than LTE I simply like to specify some facts for the arguments / points the author wrote. NR has 12-20% for FDD and 10-35% for TDD higher peak spectral efficiency than LTE and full utilisation requires NR optimised radio. Up to 3x cell edge rates at low load on a 2/4Tx baseline. E.g. 97 vs 35 NR has increased energy efficiency reaching 85% power savings compared to 20% for LTE NR will support 40Mhz carrier where for carrier aggregation scenario will have high efficiency than LTE Any comments are most welcome Thanks Peter ke
SeniorTe76617 11/29/2017 | 1:16:47 PM
Who ever runs fast wins the race Ericsson is following perfect strategy.

One should not forget huaweii did something similar demonstrating 4G speeds in a magelev train, while hardly people use 4G speeds today what huaweii demonstrated. So whats wrong with Ericsson doing similar ?

5G gives advantage at the operator level first time where new NFV/etc are part of standards itself. So far in 4G it was in imaginations than being part of standards.

Its also possible lot of operators or device manufacturers have not recovered their investments in 4G, so reluctance to switch is natural but inevitable.

What does a end-user gain in using Windows10 over Windows7 ? Didn't we migrate ?

4G has not fully picked up especially VoLTE, so it makes every sense for 3G->5G migration directly. 

Irrespective of what a CEO or CTO has objection to, market will be bent to switch. All it needs is one Tier-1 operator to switch others will follow for fear of competition of being left behind.

Last but not lease 5G even if its relevant few years later than immediate, is natural culmination of diverse technologies tech world is talking about (NFV/IoT/driver less cars and other BS).




iainmorris 11/28/2017 | 3:11:59 PM
Re: Damned if you do ... It's happy with progress on 5G new radio standardization. It just doesn't think it's a massive game changer. And it's evidently not happy about the progress in some other areas.
mendyk 11/28/2017 | 2:53:00 PM
Re: Damned if you do ... So on the one hand, DT is happy (or as happy as DT can get) with the progress made in 5G radio standardization, and on the other hand it doesn't think the radio part is all that exciting? I wonder if part of the problem here is that some telcos are feeling the heat from out-of-market operators (i.e., those in Asia) that have set very ambitious timetables for 5G. So maybe it's not vendor hype that is the problem for them.
iainmorris 11/28/2017 | 2:25:38 PM
Re: Damned if you do ... It's the new radio side of 5G that Deutsche Telekom has described as "evolutionary." I sense other telcos share that view. Enrico Blanco, Telefonica's CTO, hinted that he felt this way in Feburary this year - that new radio developments were not the most important thing about 5G. I can't imagine most CTOs are all that excited about a new radio technology.  
mendyk 11/28/2017 | 2:09:24 PM
Re: Damned if you do ... It's not a question of whether telcos will migrate to 5G -- of course they will. But in this report, you note that DT sees 5G as "evolutionary" -- which is damning by not even faint praise, no? It sounds like the telcos you are talking to already see 5G as an albatross.
Joe Stanganelli 11/28/2017 | 1:59:49 PM
Efficiency doesn't sell like futurism Ericsson's been getting into the forecasting business, and futurism sells.

It's not hard to blame them for not getting to deep into efficiency when there's data to show that executives are more likely to be persuaded into digital transformation by futuristic promises of potential for new revenue streams than by hard numbers demonstrating cost savings.
danielcawrey 11/28/2017 | 1:55:08 PM
Re: Damned if you do ... I think concerns about technology readiness are warranted. 

Yes, there are places where the technology gap is not so wide. But there are vast areas where the digital divide does indeed exist. 
iainmorris 11/28/2017 | 1:52:30 PM
Re: Damned if you do ... I don't recall writing anywhere, and certainly not in this story, that telcos aren't going to invest in 5G if it is only about efficiency. Clearly, though, the investment case is harder to make if there is no (or not much) revenue upside (this is one reason Northstream thinks 5G will be deployed relatively slowly, and the reasoning is sound). It is even harder to make when there is widespread skepticism about the revenue upside and very little discussion of the efficiency benefits. 
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