Ericsson Hypes 5G After Telcos Slam 5G Hype

Iain Morris
11/28/2017

Show me the money
As it happens, the latest forecasts seem credible, assuming that 5G technology does indeed get launched in 2019 or 2020. Ericsson's headline prediction is that the world will have about 1 billion 5G subscriptions by 2023, or about 11% of total mobile subscriptions by that date. Bengt Nordström, the CEO of the independent Northstream consulting business, thinks operators will upgrade between 12% and 15% of their networks every year and that it will therefore be seven to ten years before 5G is widely deployed. Given that operators in some emerging markets will probably lag -- Ericsson itself thinks Africa will have no more than 2 million 5G subscribers by 2023 -- the global 5G forecast does not look ridiculously optimistic. (See Ericsson Forecasts Lackluster 5G Take-Up in Africa.)

Earlier in November, Ericsson's new CEO, Börje Ekholm, wouldn't project any sales numbers for 5G for the vendor in 2018 or 2019, instead looking to 2020 or after. "We expect to see some sales, but it will not be significant ... We don't know the timing yet," he said of 5G expectations in an interview with Light Reading in New York. (See Ericsson's CEO on 5G, Managed Services & Keeping Subscribers Happy.)

There are two big questions for an operator audience, and on those Ericsson's mobility report has little to offer. First, what kind of 5G are we talking about here? A new radio that can be attached to an existing 4G network to boost connection speeds and reduce latency? Or an entirely different network architecture that makes use of the cloud, edge computing, artificial intelligence and other groundbreaking technologies to give operators a radically different modus operandi? If it is the former, then 5G will only ever be an "evolutionary" technology, as far as Deutsche Telekom is concerned. Yet the latter will not materialize quickly unless the industry gets cracking.


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Light Reading.


Second, how do 1 billion 5G subscriptions assist operators? Sure, the technology will help them cope with giddy rates of growth in mobile data traffic, even if it is just a new radio standard. Yes, it should support new types of connectivity service for enterprise customers, and deliver a boost to industrial productivity. But it probably will not similarly bolster telco service revenues, market watchers predict. If 5G is to spur growth in profits, and satisfy investors, it may have to deliver much greater efficiency in all parts of the network.

The two questions, of course, are related. Only when 5G extends beyond new radio will telcos get more automated and profitable networks. Gauging the full benefits is not easy while so much has yet to be addressed on the technology side. Yet Ericsson could make a start. Providing some insight might help it to curry favor with telcos that have increasingly been drawn to Huawei in the last few years. It needs their approval now more than ever.

— Iain Morris, News Editor, Light Reading

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kq4ym
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
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
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
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
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
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
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
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
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
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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