Ericsson CEO Worries Europe ‘Falling Behind’ in 5G Deployment
5G “is increasingly gaining momentum around the world,” said Ericsson CEO Borje Ekholm on a Q4 call Friday. But the executive worries that Europe risks falling woefully behind other global regions in 5G deployments and subscription activations, he said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
“Front-runner” countries are rapidly building out their 5G networks, and network operators that offer good 5G coverage are being rewarded with higher average revenue per user, “thus a reversal of the decline over the last few years,” said Ekholm. “This is actually not surprising, as it was very similar to what happened when 4G was rolled out.” Ericsson is "a leader in 5G, with 127 commercial contracts and 79 operating networks," Ekholm wrote shareholders Friday. "Our growth during 2020 is built on a strong and competitive 5G portfolio." The stock closed 7.2% higher Friday at $12.47.
China, the largest 5G market, grew to more than 100 million 5G subscribers last year, “but we also saw gains in many of the other markets,” including “good performance in North America,” he said on the call. “We so far have had limited 5G rollouts in Europe, and we are a bit concerned that Europe is falling behind the front-runners in China, Australia, North America and the Middle East.”
Many countries are accelerating their spending in 5G buildouts, “as they see the innovation on top of the network can easily create value that's five times to 10 times the network investments,” the corporate chief said. “We hope that Europe will see this value as well, before we fall too far behind the more aggressive countries.”
Ekholm thinks the migration to 5G is “inevitable,” he said. “It's attractive for the consumer, because it kind of generates value for the end user, but it also addresses the cost position from growing data traffic in the networks.”
Ericsson is “one of the key contributors in the work” taking place on open radio access networks for 5G, said Ekholm. “We have also championed and pioneered increased openness and cross-industry collaboration as a way to speed up innovation.” ORAN architecture “is going to be truly competitive,” but it's “a bit hard to address right now,” the CEO said. “We don't see it really ready for prime time, except for some low-performance applications or segments in the market.”
The “discussion” in Europe ought to be more about how “we drive forward on 5G networks now,” said Ekholm. “If we don't do that, we expose the whole industry in Europe to fall behind.” The “more healthy debate" in Europe, Ekholm said, is “what can we do to speed up that deployment?”
"Improved connectivity is the most fundamental block of the digital transformation and an essential pillar of recovery," a European Commission spokesperson emailed Friday evening. "5G in particular is a crucial asset for European competitiveness, digitalisation and sustainability." The representative noted that the EC in September recommended member states "boost investment in fibre and 5G networks" and that these nations should agree by March 30 "on a toolbox of best practices for the timely rollout of fixed and mobile very high-capacity networks."