Ericsson, Vestberg and the 5G voyage
January 13, 2015
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Stockholm – Hans Vestberg (pictured), the president and CEO of Ericsson and founding member of the Broadband Commission for Digital Development, is according to an article that ran on Saturday in the British newspaper The Independent, one of the world’s most connected men, but not all of the time.
The author of the piece writes that wherever he is in the world be it North America or Africa, the 48-year-old executive insists that his feet be firmly planted on Stockholm soil by no later than Friday evening at 6 p.m. so that he can be with his wife and two children and at which point, all of his mobile devices are shut off for the weekend.
It is a firm rule the organization’s former chief financial officer says he has imposed since taking over the top job in 2010. Still, even with the rule in place he visits upwards of 50 countries annually and in each, talks about the importance of a concept he first announced nearly four years ago in a You Tube video called the Networked Society,
It forms the basis of Ericsson’s current and future existence and at the 2014 Ericsson Business Innovation Forum for media and industry analysts held at the Swedish Museum Of Photography, he talked about the changing technology landscape and how networks will be designed in the future to handle all the data that will be thrown at them.
The event, entitled Tomorrow Transformed, examined the impact ICT is having on every industry and all of society and during his presentation he used slide after slide to prove that point.
“When you understand what is going to happen in the next five years, you understand that the pace of transformation and technology change in the past 20 years has been extremely slow,” said Vestberg, the first non-engineer to run the company. “We are going to have two-and-a-half times more people on this earth having access to the Internet within five years.”
At the end of last year, there were 7.1 billion mobile subscriptions, of which 2.9 billion were mobile broadband subscriptions and 300 million mobile PCs, tablets and mobile routers. By 2019, according to Vestberg, there will be 9.1 mobile subscriptions, 7.5 billion mobile broadband subscriptions and 580 million mobile PCs, tablets and mobile routers.
Progress, he added, can be seen by the fact it took from 1875 to 1975 to connect 1 billion places and from there it took an additional 25 years to reach the point where 5 billion people were connected. By 2020, when upwards of 50 billion connected devices could be in existence, the requirements needed by the network will have to be far different than what exists today.
The company is banking on the 5G mobile standard and both Vestberg and Sara Mazur, the company’s head of research, who also spoke at the event, vowed that it will be in operation by 2020.
Mazur summed up the need for 5G in a recent blog soon after speaking at the 2014 edition of the Johannesberg Summit, the annual forum held each year at a castle just north of Stockholm in which telecom experts from a range of organizations discuss trends and the long-term future of the wireless and ICT industry.
“It becomes very obvious in a gathering like that that 5G stretches way beyond just radio technologies,” she wrote. “It’s also about network architecture, old paradigms changing, new spectrum challenges, technological and societal developments and the evolution of the entire communication eco-system where wireless solutions are vital.”
Meanwhile, an Ericsson white paper released in October, stated that the aim is for 5G networks to be highly efficient and faster, as well as being able to support more users, more devices, more services and new use cases without a corresponding impact on cost or carbon footprint.
“Machine-type communication will be one of the bigger changes in 5G networks. Everything will be connected: houseplants, bike helmets, water systems, crops, containers, financial structures and endangered species. By connecting things, we create a snapshot of the world, from the water quality in Northern Europe to the temperature of the ice in Antarctica. But what makes 5G truly interesting is what we do with the information that is available to us and how it can bring benefit to people.”
In December, the GSMA released a new report that outlines its “perspectives” on 5G’s development.
“Already being widely discussed, the arrival of 5G will help deliver a fresh wave of mobile innovation that will further transform the lives of individuals, businesses and societies around the world,” said Anne Bouverot, director general of the association that represents mobile operators and related companies.
“Of course, 5G is still to be standardized by the industry and it has not been fully agreed what 5G will look like or what it will enable. However, the GSMA is already collaborating with operators, vendors, governments and other industry organizations in ensuring that the 5G standard is both technically and economically viable.”
Johan Wibergh, executive vice president and head of segment networks at Ericsson, said in an interview that while today’s fixed and mobile networks are the most “complex technologies built on this earth, in the coming 10 years or so, they are going to go through a huge transformational change based on cloud technology. Cloud-based technology is going to be on both today’s telecom applications, it is going to be on the operator’s IT systems and also on the type of services that operators are offering consumers like the connected car application for instance.”
He likened it to changing the engine of a 747 jet, while still in the air: “That is the type of thing we are going to do, but not only the engines, but change out all the wiring, all the instruments in the cockpit and change the crew also in the coming years.”
The latest edition of the Ericsson Mobility Report, an update on mobile trends leveraging big data from live networks worldwide, backs up that need for change. The report revealed that proliferation of mobile technology continues at a rapid pace: 90% of the world’s population over six years old is predicted to have a mobile phone by 2020.
Fastest growth for new mobile subscriptions was found in India and China, with 18 million and 12 million net additions, respectively, in Q3 2014.
Rima Qureshi, senior vice president, chief strategy officer and head of M&A at Ericsson, said the falling cost of handsets, coupled with improved usability and increasing network coverage, are factors that are making mobile technology a global phenomenon that will soon be available to the vast majority of the world’s population, regardless of age or location.”
The report shows that in 2020 the world will be connected like never before, Qureshi added.
Smartphone growth continues as 65-70% of all phones sold in the third quarter of 2014 were smartphones, compared with 55% in the same quarter for 2013.
During an opening day presentation of the EBIF, Qureshi said that by 2020 with 9 billion people on the planet, 90% of the world will be covered by mobile broadband networks. She added that “someone once said that change will never be as slow as it is today.”
A Canadian who oversaw the integration of the CDMA and LTE assets Ericsson purchased from Nortel Networks following that company’s collapse in 2009, Qureshi said that the oncoming technology transformation will have a profound effect on every industry in existence today.
“No industry is going to escape and every industry will become somehow more efficient, industrialized and digitized,” she told Connections+. “It represents opportunities for those that embrace it, but it also represents huge changes and disruptions to the established way of working.
“Once you embrace change though and once you are able to reinvent yourself and reinvent your company there are so many opportunities. That said, it’s scary, of course it’s scary, but there are so many things that can be done.”
Qureshi said that while it is a “shame” that Nortel no longer exists, more ICT jobs need to be developed and more companies created to become part of the network ecosystem. “Whether it be a large player or smaller player, we absolutely need more companies. It is extremely important for the success of the country.
“I would love to see that same spark of innovation that we talked about today in Stockholm showing up in Canada. It doesn’t have to be a big company.”
The city where Lars Magnus Ericsson founded a telephone repair shop in 1876 already has one of the “world’s most developed IT infrastructures with 100% broadband coverage, both fixed and mobile,” but apparently that is not enough.
The Stockholm Chamber of Commerce has implemented an aggressive initiative designed to make the Swedish capital the “world’s most innovation-driven economy” by 2025. The city, said Maria Rankka, CEO of the Stockholm Chamber of Commerce, is an innovative growth engine.
“Digitization is complimentary to urbanization,” she said. “According to McKinsey Global Institute, there are 600 urban centres in the world that account for 80% of the global GDP. One in five Swedes live here in Stockholm; however they generate one-third of Sweden’s combined value added. The business climate has grown steadily.”
According to a document on Stockholm 2025 from the Chamber of Commerce, laying the best possible foundations for innovation requires a broad perspective: “Many factors need to interact to realize the vision of becoming the most innovation-driven economy by 2025.
“The Stockholm region faces major challenges in order to become a leading metropolitan region in the future. Some of the most important issues are to meet the high demand for housing and to create an efficient infrastructure with sufficient capacity and a high level of reliability.”
A decade, said Rankka, will be enough time to implement fixes to these and other problems.
“While the quality of life is high, we face challenges when it comes to housing, infrastructure and public transit. More international direct flights would also be welcome.
“If you want to bring in talent and they can’t rent an apartment that has an effect on innovation, paradoxically enough. Access to capital is another problem. Generally, the VC market in Sweden is large, but early growth stages are totally under capitalized. Companies have to go to Silicon Valley or London to get capital.”