Ericsson bullish on 5G despite Covid-19

Ericsson president and CEO Börje Ekholm has highlighted the importance of connectivity during times of crisis and what he says is the “opportunity” to rethink the role of networks in the future.

Kicking off the Ericsson UnBoxed Office, the first in a series of online events that will replace, for the time being, the company’s traditional presence at now-cancelled global trade shows, Ekholm stressed the importance of strong and reliable communications networks in the current environment, and staying close to customers and providing them with the best possible connectivity and network quality.

Ekholm’s address was based on research by Ericsson that revealed what the company calls transformative changes that have been going on in networks over the past two months, with traffic shifting rapidly from business areas to residential areas over just a matter of days. This has seen traffic increasing by 20-100% in many networks, with the largest share of traffic increases being absorbed by the fixed residential network over Wi-Fi.

The research also highlighted new working patterns that have developed in locked-down countries, with huge rises in upstream traffic resulting from a vast increase in videoconferencing. The study showed videoconferencing service Zoom had seen a 535% rise in daily traffic between March and April.

“More than ever, connectivity is key,” said Ekholm. “With the spread of Covid-19, fixed and mobile telecommunications networks have become an even bigger part of the critical infrastructure, showing the importance of quality in the connectivity. When we looked across all service providers, not just leaders, network quality correlated with increased ARPU [average revenue per user] and reduced churn. Put simply, investing in network quality keeps subscribers happy.”

One network in which Ericsson will continue to invest is 5G, said Ekholm, which offers service providers an opportunity to gain first-mover advantage and create a significant network performance gap with the competition.

“We are already seeing early signs of service providers monetising the 5G opportunity, with positive ARPU trends and growing revenues in pioneering 5G markets,” he said. “5G will unlock the potential of the Fourth Industrial Revolution and will be the cornerstone upon which a country’s relative competitiveness is built. While 4G gave us the app economy, 5G will be the greatest open innovation platform ever.”

Ekholm said that given the importance of connectivity, and 5G in particular as critical national infrastructure, it is in the public interest to ensure that pervasive, high-quality, affordable and secure networks are available when and wherever they may be required.

He predicted that 5G will drive exponential public and private sector value, including efficiencies in public services and new and more effective modes of delivery, for example in healthcare, education, transport and disaster control.

To enable these gains, Ekholm called on governments to ensure that every citizen and business will enjoy the benefits of the 5G era equally. He said countries need to develop a common and holistic policy that maximises investment incentives for the private sector and makes available, as soon as possible, sufficient 5G spectrum and optimised spectrum assignments to deliver “expansive” 5G connectivity.