Ericsson calls for Europe to ramp up 5G as it wins SoftBank cloud dual-mode core contract

Just as it was announcing “solid” second-quarter results, Ericsson has revealed that Japanese comms provider Softbank is to deploy its cloud-native, dual-mode 5G Core technology to enable the launch of SoftBank’s standalone 5G services.

The technology will enable SoftBank to develop new 5G use cases towards consumers, enterprises and industry partners for its 5G standalone network. The system, which includes Ericsson Cloud Packet Core, Ericsson Cloud Unified Data Management and Policy and Ericsson NFVI, will play a key role in SoftBank’s operational transformation.

Ericsson said its dual-mode 5G Core enables SoftBank to develop new 5G use cases for mobile broadband users, as well as for enterprises and industry partners. The technology also supports zero-touch operation, including continuous delivery and integration processes (CI/CD), made possible through its container-based microservice architecture and automation capabilities.

Ericsson and SoftBank have been collaborating to develop and deploy 5G technologies throughout the Japanese market, including 5G RAN and 5G EPC. In May 2019, SoftBank chose Ericsson as its primary 5G radio access network (RAN) supplier, helping it to become the second operator in its country to offer 5G services. SoftBank has also been working with Nokia on tests to demonstrate the use of non-standalone 5G to operate connected cars commercially.

“Japan is a leading 5G telecom market and, together with Ericsson, we are building a new platform of innovation for the country,” said Keiichi Makizono, senior vice-president, CIO of SoftBank. “Under our new agreement, we will extend our long-term partnership and provide a high-quality and future-proof platform, enabling a new wave of innovation for Japanese society.”

Innovation was also mentioned by Ericsson president and CEO Börje Ekholm as the driver for economies to escape the Covid-19 doldrums as the firm revealed what it called “solid” second-quarter financial results. For the quarter ended 30 June 2020, its net sales inched up by 1% on an annual basis and by 12% quarter-on-quarter, to SEK55.6bn.

Ericsson’s total revenue for the half-year was SEK105.3bn, up 2% on Q2 2019. Second-quarter organic sales were flat and gross margin improved to 38.2% year-on-year, including negative effects from strategic contracts.

Yet even with flat sales and noting that the effects of Covid-19 had caused uncertainties, with current visibility Ericsson said it was maintaining its full-year targets for the group. Networks grew by 4% organically and the gross margin was 40.5%, slipping by just one percentage point annually (41.4%), absorbing a larger share of strategic contracts including 5G volumes in mainland China, where Ericsson recently took an inventory write-down. 

Looking ahead, Ekholm said that as the world prepares to exit the coronavirus-caused crisis, there was a need to restart economies and make strategic, forward-looking investments which, he said, must include 5G digital infrastructure. Yet as he saw many regions around the world increasing investments in this space, Ekholm expressed concern that Europe will fall behind.

“As critical national infrastructure, 5G will be a key determinant for long-term competitiveness of the general economy, and act as a stimulant to accelerate economic growth, attract future investments and speed up technology innovation,” he said. “We are ready to deliver on the promises of 5G, based on our strong 5G portfolio and a resilient balance sheet. We remain positive on the longer-term outlook.”