Infrastructure vendors are squaring off over mobile broadband contracts and evolved packet-core deals worldwide. But Hans Vestberg, CEO at No. 1 telecom vendor Ericsson, says North America is the linchpin for vendors going forward, particularly given the region’s unique growth track for network builds.
“North America is one of the most important markets in telecom now, with investment going on in CDMA to HSPA to LTE to managed services,” he noted, speaking at a press event at the spring CTIA conference, his first appearance in the United States since becoming CEO. “We need and want to be the change agent when it comes to monetization and upgrades; we have invested quite a lot to stay in the forefront in things like 1gbps LTE trials, and also in routing IP to hold everything together.”
Mobile Traffic Still Growing
Looking globally, traffic continues to explode. “When the Chinese New Year hit, there were 23 billion SMS sent that night,” said Vestberg. “And to think that 10 years ago, none of us would have imagined that use of this technology. Actually SMS is now using more capacity than the voice users.”
Ericsson expects that by 2015 there will be at least 3 billion mobile broadband connections and 7 billion mobile subscriptions overall, signaling ongoing growth. And, most tellingly, the vendor envisions 50 billion connected devices in the networks.
In fact, mobile data usage is growing at a staggering 300 percent annual growth rate, which analysts expect to continue. Hence, there’s a paradigm shift for operators, which includes managing all that traffic effectively, providing a superior customer experience optimized according to application and device, and more. Not surprisingly, Ericsson thus sees almost 40 percent of revenue coming from the service organization, which focuses on deployments, business consulting, technology education and managed services.
“The last 10 years was very much about deploying technology worldwide, but the next 10 will be the installation phase of it, where we will finally have broadband networks covering the population in an entirely different way, driving new usage models in those networks,” said Vestberg. “When we think about mobility, we think a lot about [a phone]. But there are now more devices connected to the network than there are subscribers.”
Recession Still Biting
Despite consumer thirst, carrier investment is still suppressed thanks to the recession. China’s three major carriers, for instance, on March 25, cut their collective capex plans by 21 percent. “It’s a tough year, a very mixed year,” said Vestberg. “Operators are still constrained with credit, and they’re spending less because they took quite a big impact to their business because of the recession. But we still believe the infrastructure and the whole telecom business will grow ... even more so in the next 10 years because people will use the network for so many other things besides the mobile phone.”
