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Interview with F. Jejdling, Head of Region, India, Ericsson

March 30, 2012
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Interview with F. Jejdling, Head of Regi...
The year 2011 was a busy one for Ericsson India. The company helped operators roll out their 3G networks, expand their product portfolio and establish their presence in the long term evolution (LTE) market. Going forward, the vendor is looking to consolidate its presence in the telecom equipment space. In an interview with tele.net, Fredrik Jejdling, head of region, India, Ericsson, spoke about the major challenges for the company and the technology trends expected in the sector in 2012. Excerpts...

What were the major milestones for Ericsson in 2011?

The Indian telecom industry marked major milestones in 2011. A key highlight was 3G/HSPA roll-outs. Ericsson’s strong presence in most 2G circles has helped the company gain a strong foothold in the 3G network space. Leading operators like Bharti Airtel, Vodafone India, Aircel and Idea Cellular selected the company for 3G network roll-out. We continue to be the market leaders in the 2G/3G space. We have also established our leadership in the LTE segment through joint trials with Qualcomm, Reliance Infotel and other broadband wireless access (BWA) licence winners. In addition, we have signed India’s first 4G/LTE TDD contract with Augere.

In 2011, we expanded our services portfolio, especially in the area of managed services. We signed contracts with Bharti Airtel, Aircel and Sistema Shyam TeleSer-vices Limited (SSTL). We increased our presence in segments such as mobile broadband, managed services and operations/ business support systems (OSS/BSS). With the acquisition of Telcordia, we are also the leaders in key OSS/BSS areas.

Have the company’s achievements been in line with the targets?

Network sales profited from the initial 3G roll-outs in the first half of 2011. However, regulatory uncertainties and market realities contributed to a slowdown in infrastructure investments in the second half. The telecom market, especially voice, has fragmented and become cost competitive, which has led to a new operator focus on reducing expenses. Ericsson’s managed services portfolio has helped operators achieve their targets.

What is the company’s agenda for 2012?

Apart from providing valued networks, Ericsson is set to strengthen its leadership in terms of innovative service capabilities. Technology leadership is a business imperative and we continue to invest heavily in it.

What technology trends are expected in the Indian market in 2012?

The Indian telecom industry is going through short-term turbulence. We believe that India will witness mobile subscriber growth and increased data service usage in the near future. Smartphones and improved infrastructure have driven the uptake of mobility around the world. The number of internet users typically increases as broadband becomes more accessible.

Ericsson envisions a “networked society”, which will follow the “information society” that we are living in today. We expect 50 billion connected devices by 2020. Over the coming decades, technology advancements and infrastructure evolution will change the way we live, the way we work, the way markets function and the way societies act. In this networked society, everything that benefits from a connection will be connected. Old barriers to learning, participation and economics will be removed and there will be new models, services and solutions to meet global challenges. Information and communication technology will converge into a universal information infrastructure, driven by mobility, broadband and cloud services.

Three major interdependent trends are expected in the near future:

•   Mobility: The freedom of being connected from anywhere

•   Broadband: The shift from dial-up to broadband

•   The cloud: This will enable new business models; rationalise resources by combining IT and telecom networks; and allow improved services at low prices.

There is also a continued industry focus on network capacity and service quality. We combine our strong position in the technology market, service capabilities and global presence to provide value to our customers.

The key technology trends likely to impact individuals and the company are:

3G: The successful roll-out of 3G is a major milestone for the Indian telecom space and a step towards achieving the target of communication for all. 3G will ensure improved access to communication, which will drive economic growth. Of the estimated 5 billion broadband subscribers by 2016, about 80 per cent will be mobile users, and the majority will be served through HSPA and LTE TDD  networks. 3G is expected to be the dominant wireless technology as the complete ecosystem is already in place.

LTE: BWA service roll-out is expected in 2012. LTE offers a major opportunity for wireless service providers to capitalise on the increasing demand for broadband and take advantage of technology innovation. It offers a superior user experience and simplified technology for next-generation mobile broadband. LTE will enhance user experience by offering applications such as interactive TV, mobile video blogging, advanced games and professional services.

The cloud: Several operators and service providers are scaling up their delivery of cloud services for global customers. Cloud computing means that capacity is available on demand from a service provider, which allows an enterprise to customise IT based on the actual needs. Migration to cloud computing is an enabler of true standardisation. Cloud computing is likely to significantly change the way we source services and will drive the transformation of the information architecture and business processes. Hybrid solutions would emerge as the structure for enterprises, which would require a secured combination of on-premises or hosted infrastructure with multi-tenancy in the cloud. The challenge is how and when to initiate the transition. The strategy should include which processes and applications should migrate and why. A way of minimising risks is to first migrate IT capabilities for non-/or less strategic business processes.

How are the Indian market’s requirements different from others’ in terms of technology deployment and adoption?

3G has finally come to India. Ericsson has played an important role in this. What is happening here now is very similar to the market development in Europe, where there was a huge expectation of data growth taking off as soon as the 3G networks were deployed. But data demand has not taken off in that manner. It has been a year since 3G was launched, and India will need to increase usage on the network. There is significant demand for mobile broadband and 3G/4G services, but the right business models need to be adopted, with attractive pricing to facilitate growth.

Therefore, Ericsson should be able to participate and drive the business environment in the right direction, and evolve innovative business models to establish an ecosystem that drives data traffic through the networks. This could be achieved by making available smartphones and pricing plans that are both acceptable to operators and affordable for users.

However, the development of any market takes time; it took seven-eight years for the optimal usage of 3G networks in Europe (supported by the iPhone). Development of the smartphone segment will facilitate data growth in India.

Which were some of Ericsson’s major contracts in 2011?

The key deals won by Ericsson in 2011:

•  3G: Ericsson was selected by most of the leading operators (Bharti Airtel, Aircel, Vodafone India and Idea Cellular) to roll out 3G networks. We have rolled out about one-third of the existing 3G networks in India.

•   LTE: Ericsson has signed the first LTE contract in India with Augere for the Madhya Pradesh circle (roll-out scheduled for mid-2012).

•    Managed services: Ericsson has expanded its footprint in the Indian managed services market. We have signed several deals with operators including Bharti Airtel, Aircel and SSTL.

What will be Ericsson’s focus areas in terms of target customers and product segments?

We will continue with the current focus on more coverage and network modernisation projects rather than capacity expansion projects. With our global scale and presence as well as technology and service leadership, we are well positioned to drive and lead industry development.

The network would be a key differentiator for operators going forward. The combination of mobility, broadband and cloud with additional applications presents major business opportunities for the consumer market and, perhaps more importantly, for the enterprise market.

Technology has enabled us to interact, innovate and share knowledge in new ways, thereby leading to a dynamic shift in the mindset. People are empowered, businesses are liberated and society is better connected than before. At Ericsson, we are  beginning to explore the possibilities of what we call a networked society.

Do you plan to expand your research and development (R&D) initiatives in India?

Since technology is central to our business leadership, we continue to focus in this area. Ericsson has three R&D centres in India – in Gurgaon, Bengaluru and Chennai. We are undertaking R&D in areas including revenue management, IP and OSS. Moreover, R&D in India connects with our head office research unit for undertaking research activities in partnership with universities/institutes.

How do you perceive the Indian telecom market in terms of business opportunities?

The much-awaited 3G/HSPA and BWA spectrum auctions and the subsequent allocation took place in 2010. All operators which won spectrum set up networks and rolled out 3G/HSPA services quickly. Indian consumers are now witnessing a new trend in communication services where data is becoming as important as voice.

Also, there is a growing focus among operators on reducing operating expenses. This trend will lead to further growth of the managed services business.

How would you rate the company’s performance vis-à-vis competition?

Ericsson operates in 180 countries and we face competition across the world. The company established its business in India in 1903 and, therefore, competition is not new to us. We are focused on our business, providing value to customers and staying ahead of competition.

 
 
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