STOCKHOLM – Ericsson’s third-quarter earnings might have been hit slightly by a slowdown in North American network deployments but that’s not necessarily a bad thing.
“Some operators in North America might have been optimizing their cash flow, but our position hasn’t changed,” said Ericsson CEO Hans Vestberg at a conference in Stockholm. “I don’t see any change in the long-term demand in North America. It’s still the most innovative market in terms of technology. It’s still seeing the most demand. It’s the most innovative market when it comes to new phones.”
Vestberg noted that while North America might have had an off quarter, other emerging markets picked up the slack. Ericsson grew at a rapid 56 percent in India, while business in the Middle East grew by 20 percent.
“When you look at it, seven out of 10 countries are growing,” Vestberg said. “And as a company we’re still growing at a pace of 8 percent overall.”
Much of that growth will be less about building out networks and more about meeting capacity in many developed markets.
Vestberg notes there are currently 7.2 billion mobile broadband subscriptions globally, but only about 300 million of those are 4G. “The vast majority of them are still on 2G,” he said.
Given the staggering differences between many markets, you might think each one has to be approached with a unique solution. Not so, says Vestberg.
“I sell exactly the same equipment in India that I sell in the United States,” he said. “For a long time we thought that maybe we could sell less efficient equipment in different markets, but they need equal efficiency in India, probably more efficient technology in India.”
In India, Vestberg noted, carriers might have 5 MHz of spectrum, whereas in a market like the United States, a carrier could have anywhere from 20 to 40 MHz swaths of airwaves.
Bur Ericsson isn’t entirely reliant on networking equipment to grow its business. The company is increasingly focused on software and services, such as virtualization solutions and billing systems. T-Mobile in the United States recently launched Ericsson’s billing platform.
Unlike hardware, software and services are deployed specifically for the individual needs of a given market.
“On services, we work differently,” Vestberg said. “So there we can be much more variable on our technology. “
Ericsson paints a picture of a global market that is far from slowing. Ericsson expects that 90 percent of the world’s 9 billion people will be covered with mobile broadband by 2020, with 50 billion connected devices total.
Filed Under: Infrastructure
