Ericsson predicted that carriers will initially look to 5G technology to solve dilemmas caused by rapidly growing data use, which is doubling on a global basis every 18 to 24 months, during its second quarter 2018 earnings call.
“We see the first business case for 5G being enhanced mobile broadband, but the interest for fixed wireless access is heating up globally as well,” Borje Ekholm, Ericsson president and CEO said according to seekingalpha.com transcript.
Operators also desire 4G equipment that is 5G-ready so they can transition when the time is right and avoid ripping and replacing equipment. To that end, the Ericsson Radio System (ERS) portfolio can be upgraded to 5G through a software upgrade, according Ekholm.
“We see good growth in North America and that’s really on the back of our customers getting ready for 5G and actually preparing the network,” he said. “We see the market increasingly gaining momentum. Operators are needing to invest in capacity to manage the sharply growing data traffic. And we see that this gives many new opportunities, especially with our 5G-ready 4G portfolio.”
As carriers add capacity to deal with increasing data, they will need to lower their cost per gigabyte, Ekholm said, first by adding carriers to 4G, then by adding MIMO antennas and eventually through 5G NR radios.
“5G can actually lower the cost or can have 10 times higher efficiency compared to a pure 4G site,” he said. “So that’s why we think 5G is initially a capacity enhancer in metropolitan areas where the network is running short on capacity.”
Ericsson and Intel, together with China Mobile, have successfully demonstrated the first 3GPP-compliant, multi-vendor Standalone (SA) 5G New Radio (NR) call – accelerating the commercial deployment of standard-based 5G networks.
The 3GPP Release 15 5G NR SA specifications were completed on June 13, 2018 enabling Standalone 5G NR with user and control plane on a 5G next-generation core network. The Non-Standalone and SA releases share the same physical layer specifications. The successful interoperability test marks another milestone for the commercialization of the newly finalized 5G NR SA standards.
The partners have conducted live Interoperability Development Testing (IoDT) of 3GPP-compliant SA 5G NR technology at the Ericsson Lab in Beijing, China. The live IoDT operating at 100MHz on 3.5GHz mid-band used Ericsson’s 5G NR base stations and Intel’s 5G NR UE (Intel® 5G Mobile Trial Platform) prototypes.
Fredrik Jejdling, Executive Vice President and Head of Business Area Networks, Ericsson, says: “Successfully completing the first 3GPP-compliant Standalone 5G NR call marks another milestone with our ecosystem partners on the path to 5G commercialization, building on our years of research and standardization. Together, we’re delivering on our commitment to realize a standard-compliant and easily deployable technology that will bring benefits to our customers and end users.”
Asha Keddy, Vice President and General Manager Next Generation Standards, Intel, says: “Intel’s ongoing collaboration with Ericsson and China Mobile and our achievement of 3GPP-compliant Standalone (SA) 5G New Radio (NR) multi-vendor interoperability will help to prepare the industry for the deployment of 5G NR SA networks. As 5G networks begin to be deployed, a new wave of 5G experiences will be possible, powered by Intel technologies across the cloud, core network, access network, and devices.”
Huang Yuhong, Deputy General Manager of China Mobile Research Institute, says: “China Mobile has worked hard with global partners in setting up a common 5G SA standard. Now we have teamed up with Ericsson and Intel to achieve successful interoperability of 5G NR among multi vendors. This is an important milestone for the commercialization of 5G standards and will lay a solid foundation for China Mobile in our large-scale 5G trial, enabling the success of the global 5G industry.”
Later this year, Ericsson and China Mobile will conduct a 5G field trial in Suzhou city of Jiangsu Province, where the demo system will also be deployed and tested. Ericsson and Intel have been collaborating on 5G and jointly conducting trials globally with communication service providers since 2017.
In contrast to other opinions in the industry, North America is expected to lead the 5G uptake, according to the Ericsson Mobility Report, with all major U.S. operators planning to roll out 5G between late 2018 and mid-2019. By end of 2023, close to 50 percent of all mobile subscriptions in North America are forecast to be for 5G, followed by North East Asia at 34 percent, and Western Europe at 21 percent.
Globally, major 5G deployments are expected from 2020. Ericsson forecasts over 1 billion 5G subscriptions for enhanced mobile broadband by the end of 2023, accounting for around 12 percent of all mobile subscriptions.
Mobile data traffic is estimated to surge by eight times during the forecast period to reach close to 107 exabytes (EB) per month – a figure that is equal to every mobile subscriber in the world streaming full HD video for 10 hours. By 2023, more than 20 percent of mobile data traffic worldwide is expected to be carried by 5G networks. This is 1.5 times more than the total 4G/3G/2G traffic today.
Like previous mobile access technologies, 5G is expected to be deployed first in dense urban areas with enhanced mobile broadband and fixed wireless access as the first commercial use cases. Other use cases will come from industries such as automotive, manufacturing, utilities, and healthcare.
Fredrik Jejdling, executive vice president and head of business area networks, says: “2018 is the year 5G networks go commercial as well as for large-scale deployments of cellular IoT. These technologies promise new capabilities that will impact people’s lives and transform industries. This change will only come about through the combined efforts of industry players and regulators aligning on spectrum, standards and technology.”
First-generation, 5G data-only devices are expected from the second half of 2018. The first commercial smartphones supporting 5G in the mid-bands are expected early next year, while support for very high spectrum bands is expected in early to mid-2019.
The Ericsson Mobility Report also features articles on network performance through the eyes of customers, smart manufacturing, machine intelligence in network management, and the importance of securing the right spectrum for 5G.
The first commercial Licensed Assisted Access (LAA) technology has been deployed in Russia, resulting in Gigabit LTE peak download speeds. The LAA commercial rollout was part of an agreement signed by MTS, a Russian operator, and Ericsson in 2017 to upgrade MTS network with Ericsson Radio System and core network solutions and Qualcomm Technologies
Delivering Gigabit LTE speeds, this is the first commercial LAA rollout in the region and is part of the agreement entered by MTS and Ericsson in 2017 to upgrade the MTS network with Ericsson Radio System and core network solutions and prepare for 5G and IoT.
LAA provides access to additional unlicensed frequencies to operators. With this milestone, MTS has surpassed its previous 700 Mbps speed record, enabling the service provider to take the next step in turning its mobile infrastructure into gigabit-capable.
Ericsson first quarter results for 2018 were a good news, bad news scenario. The bad news was sales decreased by 2 percent year over year, adjusted for currency FX. The good news was the company’s gross margin grew to 34.2 percent compared with 15.7 YoY.
In the quarter, Ericsson reduced its total workforce by more than 3,000, bringing the total reduction to 18,000 since July of last year. At the same time, it has hired more than 500 engineers.
“But at least we have reestablished growth, showing the competitive product portfolio we have,” Börje Ekholm, president and CEO of Ericsson said according to a SeekingAlpha transcript. “We see very good demand from customers, which I would say shows the strength of our product portfolio. We see good traction on our 4G products that supports our operators to transition from 4G into 5G.”
Although the Q1 numbers were weighed down by restructuring charges, Eklholm said the gross margin numbers are a sign the OEM has turned the corner.
“A cornerstone in our strategy is to invest in R&D for both technology leadership and cost leadership, which will allow us to generate higher gross margins. We continue to increase our R&D investments in networks to lead in 5G,” Ekholm said.
Ericsson Radio System is penetration is up to 84 percent, according to Ekholm, and the company plans to continue the transitioning into ERS .
“So clearly, it is a sign that the investments in R&D are paying off now,” he said. “We continue here, of course, to invest in R&D for a leading portfolio. The objective is to fully transition into ERS during 2018 for additional competitiveness.”