While telecom operators have a huge opportunity in tapping the potential of offering mobile Internet services, there are a number of challenges including cost of network roll out that could come in the way. Christian Hedelin, Head of Radio Strategy at Ericsson, spoke with BusinessLine on the company’s strategy to deal with some of these challenges. Edited excerpts:

What are the challenges that’s facing telecom sector?

We are in the middle of supporting the transition from voice-centric feature phone business model to data-centric business model. Telecom operators are looking at how they can monetise data efficiently. The second challenge is the cost of providing those services. How they strike a balance between a very profitable voice business and how to do they produce those services as cost-efficiently as possible. And the third one would be to extend business beyond consumer connectivity and monetising Internet of Things.

Do you see a threat from so-called OTT players like Facebook?

No. On the contrary over-the-top applications have provided end users great value. Value of having subscription has increased with all the applications and all the things we can do. We have cooperation with Facebook on how we get applications to perform better from a user point of view. With Facebook, we provide real network environment to allow application developers to understand now different network characteristic is and how it will impact their application. We acknowledge the fact that even if they are making applications on top of the network for end users the applications are adding value to the subscriptions and connectivity.

A recent study stated that key challenge to data uptake in India is lack of network. How can this be set right?

Not going into specifics of network, it has been too little spectrum licensed. In most markets, you will see great trend and experience if you allow operators to operate on more MHz. Having a forward looking spectrum licensing regulation is a foundation for mobile Internet penetration to prosper. It has been a slight challenge in India.

The other challenge is cost of building a network. Do you think there is a change in the way you do business with telcos?

Over the past 10 years, in some markets operators have been suffering from high operational expenditure. Ericsson is now managing one billion end users over operator networks.

This shift from voice-led business model to data-led business model, and that navigation costs a bit because in both terms your 3G and 4G coverage as well as your business of voice solution changes from instead of minutes to MB and GB. The other thing is that networks have to be designed in a manner that they are efficient and profitable. So we would facilitate more intelligence into the network to understand usage trends.

As operators move into banking services they need highly resilient network. In that scenario where does the Internet of Things play out?

2G was a perfect voice engine, 3G gave us a perfect data and web browsing experience, now 4G is now being led by high-end video services network. The emergence of 5G is where use cases will be solved what you are referring to. The emerging use cases, everything between mission critical communication to Internet of Things to enterprise offerings, is where we are putting efforts now- to understand those use cases.

Given that operators are yet to recover their investments around 3G and 4G, will the adoption of 5G be delayed?

We do not want whole industry to stress into 5G. We believe that 5G will be built out of the foundation of 3G and 4G networks and it will be used for specific cases. So 5G is more about how do we solve specific industries or consumer use cases.

Ericsson has got no 4G deals in India so far. How do you see India market coming along?

We are seeing great opportunity in India market; it is a very niche market almost the size of China. We see that there will be a great uptake of 3G and 4G subscriptions in future.

Do you think players like Ericsson need to do much more to connect the next billion?

We need to concentrate on how we can build ubiquitous Internet, good Internet coverage through mobile networks, cost efficiently. That is our most important mission. We are getting there but we are not there yet.

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