For Ericsson, India has emerged the third-largest market with the company having registered a 25 per cent growth in revenues last year. The country is also the largest employee base for the company, which has been present in India for more than 110 years, with a total of 19,971 personnel. The Swedish firm is investing $15 million to set up an export-oriented manufacturing unit in Pune, which is expected to start production in the first half of 2016.
Ericsson had spent 36 billion Swedish krona ($3.8 billion) on research and development last year alone. In an interaction with BusinessLine , Chris Houghton, Head of Region-India, says the company does not expect 5G to be introduced in a single step. The technology will evolve gradually over time, extending into the next decade, Houghton adds. Edited excerpts:
As of now, a voice call from over-the-top (OTT) will depend on the bandwidth offered by a subscriber’s data plan. However, the subject is being discussed and various aspects are being considered. As per a TRAI whitepaper, the impact on voice services is not considerable in India, at least till date, because the country has one of the lowest voice calling rates in the world.
On Ericsson’s plans to set up a manufacturing unit in Pune, what’s the investment and what do you intend to produce?
We are setting up an export-oriented manufacturing unit in Pune with an investment of $15 million. The facility, Ericsson’s second in the country, is expected to start production in the first half of 2016. The facility, being set up for production of core telecom products, will manufacture Minilink in the first phase, while 2G, 3G and 4G-related products will be added, going forward. Apart from catering to the Indian market, this unit will serve as an export hub for South East Asia, the Middle East and sub-Saharan Africa.
The new spectrum, both 3G and 4G, won by operators means more business for Ericsson. What are your strategies to win a large share of these contracts?
Our long-term relationships with every major telecom operator in the world provide us with a unique experience and edge. With 115,000 professionals and customers in 180 countries, we combine global scale with technology and services leadership.
Our consistent efforts in R&D give us the technology leadership that enables us to offer unique solutions to our customers. For example, last year alone, we spent Swedish krona 36 billion on research and development. We are passionate about developing today’s network and services to new levels to realise the networked society and our operators see us as a trusted partner.
How do you see 5G networks evolving?
The introduction of 5G will not happen in a single, clearly visible step. We expect 5G to evolve gradually over time, extending into the next decade and becoming an essential component in the networked society.
We expect the fully commercial 5G systems to enter the market sometime in 2020. We believe in the 5G era, operators will have one physical network infrastructure and one pool of frequency bands, supporting many separate virtualised networks, each with unique characteristics for meeting the specific requirements of the 5G application it serves, for example in utility or transport context.
Globally, Ericsson is trans-forming into an information and communications technology firm from a telecom company? Why?
Ericsson’s business mix has changed over the past few years with 66 per cent of sales in 2014 coming from services and software and requirements being placed on today’s networks in order to capture all the needs of users. In this transforming industry, we need to stay ahead of the curve and lead the change in order to capture the opportunities as an ICT partner.
At Ericsson, we are looking to excel in our core business and build a leading position within target areas. Globally, the targeted areas in which the company is investing – IP networks, cloud, Operations Support System and Business Support Systems, TV & Media and Industry & Society – has posted a 10 per cent growth in sales in 2014.
Your thoughts on the number of patents issues on mobile handsets that have cropped up recently?
Global sharing of technology has created the success of the mobile industry and allowed new entrants to quickly build successful businesses. We don’t keep our developments for ourselves. We share them with the world and our competitors. This sharing of technology has allowed the industry to develop into the huge success it is today.
With that in mind, we believe it is reasonable to get fair compensation from companies benefiting from the development we have made over the course of the last 30 years.
It is our philosophy that licences for patents essential to standards should be widely available at fair, reasonable and non-discriminatory (FRAND) terms, subject to reciprocity, to compensate companies that have invested substantially in developing these standards. Our licensing terms for essential patents comply with common industry interpretation of FRAND.