Mobile Devices

3 takeaways from Ericsson's 5G-focused financial results

21 October 2019

Ericsson has been one of the leaders in supplying 5G equipment to telecom vendors worldwide. It is therefore no surprise that much of the company’s third quarter sales growth was the result of year-long 5G deployments.

While 5G deployments helped contribute to Ericsson’s 6% sales growth during the quarter, what Ericsson revealed about its 5G is equally important.

China will lead 5G

Ericsson believes that the largest market for 5G infrastructure will be China where deployments are expected to start near term. Recently, China awarded 5G licenses to four vendors in China with the goal of beginning deployment in 2020. Currently, South Korea is considered to be the leader in 5G deployment having rolled out infrastructure across the country earlier and faster than any other region.

Ericsson said it invested in the region to increase market share but has not been able to determine any volume or price levels. Traditionally, the Chinese market for telecommunications is challenging due to numerous players looking to capitalize on the largest electronics market in the world.

5G is taking off fast

Due to the high demand for 5G, the technology is taking off faster than Ericsson anticipated. Initial buildout is happening quickly in metropolitan areas. As the technology matures, 5G will come to the industrial and internet of things (IoT) use cases. This will bring new opportunities for telecom and equipment vendors to capture revenues while at the same time bring additional benefits to consumers and businesses, Ericsson said.

Already, numerous companies are exploring ways to use 5G beyond applications for higher download speeds for smartphones. Some of those other use cases include improving emergency services, enhancing television and entertainment, enabling robots to travel faster and work longer, allowing self-driving cars to communicate and assisting with smart agriculture.

IoT growth accelerating

While 5G will have a significant impact on what can be done with the IoT, already the market is growing nearly twice as fast as the estimated 20% to 25% growth per year Ericsson originally forecasted. As a result, the company plans to increase its investments in the IoT infrastructure. Currently, Ericsson has more than 4,500 enterprises on its IoT platform and the number of connected devices on its platform has more than doubled in 2019.

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