Mobile Devices

4 takeaways from Ericsson’s 5G-centric 4Q results

27 January 2020

If all goes according to plan, 2020 is set to be a huge year for 5G, the next generation cellular technology. Ericsson is gearing up for this by planning for multiple deployments in China as well as other nations as telecoms begin to push further into this technology sector.

5G was launched last year in North America, Europe, South Korea and minimally in a handful of other countries, but most analysts agree that 2020 will be a big year for the technology as coverage is expanded to cities where 5G is already deployed and other cities get the technology for the first time.

Ericsson has 78 commercial 5G agreements with operators and its equipment powers 24 live 5G networks on four continents.

During its recent fourth quarter financial results, Ericsson detailed some of its 5G plans for 2020.

1) China began its deployment of 5G commercial networks in late 2019, but is quickly expected to dominate deployments as the country has already deployed infrastructure to 50 cities even before the launch. According to ABI Research, Chinese operators expect 143 million subscribers to 5G by the end of 2020, representing about 70% of total connections worldwide. These Chinese 5G deployments in 2020 are expected to carry smartphone shipments out of a three-year downturn, International Data Corp. said.

Ericsson said while it is still too early to gauge volumes and price levels for deployment of 5G in China, the company has invested in R&D and supply chain in the country in order to increase its market share. Initially, the company believes it will be a challenge, but over the lifespan of the technology, it is expected to prove profitable.

Part of this development in China includes opening a 5G smart factory in Nanjing, China, to produce 5G and 4G radio technology and establishing a joint 5G lab in the country with Chinese smartphone maker Oppo designed to accelerate large-scale global deployments of 5G.

2) Strong development is happening in Ericsson’s Digital Services thanks to 5G deployment and the company plans to re-invest in its R&D for 5G and cloud-native portfolio.

3) The investments in 5G that will happen in 2020 will impact Ericsson’s costs during the year but will pay off in productivity in 2021 and beyond, supporting improved margins.

4) Due to the momentum of 5G, the company is tracking toward its financial goals for 2020 and 2022 and sees 5G strengthening its position in the market despite having heavily entrenched competitors in the form of Huawei and Nokia.

Ericsson said recently that it will build a new R&D center in France in order to accelerate adoption of 5G technology in Europe. The site will focus on 5G software development and security that will serve as a prerequisite for the digital economy in the next-generation cellular infrastructure. The site will open in early 2020, increasing the number of employees to over 300.

Part of the investments into 5G for Ericsson includes researching other ways the technology may benefit segments of the electronics industry outside traditional smartphones. This includes how the technology could be used in production and industry to control complex manufacturing processes such as mobile robots, logistics, multi-site production chains and industrial internet of things.

Other pilot projects involving 5G includes enabling a 5G-enabled driverless passenger ferry in Norway, teleoperated drone flights in Australia to test beyond the visual line of sight (BVLOS) technology and an automated smart factory to focus on industrial improvements in manufacturing in Texas.

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