India likely to overtake America in 5G roll-out by year-end: Ericsson CEO

'We are the biggest contributor to the standards of O-RAN', said Börje Ekholm

Börje Ekholm, CEO of Ericsson, one of the key telecom gear suppliers to telcos, spoke to Surajeet Das Gupta during a visit to New Delhi about India’’s 5G journey. Edited excerpts:  

India might have started a bit late in launching 5G, but does Ericsson, a vendor for Reliance Jio and Bharti Airtel and many telcos across the world, see it catching up with the world?

Compared to 4G, India is actually deploying the latest technology in 5G. And the reason for that is, of course, the growth in data traffic. Data usage is probably north of 20 gigabit per month, probably at 25 now, and growing 30 per cent per year. In Europe it is around 15 gigabit per month. From the pace of the 5G rollout, I would say by last year end, it was almost at level with Europe and now probably ahead. I believe that by the middle of this year, it will be at the same level as North America and by year-end most likely well ahead of even America. The scaling and the build-out of 5G here is the fastest we have seen.

What does this fast roll out mean to India on the global stage?

The pace of this roll out will pay off. In 4G India perhaps lost out a bit because it was really launched in North America and in China first. So these countries built the first digital infrastructure at scale and they were ahead. It's not surprising that the big tech companies for consumers, that largely digitalized the smartphone, were from America and they created jobs there. With 5G now, when we take the next step to future consumer applications and enterprise digitalization, I see a great opportunity to actually develop those applications in India. Because you have the infrastructure now, a lot of good engineers, venture capital, entrepreneurship. India could become the global hub for 5G based applications.

In India, you are rolling out both non-standalone (Bharti Airtel) and standalone (Reliance Jio) 5G technology. There is a lot of debate globally on which one is more efficient. What is your view?    

Ultimately, we will need to be standalone (SA). We need to have a SA network for low latency, network slicing amongst others. Telcos are taking different paths and I will not evaluate their choices. We are investing in both. But at the end of the day, there is only one - I think there is ultimately only SA that you will see. Currently there are 240 5G networks around the world and 20 are standalone. We will see rapid pickup over the coming 12 to 18 months of standalone networks. It's a software upgrade and can be done relatively fast.

Open radio access network, where software and hardware are de-bundled, has been supported by the US, Japan, South Korea and in India telcos are testing it. But Ericsson has not been enthusiastic about O-RAN at all. Why?

I'd like to put it straight. We are the biggest contributor to the standards of O-RAN. We're actually investing heavily in it because we believe in the separation of hardware and software. That’s why we may be perceived to be against it. We believe we still need to make sure that we win on cost and performance for our customers.

But why is there a difference between you and others on the pace of O-RAN deployment?   

Today, what is more efficient is an integrated stack (hardware and software bundled in one). Tomorrow, whether that is 12-18 months out, we think there is a real opportunity to separate hardware and software. My biggest worry has been that it could break up the current global standard - we don't want to end up getting 800 networks around the world that are all independent. We expect mass deployments of O-RAN, probably in 2024-25.

Monetistion of 5G seems to be a major issue. In India, Vodafone-Idea has said there are still no killer applications for monetisation. Does it make sense to launch 5G services at all or is it better to wait?

If you say that use cases aren't there, they will never come without putting up the infrastructure. And the first movers historically will always capture most of the value. History has proven that only when you build the infrastructure, do applications follow. You can see it in 4G.  

Telcos in India have opposed a government move to allow private networks in 5G. Many companies want it and own the spectrum and want to be in control. Your view?    

For us, it doesn't matter. But as a country, the scarce resource in wireless is spectrum. If you start to fragment the spectrum, you limit the opportunity to use the scarce resource. Therefore, I would be a bit cautious on the industry spectrum. But enterprises can lease spectrum from the operator.  You can keep the spectrum holding together.

The Indian government is making a big push for indigenous technology as you see in the BSNL order. Reliance Jio wants to sell its 5G stack to the world which will make them competitors. How do you see this panning out?

I don't know where exactly the future market will go or what it will look like. But we are determined to invest to lead. That will have to be our edge. We compete with companies and we cooperate. I think that's also the future model. Ultimately, we have to be at the forefront of innovation.

How do you see India as a manufacturing hub for exports across the world for Ericsson. After all, your partner Jabil is eligible under PLI?

India is competitive for us as a manufacturing nation so it is not unlikely. There is an opportunity - we will always need a diversified manufacturing footprint. We have Europe, north America, south America and Asia. We will always need that in order to balance supply and geopolitical risks.

You have announced a global reduction of staff by 8,500. Will it impact India?

The reality is we had gotten a bit inefficient and we believe 2023 has a choppy outlook. Maybe we grew a bit too fast in R&D to solve a lot of problems short term. Now we need to remain efficient. The market is very competitive and we have to reduce costs. India for us is growing fast so you can probably infer something from that. But we will communicate with countries which are directly affected.