Companies
‘India tops Ericsson agenda; country to be future 5G hub’
Summary
Swedish telecom gear manufacturer Ericsson considers India a top priority market for 5G networks and plans to scale up manufacturing and expand its workforce to meet the demand. India already contributes 11% of Ericsson's global sales and is expected to remain relevant in the futureNew Delhi: India has been a top priority market for Swedish telecom gear manufacturer Ericsson with telecom service providers spearheading the fastest deployment of 5G networks, said Nunzio Mirtillo, senior vice president and head of South East Asia, Oceania and India, in an interview. With India likely to be among the top five markets, alongside the US and Europe, Ericsson is scaling up its manufacturing locally, and expanding its workforce to export its gears in significant numbers, beginning this year. Edited excerpts:
With India swiftly rolling out 5G networks, what has been the impact on your operations in India and where is India placed in terms of your global operations?
India remains a very strategic country for Ericsson and, now, it’s obvious. Six or seven years ago, it was less obvious, but we always put India on top of our agenda. The 5G rollout is the fastest ever. We already have around 250,000 5G sites, which is massive, and a huge part of the population is already experiencing or can use 5G. We have gained a substantial market share in 2022, thanks to partnership agreements with Bharti and Jio. We have reorganized our market area to serve this huge rollout. My market, which is Southeast Asia, India and Oceania, grew 132%, mainly because of India. As a country, India is already in the top five in terms of sales for Ericsson, but in Q1 (2023) it was No 2 and contributed 11% of the company’s global sales. No 1 is the US with 37%. So, India was very important before, and it is even more important now.
Do you expect India’s share to rise beyond 11% since 5G installation is expected to rise from hereon?
Everything depends on what is going to happen in other countries. However, for sure, India will stay very relevant.
You already have tie-ups with Airtel and Jio; what’s the status of the talks with Vodafone Idea for 5G?
It’s a bit slow, because they are reorganizing themselves. We are managing part of their network with our 4G and we are ready to start 5G. But, they need to find a way to free up capex for 5G. It will make a lot of sense. So, we are on a wait and watch mode.
What kind of demand do you expect in the upcoming quarters? Will you expand production in India?
We have scaled up our capacity in Pune, with our partner Jabil. The facility is the most advanced, and we have the latest technology. It is also the biggest in terms of production per day or production per month, globally. It is meeting 100% of local demand.
When do you plan to start exports in significant numbers?
We are ready to export. There is no barrier. But it has to make sense from a logistic and business case point of view. Big demand that comes from Asia, the Middle East and Africa. We have several production sites in the world, and obviously, we select production sites that minimizes the cost, benefiting our customers as well as us.
What kind of business upsides are you expecting from fixed wireless access (FWA) for FY24? What about device prices?
The upside is more, I believe, for the operators. They can use the same technology and the same competence for two reasons: one is mobile broadband and the other is FWA. Of course, there’s upside for us as well because our technology will be used even more. The number of devices are also constantly increasing and the Indian ecosystem, as such, will contribute to bring the FWA devices to the next level. I’m sure that the operators are working on that, and considering the volume of India, obviously they can contribute worldwide to bring prices down. According to the Ericsson Mobility Report, there will be around 300 million connections on FWA by 2028, and I would say a significant portion of that will be because of India, and that is not insignificant.
What’s the growth for enterprise and private 5G segments in India in the last four quarters?
All the industries are interested and are looking at 5G because they see an opportunity to improve efficiency and reliability, as well as safety or maybe to change their business model, besides of course, offering seamless experience to customers. We have done a survey with Omdia involving 300-plus enterprises in India and, out of that, more than 52% have said that they will use 5G within the next 12 months.
On 5G private networks, will your go-to market strategy change?
We have a firm called Cradlepoint in the US and they provide wireless WAN (wide area network) Edge 4G and 5G. They have a complete plug-and-play solution. They offer solutions to connect your site or vehicle or workforce through Cradlepoint to a mobile network. The best use for us was to adopt their go-to market model even for private networks. We will do both. There will be big customers whom we will use as resellers. There will also be one-to-one business relation.
What is your hiring outlook in the coming quarters?
At 26,000, India has the largest share of our workforce in the world. We have R&D centres, global centres production sites, and one of the biggest artificial intelligence centres. We have data scientists, AI experts and one of the three global centres, Global Artificial Intelligence Accelerator (GAIA) in Bengaluru after Sweden and the US.
We recently added 4,000-5,000 consultants on top of the 26,000, as well as thousands of new employees, both directly and indirectly, as we see India as future 5G hub. So, India is really big for Ericsson.
