We sat down with Hannes Ekström, Head of Strategy BNEW at Ericsson (pictured), to talk about 5G slicing trials, the Vonage acquisition, Open RAN, and what 6G might look like.
You’ve now had the green light from US authorities to buy the cloud and API specialist Vonage. $6.2 billion is a huge amount of money, can you talk around the plan to integrate the firm into your operations and what that will help you achieve?
We see a great opportunity in the in the ability to expose network capabilities towards developers and Vonage, by their own rights have a large base of developers who are developing APIs today. And so the marriage of Ericsson and Vonage… we believe we can be the catalyst together to make these APIs mobile and expose these mobile APIs to the developers.
The marriage of Ericsson and Vonage… we believe we can be the catalyst together to make these APIs mobile.
It’s going to require a bit of change of mindset in a lot of enterprises, but I definitely see a great potential in in this business. And if I look beyond the API standard for Ericsson at large, of course we will be capitalising on that future as well from a network perspective, when it comes to network slicing and building out capacities and general connectivity. It’s not only about changing the way that enterprises consume the network services and pay for it, it’s also of course about driving a need for a stronger foundation for 5G connectivity.
You’ve had some success with 5G network slicing trials with Telefonica recently – howe close are we to rolling it out in a commercially available form?
I think there will be different variations of network slicing and different use cases going all the way to mission critical use cases, such as connecting an ambulance driving through the streets of London to a highly specialised doctor. That’s obviously a very advanced use case in all fairness we’re probably a bit away from.
I think that the mission critical life or death type situations [are] probably a bit away but we can get started now. It’s viable technology today.
What I typically tell our customers is don’t wait for that ambulance use case. There are other things that we can do, one example is what we did with FarEasTone and Google – basically it’s two slices being built up to the network. One is carrying your enterprise traffic, the other one is carrying your personal traffic and you can have different termination points. You can have different levels of security, and you can have different charging for the two. And I think that there’s a good use case to get started, and that one is not far away. I think that the mission critical life or death type situations [are] probably a bit away but we can get started now. It’s viable technology today.
Ericsson has partnered with Qualcomm and Thales to work on satellite based 5G. Can you describe the project and the potential in that space?
One of the challenges that we see in a market like Europe is building coverage cost efficiently. To be honest it’s not only 5G, the state of the networks in certain geographies is far from optimal today. So we are collaborating with various players like the ones you mentioned on offering solutions to alleviate [this]. I think another interesting potential that we’re also looking into is high altitude masts. What can you do with hundreds of metres high mast when it comes to coverage of 5G mid band? We need to innovate as an industry on these topics to provide the base coverage.
Then of course, you can complement that with capacity in various shapes and forms. But I think in many cases, it’s really about getting a cost efficient base coverage out there that utilises a big amount of in a broader geography. That’s the challenge with 5G Today, it’s so vastly different across the world. In South Korea I think we’re closing in on 100% pop coverage of 5G mid band, probably about 60 to 70% are massive MIMO units in the networks, and then in certain geographies in Europe like Germany, it’s extremely limited. So I think there is space for this type of innovation.
A forecast by Dell’Oro Group expects Open RAN to account for 15% of the total RAN market by 2026 – how do you see the sector at the current moment in terms of how quickly its being realised and in terms of how united the telecoms industry is on how to proceed forward?
We are a main contributor we are supporting the technologies at large. When it comes specifically to LLS, which is probably the most infamous interface of them all, what we say is that from a security perspective, from an energy efficiency perspective, and from a performance perspective, we as an industry are not there yet. We cannot see today that we or anybody else can build anything that will match what we do on our current global portfolio. And hence, we come to the conclusion that the only way to drive openness into the industry at scale will be to work on the standards and then build.
So to that end, we are contributing with a work item, a study item into the ORAN Alliance to enhance this Lower Layer Split interface, together with operators and other industry players. But until that is finalised, we don’t see how we will be able to drive a global deployment of an ORAN Alliance based product. I just want to reiterate that global piece because once you get the global into it, then you are able to build cost efficient products, energy efficient products, because you can invest into ASICs for this product portfolio and that drives energy efficiency. This global scale is the way that we as an industry have connected 6 billion people to through 3GPP based technologies today.
When it comes specifically to LLS, which is probably the most infamous interface of them all, what we say is that from a security perspective, from an energy efficiency perspective, and from a performance perspective, we as an industry are not there yet. We cannot see today that we or anybody else can build anything that will match what we do on our current global portfolio.
If we are fragmenting this by doing 3GPP based technologies, Open RAN in a different camp, different players and so on, I think we are just passing on a cost and a burden to end consumers and essentially from a sustainability perspective to the planet as well. So for us, we embrace openness, the three components – cloud RAN, intelligence and an open interfaces – there are some parts of that that we believe we need to enhance as an industry before we are ready to go all in on those interfaces.
Coming back to your question about the uptake, I think there is another complexity that is surfacing and it’s very evident in what is coming out in the media – it’s about integration, how to integrate these networks, and we are not surprised that these issues are popping up. We are not being very vocal about it because it doesn’t serve any purpose for us to be so vocal today. But when we look at our R&D spend, of course, a very significant part of it is on integration. Just given the resources and money we are investing on integrating between our in house interfaces and nodes, it’s not surprising to us when we when we look at the industry at large [to see] what is happening now and the type of timelines that are coming out of it.
So I think the 15% [figure], we think there’s probably a lot of uncertainty in that. We speak to Dell’Oro as well and [they acknowledge] that the near term future will tell to what extent the industry is able to get these Open RAN based solutions out at scale.
We’re still in the middle of a supply chain crisis, how is Ericsson dealing with that at the moment and what would you say the impact is on the telecoms sector in general?
First of all how we are dealing with it, one obvious way is of course building resiliency and inventory on key components. That’s pretty straightforward, but I think what we are finding is that the uncertainty for our suppliers is also increasing. Meaning their ability to supply to us will fluctuate much more significantly today than it had before. So what we are actually engaging on is quite large R&D efforts as well to remove dependencies so that we can become more flexible over time, not only in the in the inventory build but also in the sourcing dimension. Because we believe we need that that flexibility in the sourcing to be able to build true resiliency.
And then it’s obviously about digitization of the supply chain to have a better real time view, the ability to predict, the ability to sense demand and shape demand… it’s also going all the way back to the customers as well – we need to as an industry incentivize our customers to clarify their demand at an earlier stage. It all goes into the full supply chain. But I think the implications on the industry, there may be over time a situation where lead times will differ depending on what type of product you buy, maybe even pricing.
Basically it’s a risk and maybe customers and different players will need to pay a premium potentially for predictability.
Basically it’s a risk and maybe customers and different players will need to pay a premium potentially for predictability. I think this is the new reality where if you take it back all the way back in the supply chain, the more and more unpredictability you add into it, obviously there will be there will be players who are able to pay maybe a premium to get predictability into it. But it’s for sure disruptive to a large extent.
What would you say is the potential impact of cloud and AI systems on the telecoms market in the next decade, and what will be the other main disruptors?
AI is definitely big. We are we are looking into, from a software perspective, algorithms for energy saving, for traffic steering, for interference management. You name the function and we are building these functions already today. Then from an automation perspective, all the frequency bands we are putting into the networks, all the all the different elements – we have NSA we have SA we have 5G, we have 4G traffic steering between them, and network slicing you mentioned as well – the complexity [of] just managing of all these network elements and configurations… for sure there’s value in it, but we need to make it make it efficient as well.
Otherwise first of all it will not happen, even if it would happen it won’t be cost efficient for our customers in the end. I think this is where the intelligence piece of the Open RAN discussion we just had – non-real time RICS and the ability to automate – will be key for the industry and enhance our investment and product announcements in the space.
We talk a lot about 5G, but we’re starting to talk a little but about 6G as well. What do you think will be distinction between the two and what will 6G allow for that 5G does not?
We will always continue to innovate on the connectivity piece with higher frequency band, larger chunks of spectrum and so on. Faster, better, and so on. Higher frequency bands, larger bandwidth, that technology will continue to evolve into that space. That’s why actually I think millimetre wave it’s such a good litmus test in the 5G space, as to what is actually the performance we can get out of it, and how does that translate into a sort of five year, six year perspective on where the technology is heading.
There are certain technologies in sensors, in the automation that we discussed in processing AI and so on, that will erase the boundaries between the physical world and the digital world.
But then I think there are certain technologies in sensors, in the automation that we discussed in processing AI and so on, that will erase the boundaries between the physical world and the digital world, and I guess this is sort of where the whole metaverse discussions are. And I think we see a lot of those types of technologies coming into play in a 6G timeframe and context. So I think it will not only be the connectivity space, but also from a from a more of a networking perspective, the ability to erase these border lines, or blur these border lines at least, opening up for a new set of use cases as well. I think those are some of the main things that we believe [are] in 6G context as well.
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