Ericsson optimistic on China’s 5G role
China will be a primary driving force for the largescale commercial use of 5G in 2020, which will offer a good opportunity for Ericsson AB to expand businesses in the highly competitive market, said Borje Ekholm, CEO of the Swedish telecom equipment maker.
The nation will be among the first places for the industrial internet to take off, thanks to local companies’ strong determination to build important telecom infrastructure and push forward smart factory projects, said Ekholm.
The industrial internet of things business model works on the idea that cloud, security, connectivity and service enablement operate as a combined infrastructure, he said. But most importantly, smart factories with fifth-generation mobile communication technology put smart tools in the hands of smart people.
China is eyeing the commercial deployment of 5G in the first half of 2020, with pre-commercial launches in the second half of next year.
Ericsson is currently working with all three operators in China — China Mobile, China Unicom and China Telecom — on 5G field trials. “We have also successfully passed the Ministry of Industry and Information Technology’s phase three lab test with a 100 percent pass rate,” Ekholm said.
In June, when the global mobile industry completed the first phase of 5G standards, the company made the world’s first multi-vendor standalone 5G interoperability call by partnering with China Mobile and Intel, marking another milestone toward the commercialization of 5G.
5G, which is up to 10 times faster than 4G, will act as an important platform for new technologies such as self-driving vehicles. According to an industry report by EY, the number of 5G users in China will reach 576 million by 2025, or more than 40 percent of the global total.
But despite all of the market optimism regarding 5G, there remains concern that the high cost of 5G base stations, roughly 150 to 200 percent that of 4G base stations, may put big pressure on telecom carriers, according to the China Academy of Information and Communications Technology.
However, Ekholm underlined that there is an urgent need for operators to start building the 5G network. “As data traffic growth doubles basically every eighteen months, by the end of 2019, many carriers’ networks may not be able to meet such a big demand.”
Superfast 5G technology can in fact help operators boost their telecom capacity with lower costs in terms of data traffic, he added.
Ekholm is also a board member at Alibaba Group Holding Ltd. When asked whether he will help form a close partnership between Ericsson and Alibaba, Ekholm said partnerships will emerge when parties have aligned interests.