Riding a Buildout Wave
A rush to expand and bolster mobile broadband networks in the wake of surging data growth swelled sales for the Swedish gear maker too
The rising smartphone penetration in India has some expected beneficiaries — Ericsson being one. For the world’s largest telecom gear maker, more Indians using smartphones translates into an accelerated need for mobile broadband services, which in turn augments the demand for faster networks.
As per its estimate, India will have 1.38 billion mobile users by 2020, of which LTE subscribers will likely exceed 230 million, or about 17 percent of total subscribers. Anticipating the need for faster data services, telcos are building network muscle. This is good news for Ericsson, which claims to be serving 40 percent of the world’s LTE smartphone traffic.
In India, the Swedish behemoth signed a four-year agreement with Airtel to roll out 4G network in Delhi and four other circles. This is Ericsson’s first LTEFDD technology in Delhi. The contract is over and above its existing collaboration with Airtel to provide 3G services across eight circles. Besides, it also bagged a three-year deal to manage Vodafone India’s optical fiber cable networks in 10 circles covering roughly 45,000 km. The managed services agreement strengthens its partnership and reiterates its focus on meeting the growing need for strong transport networks. Going further, it expects to pocket a few Voice over LTE (VoLTE) contracts this year, considering that the upcoming spectrum sale would drive fresh network investments of the ilk.
Ericsson has been expanding its India presence, and made significant announcements to the effect. These include setting up a manufacturing unit, increas- ing employee base and diversifying the product portfolio to newer areas in ICT, like cloud. Its network business vertical will continue to capture opportunities in the 3G and 4G segments.
India is one of the largest contributors for Ericsson’s overall revenue and the fiscal 2016 was particularly notable.
Ericsson India also had a leadership change with Paolo Colella taking charge in September 2015, after Chris Houghton moved to head North East Asia region.
In September 2015, Ericsson also announced plans to set up its second manufacturing unit, which would double up as an export hub. Conceived with an investment of $15-20 million, the facility in Pune is to be operational soon. The company already operates a facility in Jaipur that makes telecom equipment for the domestic market.
As part of an expansion strategy, Ericsson is also doubling its employee base in next few years. According to officials, the company will add headcount in the services wing, which is rapidly growing.
The company launched its new radio system for the Indian market that delivers energy-efficient and compact radio solution, while maintaining performance leadership at half the size and weight of previous solutions. This reduces site acquisition issues and delivers thrice the capacity density and 50 percent energy efficiency.
The company continues to focus on R&D beyond mobile networks to include IP network, cloud, TV and media. It is strengthening its software capabilities, but consolidating its 4G and 5G network presence will be crucial going further.
India is one of the largest contributors for Ericsson’s overall revenue, driven by increased operator investments in mobile broadband infrastructure and services.