Industry

Spectrum should be available at reasonable rates: Ericsson CEO


Ericsson CEO Borje Ekholm has urged India’s telecom regulator to make spectrum available at reasonable rates, which he said would result in faster roll-out of 5G services. In an interview with ET’s Danish Khan, Ekholm also said that telecom and satcom services will co-exist, but the latter will only serve specific use cases whereas the former will cover the larger population. He also said that allocating spectrum directly to enterprises will lead to further fragmentation, thereby impacting efficiency. Edited excerpts:

How was Ericsson’s performance in India in the Oct-Dec quarter?

It’s a core market where we invest quite a lot to be present. It’s our largest employee base – we have 23,000-plus employees in India. So, for us, India is really important. If you look at the region, in Southeast Asia, Oceania and India – that’s down 13%. And it’s really due to very heavy roll-outs the year before, at the end of the year. We see that naturally in India because you’re migrating from a 4G investment environment to a 5G investment environment. So, it would be a bit slower. But we also are very positive that you will see spectrum allocated in 5G auctions that will ultimately lead to networks being built over time as well.

If the 5G spectrum auction in India happens in July, by when can your telecom operator partners be able to roll out networks, resulting in new business for Ericsson?

If you look globally, the build-out of a network typically starts a little bit before you own the spectrum, for the simple reason that you want to be able to switch-on the network as quickly as possible because it generates revenue. The key thing for India and all regulators in the world is that the spectrum is available at a reasonable price. It’s worthwhile for all countries to actually think about the value the network can provide, from the general economy point of view versus the upfront spectrum prices. So, I think there is a clear trade-off and sometimes, I think, the fast roll-out of a network is undervalued.

How do you view the satellite communications industry’s demand for spectrum in the 28 GHz spectrum? Is that a major bone of contention right now?

There will be multiple access technologies – there will be terrestrial, cellular, there will be satellite as well. We see these will co-exist. And the reality is the scale you have in terrestrial communication is so much bigger that terminal prices come down very fast. And that’s a bit more challenging in the satellite. So, that’s why I think there are going to be different applications demanding different technologies. So, I don’t think one should prescribe one over the other. It’s actually going to be driven by use cases instead.

Several IT companies and enterprises have told the regulator that spectrum for private 5G networks should be given to them instead of telecom operators. What do you think?

Most enterprises down the road need to have broader coverage than only at their own facility. So, some sort of link between an enterprise network and a macro network will be needed. The second thing is, when you look at cellular connectivity, what is the scarce resource? It’s actually spectrum. And the more you fragment the spectrum, the less likely you are to get national coverage. So, there is a trade-off here between getting national coverage and basically the enterprise applications. And, if you think of it from a macro point of view, if you exclude company networks from the macro network, you are probably also going to lower the investment ambition of the macro network operator. So, I do think there is a clear trade-off to be had here and you have seen some countries where you have allocated spectrum to enterprises. Actually, it’s a relatively modest uptake so far. The macro operator can actually give a network slice to an enterprise.

What is your outlook on the Indian market, especially after the relief package by the government?

The healthier our customers, the more likely they are to invest. And the interesting thing with cellular connectivity is the fast growth in traffic. It continues to be very high and that requires you as an operator to actually consistently invest in the network in order to provide the user experience.



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