Ericsson Telecoms Forecasts Acceleration of 5G Adoption: Ericsson today, buoyed by a surge in mobile network traffic, said it expects the global pandemic to accelerate the adoption of 5G services beyond previous forecasts.
The Swedish vendor raised its prediction for 5G subscriptions from 2.6 billion to 2.8 billion by 2025, adding that some gains will also occur before the end of 2020.
The raised forecast, which was shared during an online event, contrasts with comments company executives made less than three weeks ago when Ericsson raised concerns about 5G deployment delays in Europe and difficulty in gaining access to operators amid restrictions aimed at slowing the spread of COVID-19.
“We are working hard to do what we can to contribute to the efforts to contain and slow down the pandemic.
In our new common reality, the importance of strong and reliable communications networks is greater than ever,” CEO Börje Ekholm said.
“Fortunately, the impact of our supply chain has been so far limited and we’re closely monitoring the situation and ensuring we have plans in place to increase our resilience,” he added. “Even when a country goes into lockdown, our engineers are still active in order to keep the networks up and running.”
Ekholm noted various “transformative changes” have materialized during the last two months, including a shift in traffic from business areas to residential areas in a matter of days and an average traffic increase of about 20% in many networks. He applauded operators for making those changes quickly and “without major service degradation.”
Ericsson Pitches 5G as Competitive Advantage
While Ericsson remains focused on the long game, it is addressing short-term challenges due to the pandemic by increasing investments in research and development, and speeding up its own transition to digitization fueled by a remote workforce of about 85,000 employees.
“More than ever, connectivity is key,”Ekholm said. “With the spread of COVID-19, fixed and mobile telecommunications networks have become an even bigger part of the critical infrastructure, showing the importance of quality in the connectivity.
But today’s demands for network quality and capacity are not really new developments. In fact, they have been driving market demand for a lot longer and to a much greater extent than most will probably realize.”
Ericsson’s latest research indicates that the best performing networks are also reporting the lowest churn and highest average revenue per user compared to competing networks with more challenged infrastructure. “We have always believed network quality matters and now we can show it with data,” Ekholm said.
“We expect quality mobile connectivity to be of even greater importance in the 5G era. 5G offers service providers an opportunity to gain first mover advantage and create a significant network performance gap compared to the competition,” he said. “Put simply, the next three years will determine the 5G business landscape.”
Ericsson closed the first quarter of 2020 with 86 commercial 5G contracts and 29 live 5G networks. Ekholm, at the time, warned investors that the company anticipates a “tad softer second quarter” due to uncertainty caused by COVID-19.