Displaying items by tag: Ericsson
Ericsson published its financial results for Q3 2019, reporting 3% percent growth in sales. Total sales were SEK 57.1 billion(b)., equivalent to AED 21.5 b. Sales adjusted for comparable units and currency increased by 3% driven by strong growth in North America and North East Asia.
For Q3 19, operating income was impacted by cost provisions of USD -1.2 b. (SEK -11.5 b.) corresponding to a margin of 11.4% excluding restructuring costs, the US investigation costs of USD -1.2 b. (SEK -11.5 b.) and the refund of social security costs of SEK 0.9 b.
Ericsson previously communicated that its third-quarter 2019 results will be impacted by a 12 billion Swedish krona provision. This is due to the investigations by U.S. authorities.
Net income suffered a SEK -6.9 b. loss, also negatively impacted by the investigation.
Free cash flow before M&A was SEK 5.5 b., showing a strong financial position.
Gross margin excluding restructuring charges was 37.8% (36.9%) with improvements in Managed Services, Digital Services and Networks. The gross margin in the previous quarter was 36.7% and 36.9% last year.
Strategic contracts in Networks, with initially low margins, taken to strengthen the market position, are expected to have a somewhat increased negative impact on gross margin short term without jeopardizing the 2020 target.
Ericsson has played a pivotal role in the advancement of 5G technology. Large 5G deployments in China are expected to commence in 2020. Ericsson has invested in R&D and supply chain capacity, aiming to increase market share. Based on historic experience margins are initially challenging but turn positive over the lifespan of a contract.
Commenting on the results, to Börje Ekholm, President and CEO of Ericsson said:
“We continue to see strong momentum in our business, based on the strategy to increase our investments for technology leadership, including 5G… Our focused strategy, introduced in 2017, is aimed at building a stronger Ericsson longer term. With clear focus on our operator customers the strategy stands on a foundation of increased investments in R&D for technology and cost leadership, and growing market footprint. Increased R&D efforts, which will continue, have resulted in a competitive portfolio driving improved gross margin.”
He added, “An important indicator for our execution of the strategy is the improvement in gross margin. The gross margin in the quarter ended at 37.8% compared with 36.9% last year and 36.7% last quarter. Within the 0.8 percentage point sequential decline in Networks gross margin, we have absorbed the margin impact and inventory provisions related to strategic contracts.”
In the report, Börje Ekholm believes their success is driven by the adopters of 5G. He also announced that 5G has taken off earlier than expected.
“5G is taking off faster than earlier anticipated and we see initial 5G buildout as a capacity enhancer in metropolitan areas. However, over time, new exciting innovations for 5G will come with industrial and IoT use cases, leveraging the speed, latency and security characteristics of 5G. This provides opportunities for our customers to capture new revenues as they provide additional benefits to consumers and businesses.”
“Our IoT business is growing almost twice as fast as the estimated market growth of 20-25% per year. We have more than 4,500 enterprises on our IoT platform and the number of connected devices on the platform has more than doubled year to date. To fully leverage our position and capture new recurring revenue streams we are increasing our investments in IoT within Emerging Business. With this investment, we do not expect to reach breakeven for the segment next year, and instead incur losses of SEK -1.5 to -2.0 b”
Vodafone announced switching on 5G in seven UK cities, including London, in partnership with Ericsson. This step puts the UK among the first to launch the fifth generation technology and sheds light on how Europe is lagging behind because of regulations.
Swiss telecommunications operator Swisscom has launched the continent’s first large scale 5G networks in partnership with Swedish vendor Ericsson.
In a statement released by the Swedish telecommunications behemoth it confirmed that the 5G network was launched in 54 cities across Switzerland after the operator secured a license to operate a 5G network in the country.
Ericsson has seen its financial coffers significantly boosted by its success in the North American market following the publication of its Q1 results.
Ericsson CEO Borje Ekholm expressed his delight at the launch of the 5G networks in Switzerland and predicted that the company would up the ante in relation to 5G in the large parts of Asia by the end of this year.
Ekholm said, “To date we have publicly announced commercial 5G deals with 18 named operator customers, which, at the moment, is more than any other vendor. The company would continue to incur costs for field trials and we’re expecting large-scale deployments of 5G to begin in parts of Asia by the end of 2019. Combined, this will gradually impact short-term margins but strengthen our position in the long term.”
Shares of Ericsson rocketed on the Stockholm stock exchange with the company reporting an increase of 3% which represented a four-year high for the vendor.
Ericsson, one of Chinese telecom giant Huawei's main rivals in the 5G market, said earlier this year it hadn't felt any effects from US pressure on countries to ban Huawei's equipment amid fears that it could compromise the security of the mobile phone networks.
Ericsson and Orange have partnered to launch 4G networks in Sierra Leone in the nation’s capital of Freetown which will be providing its residents with fast and reliable 4G access.
Ericsson has reported its first quarter results which reflect an increase driven by the growth the Swedish vendor has registered in North America.
Ericsson President and CEO Börje Ekholm says Ericsson will switch on 5G globally in 2019, backed by a strong, secure and available portfolio.
Addressing media and analysts as he launched Ericsson’s MWC Barcelona 2019 in Barcelona, Ekholm also stressed the role of 5G as a critical national infrastructure, and emphasized the advantages for early adopters.
“We are truly switching on 5G around the world in 2019,” he said.
Ekholm said that Ericsson has announced commercial 5G deals with 10 named service provider customers, as well as 42 memorandums of understanding. The company is already rolling out 5G networks across the globe: in the US, Europe, Asia, and Australia. And he promised more announcements to come.
“Consumers and enterprises are waiting for 5G,” Ekholm said. “According to Ericsson ConsumerLab research, one-third of smartphone users globally will change either immediately or within six months to a service provider that switches on 5G. Today, the US and Asia are leading in 5G development.”
Ékholm said the first commercial scale 5G beneficiaries will be mobile broadband consumers with massive and highly cost-efficient capacity expansions facilitating new applications in augmented reality and virtual reality in areas such as gaming and sports broadcasts.
But he also stressed how 5G would move the industry beyond consumer products and into the industrial internet, citing ongoing collaborations in both mobile robotics and all-electric, autonomous vehicles as examples.
Ekholm also highlighted how Ericsson Radio System hardware has been 5G-ready since 2015 and can be used also for 5G New Radio (NR) with a remote software installation.
This means that Ericsson has already shipped more than 3 million 5G-ready radios to its customers worldwide. Ericsson’s unique spectrum sharing capabilities and common core and dynamic orchestration solutions would put Ericsson customers in the lead with 5G, he said.
“Our unique Ericsson Spectrum Sharing is the most economically feasible way to introduce 5G in existing bands achieving immediate nationwide coverage,” he said. “We can dynamically mix 4G and 5G traffic on the same spectrum. Some said this kind of spectrum sharing was impossible. Wrong! Our engineers are truly world class. With spectrum sharing, our customers have a real 5G frontrunner advantage.”
Ekholm announced that Ericsson intends to acquire Kathrein’s antenna and filters business for mobile networks. This will expand the company’s capabilities and competences in the advanced active and passive antenna domain. Ericsson will be adding around 4,000 highly-skilled professionals in R&D, production and sales based in more than 20 locations, including Germany, Romania, Mexico and China.
Ericsson has joined the O-RAN Alliance, a group of leading telecom service providers and suppliers with the commitment to evolving radio access network (RAN) architecture and orchestration built on openness, intelligence, flexibility and performance.
As a member, the company will focus on the open interworking between RAN and network orchestration and automation, with emphasis on AI-enabled closed-loop automation and end-to-end optimization, to lower operating cost and improve end-user performance.
Ericsson will also focus on the upper-layer function as specified in 3GPP to provide interoperable multivendor profiles for specified interfaces between central RAN functions, resulting in faster deployment of 5G networks on a global scale.
Erik Ekudden, Senior Vice President and Chief Technology Officer, Ericsson, says: “Ericsson is a strong supporter of openness in the industry, and the benefits this has on global ecosystems and innovations. Our ambition is to actively support and drive discussions and developments around future RAN architectures and open interfaces. The O-RAN Alliance is an important coalition that creates an arena for these discussions, complementing other standardization and open-source initiatives in the industry which we are already active in.”
Ericsson has driven, and continues to drive, the industry towards open interfaces as part of its standardization work. The company is recognized as leaders in 3GPP and is actively contributing to several open-source communities including Linux, ONAP and OpenStack to secure open platforms useful for mobile networks.
The company’s engagement with the O-RAN Alliance is based on the future needs of mobile network service providers, and how networks must evolve to enable broad range of services with strong focus on quality, performance and security.
The O-RAN Alliance was formally formed at Mobile World Congress Shanghai on June 27, 2018 as a network operator-led effort to drive openness and intelligence in the RAN of next-generation wireless systems. At the end of 2018, the O-RAN Alliance was opened also for non-service providers to join.
Indranil das, Head of Digital Services, Ericsson Middle East and Africa has outlined a comprehensive 5-step framework that is specifically designed to enable communication service providers to prosper in the ‘digital economy’.
The future is digital, and digital service providers will lead the way. From enhancing the way you engage with your customers to automating operations, service providers reach new levels of programmability, access and agility – levels that digital natives call home.What does it mean to become a digital service provider?
Here is a 5-step framework that can help service providers prosper in the digital economy:
Step 1: Build your Cloud Infrastructure:
Cloud infrastructure is the foundation for 5G & IoT. The scale and performance requirements of 5G and IoT demand a different approach to digital infrastructure. Increase speed, efficiency, and agility in offering new services while reducing risk and shortening lead time while you transform the network.
With an open and pre-integrated NFVI solution which can be deployed both at central and distributed sites and organizations will be better prepared to manage all workloads.
Step 2: Quick Time to Market with VoLTE:
Whether you are a service provider with millions of customers or just thousands of users, you have your own cloud datacenter, or you want a full-stack solution for VoLTE services, there is an industrialized solution that will suit your requirements.
The same is true if you are an MVNO (Mobile Virtual Network Operator) or mission-critical service provider looking for an easy way to get both mobile broadband and voice services over LTE and Wi-Fi ready in your network in one step. You can deploy VoLTE in weeks now allowing a quicker time to market.
Step 3: Boost revenue with digital BSS:
Digital business support systems are critical to uncovering new revenue streams. Customer experience is vital for a successful transformation to a digital business, and digital business support systems are in the center of this change.
Businesses cannot deliver an agile digital customer experience with the transformation of the ‘front-end’ experience alone – it needs to be a complete business transition – to put in place the end to end tools and processes to make real the goal of delivering a truly digital, simple, ‘one-click’ business.
Customers experience simplicity and ease in administering their accounts through the ability to find information online, compare offerings, make online purchases, and get fast and automated deliveries. This results in real, measurable business improvements from simplification including much faster time-to-market and better customer experience.
Step 4: Explore new revenue streams via network slicing:
The IoT era has the potential to transform industry and society, and with 5G on the horizon, countless new business models become a possibility. IoT services come with their own complex connectivity and performance-related challenges.
As such, operators must invest in technologies to meet efficiency and flexibility demands of these new services – making an alternative approach necessary in order to maximize revenue generation. That’s where network slicing comes in – providing the capability to enable new business models across a broad industry spectrum.
Network slicing is a powerful virtualization capability and one of the key capabilities that will enable flexibility. This solution allows operators to segment the network to support particular services and deploy multiple logical networks for different service types over one common infrastructure.
Step 5: Embrace cloud native design principles:
In the next few years all telecom applications will be cloud natively designed so as to increase efficiency and utilization of the cloud infrastructure. Benefits include increased speed of software upgrades and releases plus improved granularity, and enhanced automation through already embedded features in the NFVi layer (Cloud infrastructure for NFV).
Adapted software architecture makes much better use of cloud data center resources. In the case of 5G, the new ETSI standardized 5G Core functions will be cloud native and container based. This is expected to start during 2019.
Ericsson’s digital services blueprint will equip organizations with the tools needed for today’s technological landscape. By finding the right blueprint for their businesses, they can reach new heights of agility, access and automation.
Ericsson has launched its critical communications broadband portfolio for service providers. This will enable service providers to meet the business-critical and mission-critical needs of industries and public safety agencies as digitalization and modernization of land mobile radio communications increases.
When communication is disrupted by minutes, seconds, or even milliseconds, it can have huge consequences for business operations, or serious implications for public safety. The need for fast and reliable communication is therefore paramount.
Such critical communications are used in many areas: from first responders and nationwide emergency services to workforce safety in enterprises. There is a growing demand for business and mission-critical broadband for such use cases. Service providers need to deliver the highest level of availability, reliability and security to meet this demand.
To meet critical communications users’ needs, Ericsson has developed a new portfolio comprising three offerings: critical network capabilities; critical broadband applications;\ and flexible deployments for both local private networks, and nationwide mission-critical LTE networks.
Per Narvinger, Head of Product Area Networks, Ericsson, says: “We see growth opportunities for service providers and government operators by addressing new segments with LTE/5G networks. Our critical broadband portfolio will enable our customers to effectively secure the critical communication needs of sectors such as public safety, energy and utilities, transportation, and manufacturing.”
Critical network capabilities
This offering includes advanced features for critical network performance and covers the following: high network availability; multi-network operation with spectrum sharing techniques; and coverage and capacity for critical applications. It also includes network security capabilities that ensure network services are maintained even when the infrastructure is under attack. Finally, quality of service, priority and preemption all guarantee latency performance and capacity requirements during high load and congestion.
The critical network capabilities include new features that simplify the rollout of broadcasting services across nationwide areas. Another new feature enables radio access sites to operate in fallback mode, should the network connection fail. This offering also includes deployable systems that allow temporary coverage for disaster recovery and operations in rural areas without existing coverage.
Critical broadband applications
This offering covers Ericsson Group-Radio that provides mission-critical push-to-talk, data and video services. This will enable, for example, blue light personnel such as the police to be more effective in performing community services that require advanced mobile broadband.
Flexible deployments for private networks
New business models are emerging for industries. From owning and operating their own networks, critical industries are now procuring private networks and services that leverage service providers’ existing network assets and operations – without compromising required local control.
Ericsson’s flexible deployments for private networks range from network slicing to fully dedicated networks, enabling service providers to offer scalable, critical broadband network solutions and services for critical industries.
Ericsson also offers managed services for private networks, with solutions based on AI and automation that predict and prevent events while reducing OPEX. These solutions enable service providers to reduce time-to-market and onboard new industries, while securing critical service level agreements.
Critical broadband will enable industries to increase efficiency through the following: enhancing workforce productivity and safety; massive onboarding of devices and sensors; real-time location of assets and equipment; and data collection to boost equipment and personnel performance and avoid downtime.
Ericsson has launched a new Artificial Intelligence (AI)-based managed services offering for communications service providers – the Ericsson Operations Engine. The solution is an end-to-end managed services operating model that, through Artificial Intelligence, automation, and the power of data, reimagines network and IT operations, network design and optimization, and applications development and maintenance.
The Ericsson Operations Engine directly and proactively addresses service providers’ managed services complexity challenges as the industry moves to the reality of 5G and IoT.
The Ericsson Operations Engine has three building blocks:
- Service-centric business model based on business outcomes: Using AI, automation and data insights, the Ericsson Operations Engine addresses targeted business outcomes for service providers such as enhanced customer experience, revenue growth and efficiency.
- End-to-end capabilities: delivering on business outcomes through AI-based design, planning and optimization, data-driven operations, dynamic deployment, applications development, and collaborative innovation.
- Components: Best-in-class tools and processes that leverage data, AI and automation as well as expertise and investments in the service provider domain.
Peter Laurin, Senior Vice President, Head of Managed Services, Ericsson, said, “Networks are quickly becoming significantly more complex to operate as we introduce IoT and 5G at scale, and virtualize core networks, while aiming to enhance user experience at the same time. The Ericsson Operations Engine enables us to create sustainable differentiation for our managed services customers as it evolves operations from being network-centric to user experience-centric. It fundamentally changes our way of operating networks from reactive to proactive, leveraging data, automation and artificial intelligence.”
Curtis Price, Program Vice President, Infrastructure Services, IDC, commented: “Managed services will play a significant role in the service providers transformation initiatives taking place worldwide. Nearly 65 percent of service providers indicate that managed services will be key in addressing their main operational concerns around customer satisfaction – improving customer experience is the number one factor that will influence service providers use of managed services – revenue growth and cost efficiency. It's also clear that advanced technologies like AI, automation and analytics represent the underlying pillars for supporting and enabling operational transformation through managed services partnerships.”
The Ericsson Operations Engine, as well as the latest trends and future of managed services, will be showcased by Ericsson at Mobile World Congress 2019 in Barcelona, Spain.