India to remain 2nd largest revenue market: Ericsson South East Asia head

New Delhi: India will continue to be the second-largest market for Ericsson globally, a top company official said, even as the country’s contribution to the Swedish telecom equipment maker’s global revenue slid to 5% in the September quarter, from 13% the year before, because of tapering of telcos’ capex on 5G.

“India will remain the second largest market,” Andres Vicente, senior vice president for market area South East Asia, Oceania and India at Ericsson, said in an exclusive interaction, adding that Vodafone’s entry into 5G will add to this, even though its rollout may be more gradual compared to Jio and Airtel.

“We are ready to support all operators and believe that 5G will be the more efficient and economical choice for them moving forward,” Vicente said, in his first media interaction after taking over as the region head earlier this year.

He noted that investing in 5G led to 30% spectrum efficiency and cost saving, which will push telcos to move up to 5G from 4G across their networks over the coming years, giving adequate revenue upside to the telecom gear maker.

Ericsson has recently got a contract from Vodafone Idea for 4G and 5G rollout. This is part of a $3.6-billion deal announced by the carrier on 22 September with Ericsson, Nokia and Samsung, where the equipment makers will supply 4G and 5G gear to the telco over three years. The Economic Times reported the deal value for Ericsson alone to be around ₹14,000 crore, but the company did not confirm or comment on the value.

“India’s telecom operators—Jio and Airtel—have already rolled out 5G, and Vodafone Idea will catch up. As data consumption is projected to rise from 29GB to 68GB per user by 2030, operators will need to invest in increasing capacity by adding more sites, densifying the network, and adding more bandwidth,” he added.

The 5G game

5G offers significant advancements over 4G, especially in areas like low-latency applications, which are crucial for technologies like virtual reality, autonomous vehicles, and the Internet of Things (IoT). Additionally, 5G allows for more connected devices, enabling innovations in sectors like energy distribution, environmental monitoring, and industrial automation that 4G cannot support.

Ericsson’s supplies to Vodafone Idea would be done from its Pune factory being operated by electronics equipment maker Jabil, which has been supplying to Airtel and Jio. When asked about plans for exports, Vicente said Ericsson was open to the possibility of exporting 5G equipment from India in the future, but its immediate priority was to support the ongoing 5G deployment for Indian telecom operators.

On opportunities for monetisation by telcos, he said FWA or fixed wireless access had potential for 100 million connections by 2030 from 6 million currently. 

“Enterprises will also adopt private 5G networks and network slicing to cater to their specific needs,” he said, and added that opening networks to app developers through network exposure and APIs will drive even more innovation and monetization. APIs or application programming interfaces enable app development on networks.

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Vicente said Ericsson was already in discussions with carriers to adopt GenAI-based dynamic network slicing opportunities that can help them monetise their 5G networks, making Indian telcos amongst the leading carriers globally to use innovative technologies.

“I’m confident India will be at the forefront. India is one of the few countries with a large 5G user base, and it has been vocal about leading in technological innovation. The country’s focus on 5G, AI, and digitalization aligns with this vision,” he said.

Ericsson will strengthen its R&D investments in India by bringing in 5G network APIs that can be used by industry verticals. On Wednesday, it set up a new R&D team to focus on network APIs at its centre in Bengaluru. It also announced a new venture with several global telcos, including Bharti Airtel and Reliance Jio, to create and sell APIs globally. The venture focuses on innovation by Indian developers and enables them to take their ideas to global markets.