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Wednesday, May 09, 2007

Observations from Ericsson's Capital Markets Day

I'm in Stockholm at Ericsson's event, mostly intended for financial analysts, but which also has a handful of industry analysts around too.

This post is a "work in progress" - I'll add bits over the course of the next day, rather than put each thought in a separate article.

Thought #1 as I'm going through the presentation deck before the event formally commences. Ericsson sees total mobile traffic globally growing 10x by 2012, to a level of around 4500 petabytes. Seems quite a lot, until 3 slides later, where it forecasts total global fixed traffic... also growing 10x by 2012, from a much higher base, to 350000 petabytes. So let's forget about the hype about "everything's going to be mobile! wireless will the dominant way to get online!". Mobile's about 1.3% of traffic (but much more as a % of revenue obviously), and, roughly speaking staying that way. To quote the Ericsson CEO "the fixed traffic growth is an even more exciting story, to be honest".

#2 - Nice to hear a note of honesty about subsriber/subscription numbers not always being the same, and that multiple subs/person impacts the statistics. Not sure I believe the projection of 5.5bn mobile subscriptions by end-2012, though, unless the average subs/person gets to 1.4 or more.

#3 Fascinating presentation by Sol Trujillo, CEO of Australia's Telstra. They had Ericsson deploy an HSDPA network nationwide, with full backhaul etc, in just a year. Early stats show good usage, ARPU etc. Great stuff.... but.... this case study was for a market that had the availability of 850MHz band for HSPA, which means that the cell sites had range of up to 200km radius, and the signals work well indoors. So a special part of the network built for the Australian railways covered 10,000km of track with just 77 cell sites, and they have adverts showing someone getting good reception in an elevator and concrete car park. According to Trujillo, 850MHz "changed the economics of deployment". That being the case, what does that say for those operators still stuck with 2.1GHz: even where population density is higher, can they create the same sort of proposition? And do they really want 2.5GHz spectrum?

#4 The Multimedia group's presentation spoke to various opportunities around IMS, SDPs, prepay and IPTV among other areas. Worthy stuff, especially the integration of Tandberg in the TV space. What's less clear, however, is whether Ericsson has any exposure to the disruptors - I can't see Google, or Skype, or Joost as buying into the fairly "traditionalist" telco rhetoric.

#5 The new SonyEricsson P1 smartphone clearly fits into the category of "geek gadget". And the summary slide specifically mentioned its VoIP capabilities. So, operators, learn from your lessons with the N95 and don't break it.

#6 At the end of the day, the organisers offered a bribe to try & get attendees to fill in their feedback forms - a shiny new W880 Walkman device. How refreshing to hear the head of Corporate Comms refer to it as a "telephone", rather than "multimedia computer", "mobile office" or similar jargon...


Manish said...

yes indeed 5.5Bn subscribers by 2012 too high. Nokia Siemens Networks disclosed in Barcelona the "vision of 5 billion people connected and ‘always on’ by 2015". This would roughly translate to 5Bn mobile subscriptions on assumption that everyone having a fixed line also has a mobile connection (but not necessarily the other way round)

worma said...
This comment has been removed by the author.
manish said...

sorry that would mean 5Bn mobile subscribers, not subscriptions, by 2015.

Martin said...

To #3: I guess that's why European operators are so keen to get permission to use UMTS in the 900 MHz band together with GSM as soon as possible. UMTS has been tested on the 900 MHz band by Orange in France already. All they are waiting for is the permission by the regulator.