2010-02-15

Vestberg foresees industry shift

• 3 billion new mobile broadband subscriptions in next five years
• Industry focus on network capacity and quality
• Innovation, speed and flexibility key success factors

Speaking at Ericsson's (NASDAQ:ERIC) press conference at the GSMA Mobile World Congress in Barcelona Hans Vestberg, President and CEO, said, "Our future success will be determined by the ability to see beyond technology, stay ahead of our customers and solve their problems before they are even aware of them. This will require us to always put our customers first, always have the best competence and to drive innovation throughout the customer relationship."

"In the past decade telecommunications have become the nerve system of the world. The number of mobile subscriptions worldwide has grown sixfold to 4.6 billion. Mobile broadband has had its breakthrough and we believe that we will see 3 billion new mobile broadband subscriptions in the next five years.

"We forecast that by 2015 mobile PC subscriptions will have grown six times and the traffic generated will grow more than 50 times compared with the end of 2009. In the same time period smartphone devices will grow four times and the traffic they generate will have grown more than 25 times. The rapidly increasing traffic puts a focus on network capacity and quality.

"We envision 50 billion connected devices by 2020. Patients will be remotely connected to hospitals, trucks will be online with logistics centers for efficient routing, and city students will be connected to students in rural villages halfway around the world. Several operators have already established machine-to-machine departments to meet these demands. In this development we have to move from traditional telecom to IP, from hardware to software and from network rollouts to network evolution.

"HSPA and 4G/LTE will enable the 50 billion connected devices and the continued traffic growth. Several leading operators have given us the confidence to deliver their 4G/LTE networks and we have established technology leadership and scale advantages.

"The overall LTE package with products and services is very competitive. We have taken these products to mass production and can manufacture on a large scale, which is a clear competitive advantage. The competition is fierce, but we can have grounds for having good self-confidence."

Following the recent win with AT&T Ericsson now supplies its 4G/LTE solutions to operators that have a total of some 240 million subscribers. In the audience was Mr John Donovan, Chief Technology Officer at AT&T who briefly commented on his company's plans for its LTE buildout and the reason for selecting Ericsson as its LTE equipment supplier.

Hans Vestberg continued, "In 2009 we significantly strengthened our position in North America. The rationale for the acquisition of the Nortel CDMA and LTE operations was to extend our footprint, expand customer relationships and gain a profitable CDMA business in North America. As the integration progresses, we are seeing opportunities for further CDMA business also outside North America.

"As the industry again moves into new territories, our role as a vendor must shift from just being a technology and services supplier to being a business enabler. Operators are looking to us to manage the increasing complexity of their networks so they can concentrate on enhancing the user experience. Our continued success in this area shows the value of our services offering. We will have to combine our strong technology leadership position and services capabilities to provide value to our customers. We have to drive innovation in both technology and business models," concluded Vestberg.

Hans Vestberg, President and CEO

Information about the company: Telefon AB LM Ericsson