Ericsson's CEO on outsourcing rumors, sustainability and LTE

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with Ericsson's Carl-Henric Svanberg

Ericsson has been at the center of a number of notable events in the U.S. wireless industry in recent months. The company was selected by Verizon Wireless for the carrier's nationwide LTE rollout, notching major bragging rights in the potentially blockbuster, worldwide move to 4G. Further, Ericsson has been rumored to be in advanced negotiations to take over the operation of Sprint Nextel's network, and according to UBS Ericsson is among a handful of suppliers selected by AT&T Mobility to possibly test LTE technology.

Ericsson's President and CEO Carl-Henric Svanberg sat down with FierceWireless' Mike Dano during Ericsson's Capital Market Days in Boston last week to go over the rumors, the news and Ericsson's view of the wireless industry's past, present and future. The timing is appropriate since, according to Svanberg, "in a year's time we'll probably be the biggest mobile infrastructure provider here in the U.S."

FierceWireless: UBS reported that Ericsson is one of three suppliers short-listed by AT&T for the carrier's trial of LTE technology. Do you have a comment on that?

Svanberg: Well the only comment I have is that we obviously hope we will be selected for that trial. And it's something we can never take for granted because every such thing is a battle on a position. But still we are a supplier to AT&T, so we will hope to be there. ...

Everyone knows that they (AT&T) will select their partners for that trial, and they don't do that out of the blue.

FierceWireless: Can you comment on the rumors that Sprint is in advanced negotiations to outsource its network to Ericsson?

Svanberg: It's not as obvious as with AT&T because we are the big supplier to AT&T. Sprint we've done less business with over the years. But it is well known in the market that Sprint is looking for an outsourcing opportunity and that we are the world leaders for managed services, so it would be a bit odd if we were not involved in discussions with them. But nothing to announce today.

FierceWireless: Changing gears a bit, Ericsson has been involved in promoting green technology and sustainability. Are there any quantifiable market share or revenue numbers related to sustainability and green technology within Ericsson's operations that you can share?

[1]Svanberg: In sustainability you need to look at several dimensions: One dimension is what we do with our own network, and there is hardly today any operator that doesn't focus on sustainability in the equipment, as such, whether its power consumption from the radio base station, whether it's where you can organize your site when you're off the grid--is it through a diesel generator, or can you use wind power, or can you use solar power, or those kind of things--all in order to make your contribution to the world's challenge here. And as I said yesterday, we have reduced the energy consumption in our base stations by some 80 percent over the last eight years--that's of course very significant. But if you take the longer perspective in what we've discussed, how can telecom and ICT (information and communication technology) contribute to more intelligent societies that are more sustainable as such? There, there are no estimates made, but I think that it's a well-realized fact that there is no way that those CO2 savings targets can be made without the deployment of technology. It simply has to be done; we can't save ourselves by just agreeing to drive less or heat our houses less or something. It won't solve the problem.

FierceWireless: But is there anything in Ericsson's financials to reflect green investments?

Svanberg: We don't break it out in that way. But we have done significant work over the last five years, for example, in optimizing sites that are powered by diesel generators. Which, when you think about the world--think about Indonesia, think about India, think about Africa--how many of these sites, in order to create decent population coverage, are off the grid? If you take, for example, MTN the largest operator in Africa: In Nigeria alone they need to bring in one oil tanker a month for diesel fuel just to ship to their base stations throughout Nigeria. We're talking about pretty serious energy consumption here. For an operator in Africa, diesel is the single biggest cost item for them in their entire operation. So R&D for us is not just about shipping megabytes in pipes or over the air, it's also about how to deploy sites more efficiently.

FierceWireless: In your discussions with carriers in the U.S., is there much of an emphasis on green technologies? Do you expect that to change in the future?

Svanberg: It's a growing discussion in the U.S. It has been lesser here. It has actually been more in other countries in the past. It's been quite a while ago, for example, that Chinese operators started to introduce energy reduction requirements on a yearly basis into their networks as part of their RFQs. The focus on sustainability in the U.S. has been less in the past, but it's quickly growing here now. I think everybody understands the impact of green technologies here.

FierceWireless: On another topic, Ericsson has not made an investment into WiMAX. Considering the rapid pace of WiMAX deployments across the world, and the recent finalization of the technology's standard, do you think that was a good decision?...Continue [1]

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