Ericsson bullish on 5G despite rivals’ doubts
Swedish equipment maker says investment is accelerating even as critics say costs are too high
Ericsson has issued bullish forecasts on the prospects for 5G, predicting commercial launches this year even as rival companies struggle to justify the investment needed for the network upgrade.
The Swedish telecoms equipment provider expects there to be 3.5bn “internet of things” connections running over 5G by 2023, and 1bn consumers on the faster networks, representing 12 per cent of projected mobile subscriptions.
Fredrik Jejdling, Ericsson’s head of business area networks, said the cycle was “happening faster” than he expected a year ago driven by US networks including Verizon and T-Mobile USA that are pushing ahead with launches of the technology.
The bullishness contrasts with the caution of Huawei, a Chinese rival that poured cold water on the move to 5G in April when it argued that consumers would not notice a difference from 4G and that networks would struggle to make money from the technology.
Mr Jejdling said it was reasonable to expect 5G to make a significant difference to consumer experience, given data usage is forecast to rise eightfold in the next five years. He said networks would need to invest in higher-density 5G networks to cope.
He acknowledged that “sometimes we get accused of self-serving comments with these reports”. But “we try to be realistic”, he added.
Three, the UK operator, said this month that the move to 5G networks would be critical to meeting the needs of customers using more data every year. New high-frequency spectrum allows networks such as Three to increase capacity at a lower cost. Dave Dyson, chief executive of Three, said customers on its network at present used an average of 7GB of data a month but that was likely to rise to 90GB by 2025. “You can’t charge £1 a gigabit,” he said. “People can’t afford £90 a month.”
Ericsson believes 20 per cent of global mobile data will be carried by 5G networks by 2023.
The first 5G devices are expected to be released this year in the form of data-only pocket routers. Smartphones able to connect directly to the new networks are unlikely to appear until 2019.
Ericsson has struggled over the past two years and its recovery plans are tied to an uptick in spending by network operators on 5G networks, although few expect the cycle to be as lucrative for equipment makers as the 3G and 4G upgrades that preceded it.
5G will offer faster speeds than older networks but it is its low-latency — the response time of the network — that is expected to pave the way for new applications.
A concert will be held later this month with musicians in London playing simultaneously with a pianist in Berlin using 5G transmission technology.