Ericsson has been faced with a massive uptick in mobile network usage and the company expects 5G services will be accelerated due to the ongoing pandemic affecting nearly every country across the globe. The Swedish company expanded its forecast for “5G subscriptions from 2.6 billion to 2.8 billion by 2025,” continuing that some advancements will take place by the end of 2020.
This prediction contradicts comments made earlier this year, when Ericsson executives laid out concerns that 5G deployments could be delayed in Europe due to the pandemic. The initial comments stemmed from concerns that surrounded the ability to get access to operators amid restrictions put in place to slow the spread of the virus.
“We are working hard to do what we can to contribute to the efforts to contain and slow down the pandemic. In our new common reality, the importance of strong and reliable communications networks is greater than ever,” CEO Börje Ekholm said.
“Fortunately, the impact of our supply chain has been so far limited and we’re closely monitoring the situation and ensuring we have plans in place to increase our resilience,” he added. “Even when a country goes into lockdown, our engineers are still active in order to keep the networks up and running.”
Ekholm added that they’ve seen several “transformative changes” the past two months. Changes including a transfer in usage from business areas to more residential areas with about an “average traffic increase of about 20% in many networks.” He went on to thank engineers and operators for adapting and to these changes quickly without hindering service.
Ericsson is not immune to remote workforce challenges thousands of other businesses all over the world have had to adapt to. The company is addressing these short-term hurdles by increasing investments in development and research and fast-tracking its own shift to digitization powered by an 85,000-strong remote workforce.
“More than ever, connectivity is key,” Ekholm said. “With the spread of COVID-19, fixed and mobile telecommunications networks have become an even bigger part of the critical infrastructure, showing the importance of quality in the connectivity. But today’s demands for network quality and capacity are not really new developments. In fact, they have been driving market demand for a lot longer and to a much greater extent than most will probably realize.”
Ericsson’s most recent data implies that the higher-performing networks “are also the lowest churn and highest average per user” compared to competitors with more difficult infrastructure. They always presumed that network capacity is important and they now have the research to back it up.
Ericsson’s most recent data suggests that the higher-performing networks “are also the lowest churn and highest average per user” when compared with competitors with a less sophisticated infrastructure. “We have always believed network quality matters and now we can show it with data,” Ekholm said.
“We expect quality mobile connectivity to be of even greater importance in the 5G era. 5G offers service providers an opportunity to gain first-mover advantage and create a significant network performance gap compared to the competition,” he said. “Put simply, the next three years will determine the 5G business landscape.”
Ericsson finished the first quarter of the year with 86 commercial 5G contracts and 29 live 5G networks. Ekholm informed shareholders that the company expects a “tad softer second quarter” because of the ongoing COVID-19 pandemic.