Ericsson CEO warns on mobile data bottlenecks
By Nick Wood , Total Telecom
11 September 2007
Swedish equipment vendor expects mobile subscriptions to reach 5.5 billion by 2012
Network usage for mobile data traffic will eventually overtake voice and text traffic, with bottlenecks already beginning to emerge in mature markets, said Ericsson CEO Carl-Henric Svanberg on Tuesday.
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“The first part of the network to fill up is typically the transmission side,” said Svanberg. However, “it depends operator to operator.”
Commenting at a strategy briefing in London, Svanberg said growth in mobile broadband traffic is now being driven primarily by consumer demand, rather than the deployment of mobile broadband networks per se.
“We can all see that mobile broadband will be a mass market,” he added.
Yet, despite Svanberg’s optimism, he warned that operators still need to be clearer about how they charge consumers for data, particularly when it comes to international roaming.
“You need to understand what you pay when you start to download,” he said.
He also reiterated his view that the European mobile market is in need of consolidation through mergers or network-sharing agreements, adding, “It doesn’t change the underlying need for [network] equipment.”
Indeed, Ericsson has seen no lack of demand for its products, with the equipment vendor now commanding well over 40% of the mobile network market, according to Svanberg, who said he had seen a recent analyst report that put its market as high as 45%.
Svanberg also reiterated he expects the global GSM/WCDMA market to show mid-single digit growth in 2007, and that the addressable market for professional services, of which Ericsson currently has a 10% share, will show encouraging growth.
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Another cause for optimism for network providers is Ericsson’s prediction that global mobile subscriptions will reach 5.5 billion by 2012.
“A lot of that growth is going to come from the big emerging markets,” said Joakim Westh, head of strategy and operational excellence, Ericsson.
Svanberg said that it was important to differentiate between subscribers and subscriptions: “Most of us here are carrying more than one [handset],” he said.
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