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Adopting 5G a ‘matter of survival’ for telcos: Ericsson

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Even as domestic telcos struggle to come out of their deep financial troubles, Swedish telecom equipment-maker Ericsson said it is a “matter of survival” for them to embrace 5G. The domestic telecom industry is still reeling under financial woes inflicted on them by the entry of the deep-pocketed newcomer Reliance Jio’s aggressive play and analysts are divided over when can a revival happen.

A senior official from Ericsson acknowledged that the lowest average revenue per user generated by the domestic telcos is the “real challenge”.

“It is more a matter of survival for our customers to move into 5G,” said Ludvig Landgren, Head of Network Applications and Cloud Infrastructure for Southeast Asia, Oceania and India, told reporters. Speaking on the sidelines of a company event, he said the need to switch over to 5G is because of the financial benefits the newest generation of communication offers.

The cost per gigabyte data use for a telco will be much lower with 5G, he said, pointing out that Indians are one of biggest consumers of data in the world at present. He claimed the costs will be 10 times cheaper per GB of data usage and that his company is coming out with offerings such that only software upgrades to existing infrastructure will be required for companies to transition.

It can be noted that India is yet to sell its 5G spectrum and there is a point of view which calls for deferring the same due to the financial difficulties the operators are facing, wherein they recover the cost on previous generations well before transitioning to the new.

It can be noted that Jio’s entry as a 4G network from the beginning fastened the adoption of the new-age telephony in the country and led to considerable troubles for incumbent operators who had secured 3G spectrum by aggressive bidding.

At the event, Ericsson executives cited a survey to claim that a third of consumers will leave their operator “immediately” if competition starts providing 5G, while another third will wait for six months before migrating. Even as multiple use cases, including driverless cars and drone deliveries get spoken about, the company officials said mobile broadband will be the primary driver for 5G adoption in the country.

Meanwhile, the company signed up the largest operator Vodafone Idea as a client to deploy cloud packet core to enhance its network performance. Landgren said this is significant because it used to work with the erstwhile Idea Cellular but not with Vodafone. On when Ericsson, which already counts as Bharti Airtel as a customer, will start working with Jio, he said it has already demonstrated its abilities to the Mukesh Ambani-company.

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