The timing is perfect for India to launch commercial 5G services as demand for consumer and enterprise services will help telcos monetise the investment quickly, says Nunzio Mirtillo, head of Southeast Asia, Oceania and India at Swedish telecom gear maker Ericsson. Mirtillo also says Vodafone Idea has the chance to make a comeback and compete with rival telcos in the 5G domain. Edited excerpts of an interview with ET’s Danish Khan.
With 5G deals in place, what sort of revenue growth does Ericsson expect from India this FY?
India has always been a country which has been on top of our strategic thinking. We have been executing strategy with priority for India, which has always been in the top five.
India is a great place to be in and all leading indicators have been either met or exceeded, be it mobile broadband subscriptions, APRU (average revenue per user) or the push from the government to make digital India. Everything went in the right direction and has exceeded our expectations. 5G is also in line with that. Our business is kind of cyclic like it’s 4G, and now 5G. 4G is still going to be there because both technologies will complement each other. The 5G momentum is building up and I think the timing is just right because 5G technology today is mature, reliable, secure, and competitive. The timing is just perfect.
Have you got new business from Jio on 5G?
Yes, we are engaged with them. We have gone public on the deal with Bharti Airtel.
What about Vodafone idea? Is its financial situation an issue for vendors like Ericsson?
Yes, we are closely working with them as well. The issue with them is that they have not been doing as well as Airtel and Jio, but at the same time, they have a big network. They have a chance to make it right. It’s a matter of what they will decide in terms of investment going forward. They have the 5G spectrum, so they have the possibility to make it. They were searching for investors… They are in the race.
What is the 5G monetisation path for India’s telcos, compared with 4G or 3G?
I think they have learnt from 4G. They will be able to monetise. It’s also our job to make sure that we can help them. 5G has more enterprise use cases, which is an upside. Enhanced mobile broadband is needed and it’s clear. Additionally, fixed wireless access is also a super good upside.
Jio and Airtel are taking two different approaches for their 5G services. Which makes more sense for India at the moment?
NSA (non-standalone mode) or SA (standalone mode) depends on the commercial strategy, and the way they want to go in the market with 5G. But both solutions are working and are stable. So, they can be successful in both, depending on what they want to do.
Will 5G network slicing clash with net neutrality rules in India?
The Indian government wants the country to flourish and if network slicing is going to help enterprises and enable various use cases, they should look at how it can be enabled. I think that when it comes to network slicing and net neutrality, they [authorities] will discuss that and will come up with something that makes sense for India.
Are you expanding the local manufacturing unit to meet 5G demand? Will you be exporting as well?
The number one priority is to make sure that we can deliver to India. We have invested a lot already through our partner Jabil and we will continue to invest to meet the demand. India’s demand is huge, so we are not worried about serving other countries through the Pune facility.
Telcos say equipment is being imported for initial deployment. Is supply chain an issue?
Initially for sure, but we are ramping up the manufacturing. Our intention has always been to localise everything in India.
Supply chain is always an issue if you don’t take care to plan. It’s not anything that you can do overnight. It’s something that you need to take very, very seriously. And that’s what we have done in Ericsson all the time.
Which are the new growth drivers for Ericsson in India?
We have recently renewed our strategy. And, acquired two new companies Cradlepoint and Vonage as a strategic move to create new revenue streams.
Cradlepoint, which provides mobile access to enterprises and is quite successful. They have also taken over the responsibility of private networks, which will pick up with 5G. In India, we did a survey that highlighted 80% of the enterprises want to use 5G in the next 24 months. There is a big opportunity.
We also bought Vonage, which is successful in the world of unified messaging as a service, network as a service. They also have a platform, which is used by one million developers. Why we are entering that business is because we believe it’s strategic that we can provide to our ecosystem as a platform that can use 5G characteristics.
India is a very relevant market for these two areas. There is no better place than India where you can use 5G at scale.
What will be Ericsson’s approach for private 5G networks. Will it be through the telecom operator partners?
It will most probably be both for sure. We can either deliver to the market through Cradlepoint or through the operator. We have been discussing this with all operators around the world. In India, we are currently discussing it… it is a long discussion.
Airports, manufacturing, health, agriculture, and transport are the industries that will leverage the 5G platforms. We will build this platform and I think India will be quite unique. India is among the top three in the world when it comes to startups. It may be the best in the world when it comes to the availability of the young generation that is ready to develop applications. It’s a huge opportunity for India because then what you do innovate for this country, most probably you can export as well.
Is Ericsson focusing on FWA (fixed wireless access) opportunities in India?
Yes. In 59 networks out of the 130 live 5G networks that Ericsson is powering, telcos have launched FWA. So, fixed access has always been a kind of opportunity, but now it’s really happening. We see a huge opportunity in there as well. FWA is a part of the use case discussion with Indian telcos.
Initial 5G launch doesn’t comprise the OpenRAN element in India. Why?
Open RAN will not be a big play in this first wave of 5G basically. The existing RAN solutions are so advanced that it is worth the confidence. But as a company, we are focusing on ORAN as well. ORAN will eventually happen and we will be there.