Spotlight: Q&A with Ericsson CTO Hakan Eriksson

Ericsson’s growing presence in the North American market is set for further expansion in the coming months as the infrastructure and technology giant this week announced that its current CTO Hakan Eriksson would begin heading up the company’s IP business based in San Jose, Calif., also known as the heart of Silicon Valley.
With the new position, Eriksson, who will maintain his CTO position, will succeed Bert Nordberg who was recently named president of Sony Ericsson.
After the announcement, Eriksson talked with RCR Wireless News about what he expects from the new role as well as the impact the move will have on Ericsson’s operations in North America.
RCR Wireless News: Can you describe the new position and its importance within Ericsson?
Hakan Eriksson: The move is really based on the convergence of fixed, mobile and the Internet. If you look at mobile networks, this year data traffic has surpassed voice traffic and is basically exploding, growing at a rate of about 12% per month. That means a big impact on the mobile networks as well as a need to transfer this traffic onto the fixed networks. We want to make sure there is a harmonious relationship between the fixed and mobile networks and that the data being transmitted goes to its most efficient path. We’ve been driving this for a long time from Europe, but now we see with our growing presence in North America through our acquisition of Nortel, our network outsourcing agreement with Sprint and our acquisitions in the Silicon Valley area that we need a stronger presence on this in North America.
The second part is the cooperation with our partners. We are going more and more into a world where we don’t develop everything ourselves so we work with embedded hardware and embedded software together with companies like HP, Intel, Oracle and Sun and others. We think being more in tune with what they are looking for and in turn what we are looking for that the move to Silicon Valley allows for greater discussions and that’s a very important part of this move.
The third part involves the whole application industry and a lot of this is coming out of North America. For a long time the main application has been voice and the main device has come from Nokia. So for a long time we have has the applications and connectivity coming from Nokia and Ericsson out of Europe. Vertical forms like the Apple iPhone have been creating a lot of application generation and basically becoming the leading phone in the industry. And we are seeing more operating systems with Google’s Android and many other players, so a lot from the applications side is coming from Silicon Valley. On top of that there are a lot of devices that are pure laptops on the mobile networks. Before it was the mobile phones being connected to the networks, and now we have laptops as being the main source of usage. When someone has a laptop connected to a mobile network they end up using it like they would when connected to a fixed network and that translates into a lot of data.
The convergence, the partnerships and the application industry with the app stores coming out of Silicon Valley shows that it’s important for us to have a presence there. With these operations in Silicon Valley along with our operations in Stockholm we will be able to bridge the models and drive our strategies even more.
RCRWN: Any crossover with Sony Ericsson?
Eriksson: Ericsson is one of the few players in the industry that operates on both sides of the air interface. We have the base station business and the network business, we have the chip business with ST and Ericsson and the device business with Sony Ericsson. We also do the modules that go into the laptops so we are in the mobile Internet devices and the laptops. We will be working with all those divisions, but also with other device manufacturers. We want to make sure there are lots of devices with connectivity.
RCRWN: What impact will this move have for Ericsson’s focus on the North American market?
Eriksson: There is a lot that will feed off of each other. We have T-Mobile and AT&T that have been on the GSM track for some time and they will be an important focus for us. With Verizon going with LTE we will also be working very closely with them on their plans. And with the outsourcing agreement we are working with Sprint. We have also been working with Rogers in Canada for a long time. With all of these agreements and partnerships in place we have become the leading technical vendor in North America, so it makes sense that we also have a strong presence on the technology side with our move into Silicon Valley. So it’s a good combination to have the strong presence in North America as well as to actually be there so we can get the feedback on their requirements and to present our solutions to them.
And with our acquisition of the Nortel CDMA assets we are now part of the North America CDMA market. That is good in of itself, but also as with many CDMA operators looking at a similar path that Verizon decided with on going to LTE we can work closely with them.
RCRWN: Do you see any partnership opportunities with the established cable companies in the North American market?
Eriksson: In our multimedia business we have Tandberg that we acquired a few years back, and that comes from the cable industry and moving into the telecom industry. So we already have good relationships with the cable industry. But, they are also looking to get into mobile and as we are the leading vendor to the mobile space we are approached by anyone looking to get into the mobile space.
RCRWN: What sort of impact do you think Ericsson’s stronger presence in the North American market have on the mobile space?
Eriksson: We are a global player so it’s important for us to have a presence in North America, but that does not mean that we are giving up any presence in the rest of the world. It makes us stronger to bring our focus on convergence to our global operations. This move to convergence is not going to happen only in North America as the solutions we come up with in North America will be needed everywhere that the explosion in data usage happens. We might not have such an emphasis on the fixed part of this as we will in North America, but there will be need for backhaul that could be over microwave links or in some cases over fiber depending on which is most cost effective. In our portfolio we have both solutions available.
I think if we have this discussion five years from now we might not be so clear on what is fixed and what is mobile. Those things will become more blurred as you build fiber to a base station that may be just 50 meters or so away from its users. And in other cases there might be fiber into the home that will be connected to Wi-Fi. Both of them are wireless options, but both are being fed by fiber. We may call one fixed and may call one mobile out of tradition, but in reality they are both.