Ericsson is investing to be competitive in India, says CEO Borje Ekholm

Ericsson will invest strongly to remain competitive in India as it believes success in the fiercely competitive market can be a template for success in other markets, chief executive Borje Ekholm told Kalyan Parbatin Barcelona. Ekholm, who assumed the reins at the Swedish telecom gear maker over a year ago, said in an interview that the company would also bolster its ‘Make in India’ engagement by churning out radio network gear at its Pune facility for both the domestic and select Asian export markets. Edited excerpts:

Is Ericsson impacted by consolidation in India? Do you foresee any job cuts?
Of course, consolidation impacts Ericsson’s business in India. We recognise that the whole Indian telecom market is very competitive, which has led to the consolidation. But we are continuously investing to solve the needs of our 2G, 3G and 4G customers there. Also, emerging global opportunities in 5G are expected to drive meaningful growth for Ericsson in India as well. We believe carriers now need to position their networks to be 5G-ready. So what you need to do is look at the core of the network, the OSS (operations support systems), the billing systems, your RAN (radio access networks). And since our 5G-ready networks will also support 4G, it is one of our competitive advantages that will help recover market share.

Did you talk about early 5G auctions with telecom minister Manoj Sinha? 
The 5G spectrum situation is a global problem and not India’s alone in that the relevant 5G spectrum bands need to come first globally. India has some fragmented spectrum. But the key thing is to start thinking globally about harmonising both mid-band and high-band airwaves (for 5G) because if you want global scale, you have to have harmonised spectrum. Low band spectrum is largely harmonised, and it will also eventually be deployed for 5G, although that’s going to take a little longer.

Where does India figure in Ericsson’s global scheme of things?
India is a very important and a big market for us. We run most of our network operating centres from there. We also have a lot of systems integration work done in India. It is also important from a market point of view, for products. The reason for that we believe is that if we can be competitive in India, we know we can be competitive in other parts of the world as well. So we are investing to be competitive in India.

Will Ericsson teams in India be closely involved in development of 5G standards globally?

We already have 5G test beds together with the IITs. We are also running field trials on 5G in India, which is important for us to build a competence base there. The telecom minister said

Ericsson has promised to step up its local manufacturing plans under the government’s ‘Make in India’ initiative. Can you share some details about this?
We currently do local production of radio network equipment like base stations in Pune, but we will now increase production at the Pune facility to cater to the needs of both domestic and key Asian export markets such as Thailand, the Philippines and Vietnam from India.

What are Ericsson’s immediate priorities to revive revenue growth? 
Our first priority is always stability, then profitability, and then growth. So, last year, we focused on getting stability in the business, basically stabilising market share, stabilising our products and starting to position ourselves for growth, which is what we did with a focused global strategy. For instance, we increased investments in R&D, which should now lead to profitability, and, after that, we get growth.

Has the profitability focus led to a decline in revenue from Ericsson’s core business segments such as networks and managed services? 
No, the reality is that when we embarked on a focused strategy, it meant we would defocus or deprioritise certain parts too; that of course leads to sales reduction. At the same time, the RAN market also shrunk by about 8% last year, which builds pressure. So as we exited other areas, sales reduced. economictimes