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Newsletter: Q4 2004

Top Stories

2004 A STRONG YEAR FOR ERICSSON

2004 was a year with strong growth and high margins. It was a year with a number of strategic business wins in both systems and professional services. The Ericsson fourth quarter report for 2004 can be found here.

GETTING READY FOR CANNES

As the leading telecom vendor, Ericsson welcomes you to an interesting week at the 3GSM World Congress in Cannes, February 14-17, 2005. During the conference, we will arrange a range of media activities such as a press briefing, in depth technology roundtables and much more.

PRESS BRIEFING FOR MEDIA AND ANALYSTS
When: Tuesday, February 15, 12.30 p.m.
Registration from 11.30 a.m. and a light lunch will be served
Where: Grand Salon, Hotel Carlton Intercontinental, Boulevard de la Croisette

The press briefing will be hosted by President and CEO Carl-Henric Svanberg and will also be accessible via a live webcast on www.ericsson.com/press and www.ericsson.com/investors.

BREAKTHROUGH WITH T-MOBILE GERMANY

T-Mobile Germany selected Ericsson's GSM/GPRS Base Stations to replace 10,000 GSM base stations (Pressrelease) to upgrade and modernize the existing GSM network.

SHARP AND NEC PICK NEXT GENERATION MOBILE HANDSET PLATFORMS

Sharp and NEC have selected Ericsson Mobile Platforms to supply the mobile platforms for their handsets. Sharp chose the Ericsson quad-band G210 for its GSM/GPRS handsets (Pressrelease) and NEC Corporation selected the Ericsson U100 platform for its WCDMA/GPRS handsets (Pressrelease). For Ericsson, which currently supplies the WCDMA handset platforms for Sharp it is a clear indicator of the mobile platform’s stability and commercial success. It is interesting to note that the U100 platform for WDCMA is used in approximately 30 percent of all WCDMA handsets worldwide.

H3G ITALY SIGNS EXCLUSIVE FIVE YEAR MANAGED SERVICES CONTRACT

H3G in Italy has signed an exclusive five year managed services contract with Ericsson worth €250 million (Pressrelease). Under the agreement Ericsson will be responsible for managing H3G Italy's 3G network and for delivering an advanced 3G-multimedia service environment, including management of the service layer and business support systems supplying to 2.6 million subscribers.

Industry Viewpoint - Clearing the Air with Mobile Softswitching

Falling SMS and mobile tariffs and increasing circuit switched traffic has resulted in many operators turning to mobile softswitching. The simple reason for this development is that operator can reduce core network operating expenditure by 50%. The dramatic reductions in Opex are a result of a combination of simpler and more efficient network design and Ericsson’s experience in implementing over 18 commercial networks. The benefit for subscribers is in the increased capacity, reliability and service offerings. For operators, mobile softswitching is a way to take a step towards an all-IP network by introducing a common and single IP core for all types of traffic.

Circuit switching and exponentially increasing voice traffic is exerting increasing pressure and forcing operators to find efficiencies within the network. Mobile softswitching allows operators to rationalize the network, and minimizing transmission costs.

By separating control and transmission functions to different nodes in the network soft switching allows more efficient network transmission by pushing transmission through media gateways to the network periphery. O&M can then be centralized and core network clusters provide a more stabile network with greater flexibility to create capacity where it is needed. These Opex savings on reduced transmission costs and centralization are clear and persuading factors for many operators.

Opex reductions with softswitching has been touted throughout the industry, however, with more than 18 live and commercial implementations, Ericsson uses their experience to pin-pointed the specific network changes that have halved core network Opex for commercial networks. Results from (they are from different cases) specific cases produced Opex savings in O&M and network design efficiencies (50%), transmission (down 60%), power & footprint (down 70%) and have proven that the hype behind the mobile softswitching promise is real and returning significant savings. Overall the operator reduced their core network Opex by 52%.

A secondary argument for softswitching is the natural evolution of networks towards the provision of more multimedia services and all IP core networks. As more operators look ahead and prepare for an all-IP future, softswitching is paving the way for a smoother transition by utilizing an all IP core network. With the future-proof IP architecture and network structure many operators are looking to softswitching as the first step in all IP migration and a complement to IMS (IP Multimedia Subsystem) implementation. The main drivers for this move are the future revenues from multimedia services to replace the ever falling traffics on traditional mobile services like SMS and voice traffic.

The immediate benefits of softswitching are substantial and center on maximizing network efficiencies. Ericsson worked closely with the operator to reengineer live networks to create more efficient and cost effective solutions. The statistics are proving that a combination of Ericsson’s experience on live networks to find network opportunities coupled with the efficiencies of softswitching are producing impressive results that also complement the next step in the provision of multimedia services. Through the introduction of a layered architecture with centralized operations and a common flexible core network, the Ericsson Mobile Softswitch ensures a common foundation for new consumer services.

Further information:
A whitepaper covering softswitching as part of the evolution to convergence; how operators can capitalize on convergence opportunities, the network considerations; and end-user trends is also now available.

Telebriefing & Presentation: To view Ericsson's mobile softswitching presentation and listen to the telebriefing, please contact: industry.analysts@ericsson.com to register for access.

Telecoms

MOBILE COMMUNICATIONS

3G & 2G CONTRACTS
OUTBACK EXCLUSIVE – Telstra selected Ericsson to deploy the 3G/WCDMA network
(Pressrelease). The Telstra five year exclusive contract with Ericsson is worth approximately USD 78 million (100M AUD). Ericsson will supply layered architecture core and radio access network equipment, including HSDPA and network rollout services.

3G A REALITY IN EUROPE - In the EMEA (Europe Middle East & Africa) region, Ericsson advanced in the mobile market by securing a string of 3G delivery and rollout contracts. In particular, Ericsson made strong headway in Hungary by winning separate UMTS delivery contracts with T-Mobile (Pressrelease) and Pannon (Pressrelease). The future-proof UMTS has a network data speed of 384 Kbits per second and allows a smooth migration to HSDPA (high-speed downlink packet access). Romania’s leading mobile operator, Connex, has selected Ericsson to roll out its 3G WCDMA network (Pressrelease). Ericsson will also supply competence development and technical support for the network. And in Scandinavia, 3G operator 3, extended an existing frame agreement to SEK2.5 billion (Pressrelease) to include the delivery of services related to the core, radio network and transmission equipment in Sweden, Denmark, Norway and possibly Finland. Additionally, MTN in South Africa selected Ericsson to supply its 3G/WCDMA network (Pressrelease) enabling MTN subscribers to experience high bandwidth services such as video telephony, mobile music and TV, as well as wireless broadband Internet access. The network is expected to launch in the first half of 2005.

STRATEGIC WIN WITH CINGULAR - The largest wireless carrier in the United States, Cingular Wireless LLC, has chosen Ericsson as a supplier and integrator in the UMTS build out of Cingular's next generation voice and data network (Pressrelease). The UMTS/High-Speed Downlink Packet Access (HSDPA) packet core and radio network equipment will provide peak data downlink rates of up to 14 Mbit/s and increases the system capacity within the current radio spectrum more than twofold.

EXPANDING CONTRACTS IN THE FASTEST GROWING MARKET - Ericsson has been awarded a string of expansion contracts in China with a GSM network expansion contract worth USD 805 million with Guangdong Mobile Communication (Pressrelease). Additionally, a USD 50 million GSM network expansion contract with Hebei Mobile Communication Co., Limited will expand the network in Hebei Province to 54 million potential subscribers. Under the contract, Ericsson will provide Hebei Mobile with network equipment and professional services. China Unicom expanded an existing contract with Unicom by approximately USD 90 million. The deal includes additional CDMA2000 1X infrastructure expansion contracts in the Jiangsu, Yunnan, Heilongjiang and Liaoning provinces.
INSIDE THE WORLD'S TALLEST BUILDING
Taipei 101, the world's tallest building will be outfitted with an in-building solution from Ericsson. Chunghwa Telecom selected Ericsson to provide indoor coverage (Pressrelease) with an in-building solution for high-quality, seamless coverage that incorporates GSM900, GSM1800, CDMA800, CDMA2000 and WCDMA in a common antenna system. State-of-the-art technology is deployed to ensure seamless coverage even in the world's fastest elevators.

EDGE UPDATE - USA

Ericsson wins wireless contract extension with T-Mobile USA (Pressrelease) to immediately begin expanding and upgrading the existing network to keep pace with consumer demand for GPRS and EDGE data services and ensure a consistently reliable mobile experience. According to the deal, Ericsson will provide GSM 1900 MHz wireless network equipment and network deployment, system integration and support services in 18 strategic T-Mobile markets, including Atlanta, Boston, Miami, New Jersey, Philadelphia and Washington D.C. where Ericsson equipment is already installed.

BROADBAND AND MULTI-SERVICE NETWORKS

IP TV – TELIA TRAILBLAZES FOR SUCCESS
IPTV over ADSL2+ was launched in 15 Swedish cities by TeliaSonera. The press release from Telia Sonera, from January 28, outlined the service which starts from $16 (229SEK) per month for convenient access to the TV channels and online movie rental. The service requires 5Mbps capacity in the access network which is created using an Ethernet DSL Access (EDA) platform from Ericsson.

CRITICAL EXPANSION OF BROADBAND ACCESS PORTFOLIO
An agreement between Ericsson and Canadian-based Critical Telecom (Pressrelease) will expand the broadband access offering to the significant Fiber To The Node (FTTN) market. By integrating Critical Telecom's outside plant remote Ethernet DSLAM into Ericsson's Public Ethernet portfolio; Ericsson will be able to support operators in the delivery of services such as IPTV.

MORE SUCCESS IN HUNGARY WITH MATÁV
Matáv selected Ericsson to deliver its Ethernet DSL Access solution, enabling broadband capabilities for its subscribers (Pressrelease). The IP-based DSLAM uses the latest ADSL2+ technology with Gigabit Ethernet uplinks, Ethernet aggregation switches and BRAS. This solution introduces a new generation of cost-effective DSL broadband services for residential users in high-capacity areas.

ERICSSON JOINS WIMAX FORUM(TM)
As a strong believer in open standards, Ericsson joined the WiMAX ForumTM (Pressrelease) to promote interoperability of the open IEEE 802.16 standard for broadband (DSL and Ethernet) wireless access. “It is a natural part of an operator's Ethernet broadband offering and can also serve as transmission backhaul," said Karl Thedeen, Vice President, Product Area Wireline.

WiMAX technology is optimized for fixed or nomadic broadband wireless access and targets a different segment than 3G that combine mobile broadband and telephony as well as fixed usage. When established, Ericsson plans to offer WiMax as part of the Public Ethernet offering and as a complement to DSL.

BUILDING THE IP BACKBONE FOR CHINA TELECOM
In December, Ericsson was selected to build the next generation IP backbone network ChinaNet Next Carrying Network (CN2) for China Telecom (Pressrelease). The upgrade will provide advanced IP services including Virtual Private Networking (VPN), high-quality IP voice and video streaming. In addition, CN2 will support IPv6 addressing and provide finer control over network traffic routing and quality of service. Ericsson will provide total IP backbone solutions for China Telecom's entire national core network of CN2 and the major part of its backbone network in the southern and western parts of China.

Telecom Services

ERICSSON SECURES MANAGED SERVICES MARKET IN SPAIN

In Spain Ericsson has moved to secure its leadership position in managed services by signing a five year contract with fixed line operator Auna and by acquiring Enditel, a telecom services provider and supplier (Pressrelease). The move provides Ericsson with a stronger managed services offering for customers in the region. The five-year managed services contract includes day-to-day management of field operations for Auna's network.

Mobile media

28 EUROPEAN COUNTRIES WIRED FOR SOUND WITH M-USE

Due to consumer demand for original music services, Ericsson and Warner Music International announced they have signed a mobile music distribution agreement for 28 markets throughout Europe (Pressrelease). With this agreement Ericsson aims to quickly supply the market with new services such as downloadable original music and ring tones via M-USE (More info (.pdf)).

MIDEM - SHOWCASES MOBILE MEDIA POTENTIAL

Ericsson will be showcasing some of its multimedia and music solutions for mobile customers to demonstrate the business potential between the music industry and mobile operators (Pressrelease). The Ericsson exhibition will include demonstrations of mobile music and video services for consumers. These will include M-USE, personal greetings, as well as music-video streaming and Ericsson's payment solution IPX.

TELE2 - ROCKS WITH MUSICBOX

Dubbed "MusicBox", European operator Tele2 launched Ericsson's mobile music service M-USE (Pressrelease) in Scandinavia. M-USE is an integrated, white-label music service hosted, and managed by Ericsson. It allows Tele2 customers to download a wide variety of music content from record labels like BMG, Sony Music, and Warner Music.

BY POPULAR DEMAND - MOBILE APPLICATION AWARDS 2004

In live SMS voting, the audience of the 2004 Ericsson Mobile Application Awards voted for the applications with the most market potential, innovation, consumer friendliness and ease-of-implementation (Pressrelease). The winners included Gavitec AG with Lavasphere, Wayfinder Systems AB with a GPS EuroNavigator, Artificial Life Inc. with V-girl, a virtual life simulator; and Softhouse Nordic AB with Twin Factor.

RELATIONSHIP MARKETING SOLUTIONS FOR MOBILE COMMUNICATIONS

With 1.5 billion subscribers in the world, mobile communications is the new emerging channel for relationship marketing. In response, Ericsson and Proximity Worldwide, a part of BBDO's advertising network (www.bbdo.com) signed an agreement to jointly promote solutions for mobile marketing (Pressrelease). The agreement aims to create targeted communication and service offerings through mobile handsets.

Enterprise update

ERICSSON LAUNCHES PUSH E-MAIL

Ericsson released the answer to the Blackberry organizer with an easy-to-use, device-independent “push” e-mail and calendar, called the Ericsson Mobile Organizer (EMO) (Pressrelease). EMO 5.0 enables easy-to-use access to corporate e-mail and other Personal Information Management (PIM) data on the move without requirements for proprietary hardware, special devices or operator tie-ins. Changes in the mobile device's inbox are instantly mirrored in the user's desktop mailbox, and vice versa. EMO 5.0 offers secure access, with built-in end-to-end data encryption (More info about Ericsson Mobile Organizer (EMO)).

Corporate News and Information

SONY ERICSSON SUSTAIN Q4 GROWTH IN SALES AND PROFITS

Sony and Ericsson reported the consolidated financial summary for the fourth quarter and fiscal year ended December 31, 2004 (Pressrelease). Total units shipped in the quarter increased by 56 percent and reached 12.6 million. Sales for the quarter represented a year-on year increase of 40 percent.

LENDING A HAND AFTER THE TSUNAMI

In the aftermath of the tsunami, Ericsson worked to help in affected areas by donating resources to return communications networks to working order and assisting more immediate communication needs by supplying satellite phones to provide immediate assistance to relief efforts. In the Aceh region alone, Ericsson delivered a container-based GSM system to return mobile communications to normal as quickly as possible. Ericsson Response also donated an entire CDMA network including deployment and support, to Indonesia. Similar efforts are also underway in Sri Lanka, India, Malaysia and other regions affected by the tsunami. Ericsson employees set up collections of emergency supplies and fundraising, even donating their wages to assist those afflicted. Ericsson pledged to match, dollar for dollar, the amount raised by its employees.

UPCOMING EVENTS

INDUSTRY EVENTS

14-17 February 2005 
3GSM World Congress - Cannes, France 

Monday, February 14
9.10-9.35 a.m.
Speaker: Håkan Eriksson, head of Ericsson R&D, and CTO
Topic: The business importance of technical innovations

Tuesday, February 15,
12.00-1.20 p.m. 
Speaker: Bert Nordberg, Executive Vice President, Sales & Marketing
Topic: Strategies for defining new revenue streams
12.30 p.m. 
Speaker: President and CEO Carl-Henric Svanberg
Topic: Analyst and Press Briefing

Wednesday, February 16
2.35-3.55 p.m. 
Speaker: Mats Dahlin, Head of business unit Enterprise
Topic: Demystifying mobile for enterprises – security, speeds, interoperation, vertical applications<

Exhibition: Hall 1, A15


21-24 February 2005
21st Century Communications World Forum – London U.K.

Monday, February 21
09:00-12:00
Speaker: Ragnar Erkander, Director, IP Softswitch and Networks, Ericsson
Half Day Workshop 3: Challenges and Opportunities when addressing the 21st Century

Tuesday, February 22
14:00-15:30 - Session B2
Speaker: Peter Linder, Technical Director Wireline, Ericsson
Session B2: Landline (POTS) replacement - End of The World or a New Beginning
15:45-17:15 – Session C5
Chairperson: Claus Hansen, General Manager, UMA Product Development, Ericsson
Session C5: Unlicensed Mobile Access - The fast track to fixed-mobile convergence.

Wednesday, February 23
09:00-10:30 - Plenary Panel
Panelist: Mikael Strömquist, Executive Vice President, Strategic Planning, Ericsson US
Plenary Panel: The Emerging Wireless Reality: Opportunities and Challenges

To arrange direct briefings please contact: industry.analysts@ericsson.com 


7-10 March 2005
VON - Voice on the Net - San Jose, CA, USA

Thursday 10 March
3:15 PM – 4:30 PM
Speaker: Peter Linder Technical Director, Wireline Networks
Topic: Triple Play Solutions - Voice, Video and Data Scoreboard
website: www.von.com 

14-16 March 2005
CTIA Wireless - New Orleans, USA

Speaker: President and CEO Carl-Henric Svanberg
Topic: Infrastructure Keynote Roundtable

Monday 14 March 
3:30 PM - 5:00 PM, Room 267-277
Speaker: Eric Anderson, Vice President New Sales, North America
Topic: The Nuts & Bolts of Building an MVNO,

Tuesday 15 March
3:30 PM - 5:00 PM, Room 276-277
Speaker: Donna Campbell, Director, Ericsson Mobility World
Topic: Intelligent Mobile Content Management
website: www.ctiawireless.com 

11-15 April 2005
MILIA (TV/Film - digital content)- Cannes, France
Website: www.milia.com

6-9 June 2005
Supercomm Chicago, USA 
 

14-17 June 2005
CommunicAsia - Singapore
website
: www.communicasia.com 

14-18 November 2005
3G World Congress - Hong Kong
website
: www.3gcongress.com 

ERICSSON EVENTS
Capital Markets Day Stockholm, Sweden May 10, 2005
Capital Markets Day Asia Sept. 2005
Capital Markets Day US Nov. 10 2005
More details here


TELEBRIEFINGS
PRELIMINARY TELEBRIEFING CALENDAR FOR 2005
March 2 (Wednesday): Service delivery, hosting of content and consumer focus
April 13 (Wednesday): Enterprise: Ericsson Mobile Office and device management
May 25 (Wednesday): Topic to be confirmed
July 6 (Wednesday): Topic to be confirmed
August 17 (Wednesday): Topic to be confirmed
September 28 (Wednesday): Topic to be confirmed
November 9 (Wednesday): Topic to be confirmed
December 14 (Wednesday): Topic to be confirmed

To sign up for the industry analyst telebriefings and technology updates, please send an e-mail to: industry.analysts@ericsson.com or refer to our website.


CONTACTS & FURTHER INFORMATION
The next newsletter will be issued following the quarterly report on April 22, 2005. Further details regarding the quarterly reports

If you would like further information about any of the stories above or would like to arrange a briefing, please send an e-mail to industry.analysts@ericsson.com or contact Eva Sparr, Rob Elston for North America, or Pia Långström for Europe Middle East Asia & Asia Pacific regions.