Newsletter: Q4 2006

Top Stories
Viewpoint
Mobile devices
Mobile networks
Fixed networks
Telecom services
Enterprise communications
Corporate news
Latest white papers
Events
Contacts & further information

Ericsson has reported another strong set of results, with full-year sales for 2006 of SEK177.8 billion (up 17 percent on 2005) and operating income of SEK35.8 billion (up 8 percent on 2005). Ericsson president and Chief Executive Officer Carl-Henric Svanberg said, "We have concluded another successful year and see continued opportunities to outpace the market. Through our focus on operational excellence, costs continue to grow slower than sales." (Press release).

Sony Ericsson capped a record year with a record quarter, achieving year-on-year volume and sales growth of more than 60 percent and increasing income before tax by 144 percent. The company shipped 26 million units during the fourth quarter of 2006 (61 percent up over the previous year), bringing the annual total to 74.8 million units. Sales for the fourth quarter were 3,782 million euros (64 percent up year-on-year), making total annual sales of 10,959 million euros and income before taxes of 1,298 million euros (Press release).

The Norwegian Broadcasting Corporation (NRK) and Ericsson have launched the world's first trial of personalized mobile TV advertising. The trial sees advertisers employ customized marketing with individual viewers, with content provided by agency partner Proximity Oslo, part of the Global BBDO network (Press release). 

SoftBank Mobile Corp in Japan has launched the world's first live IMS network over 3G, powered by an end-to-end solution from Ericsson. Services delivered over the network include Circle talk (push to talk) and HotStatus (presence and group list management) (Press release).

It is becoming clear that the current multi-play broadband approach isn’t enough for the kinds of interactive, personalized online experiences users are beginning to demand and expect. For the generation that has grown up with instant messaging, video calling and picture messaging, the ability to access, create and share multimedia content from any device is a natural progression. For operators, traditional ‘Triple-play is too little pay’ and too limited for end-users as mobile broadband and converged services become reality. Instead they need a way to deliver Full Service Broadband, in which there are no boundaries between fixed and mobile networks, nor between desktop computers, laptop PCs, TVs and handheld devices.

Broadband is the fastest-growing telecom service ever. There are already some 250 million broadband subscriptions, and Ericsson estimates there will be 1.5 billion by 2011. A large proportion of these future broadband subscriptions will be mobile, driven by the need to connect laptops and other mobile devices to home and enterprise networks while on the move.

While the vast majority of today’s broadband connections are made from desktop computers, we are beginning to see demand for broadband connectivity in other situations with other devices. These include Internet browsing on the move, accessing mobile multimedia services, playing online games, uploading digital photos, watching TV and other video content, and downloading and listening to music.

But today’s multi-play approach does not completely address these user needs. Triple play leaves the mobile broadband service revenue up for grabs by competitors, while quadruple play does not integrate sufficiently to reach the potential of Full Service Broadband in terms of revenue growth and reduced churn.

Until now, access to true broadband has depended on the availability of fixed line telephony or cable, and the proximity to the local exchange. This means that current broadband infrastructure based on ADSL and cable will eventually hit a saturation point in terms of subscriber numbers and service bandwidth.

Telecom operators are in a unique and very strong position for broadband growth through two complementary, evolutionary routes.

The first is to make broadband services accessible everywhere, to as many people as possible, as quickly and efficiently as possible by deploying mobile broadband services over mature HSPA technology. Laptops with embedded HSPA are already shipping, and HSPA networks today support efficient broadband at speeds that match today’s typical fixed broadband services. For operators, it is becoming critical to offer mobility as a value-added complement to current fixed broadband services.

The second is to develop current broadband infrastructure to enable very high bandwidth services such as TV and video streaming. These require the deployment of high-speed fiber and copper technologies such as GPON and VDSL2, together with efficient IP transport networks and intelligent QoS and service delivery mechanisms. The intelligent packet core and multiservice transport solutions and service delivery architecture should support both fixed and mobile access. 

Connectivity, convenience and cost-efficiency

Mobile and fixed broadband Internet access complement each other very well; the challenge is to make it as intuitive and satisfying to access multimedia services from a mobile device as it is from a PC. When that happens, operators will make more money by making any application, content or media accessible from any device, over any network. This will attract new interest from, and revenue-sharing opportunities with, partners in the media and other industries.

Studies from Ericsson Mobility World show that a combined service – one that is available from both fixed and mobile channels – leads to stickiness and increased service usage. For example, operators who also make a successful fixed broadband service available in the mobile channel see a 20 to 50 per cent increase in usage of the fixed service. At the same time, traffic in the mobile channel more than doubles. 

Full Service Broadband architecture must, therefore, provide users with service connectivity and convenience to enable them to access services seamlessly from any device or access network. And for operators, the introduction of services and additional network capacity must come at minimal additional cost.

The new Full Service Broadband architecture must bring broadband connectivity to such devices as laptops, media servers, TVs, video cameras and portable media players, as well as PCs and mobile phones. The architecture must address the consumer electronics industry’s need to achieve economies of scale, while also integrating easily with enterprise environments. It must deliver an open-standard solution that cultivates a common ecosystem – just as the mobile industry has done.

In the new Full Service Broadband architecture, basic connectivity (transport of IP/Ethernet) must be cost-efficient, secure and reliable – not only for enterprises, but also for residential services like IPTV.

User convenience encompasses security, simplicity, personalization, and look-and-feel. For example, the ability to connect a device to a wireless or wired premises network – or to a public mobile network – simply and conveniently is essential to enhancing user satisfaction and minimizing interactions with support centers. The value of such factors grows with the number of devices supported.

The Full Service Broadband architecture needs to support services that are both affordable for users and profitable for operators. It must minimize the cost of introducing services and access technologies, while offering the flexibility to enable the incremental addition of services and access methods. The use of open standards will drive volumes, increase competition and reduce the cost of ownership.

Open standard approach

Ericsson’s Full Service Broadband architecture is designed to meet these new challenges across both residential and enterprise service offerings.

At its core is a reliable, secure and cost-optimized transport network. Overlaid on this are a variety of access technologies, each evolving in support of Full Service Broadband, with access heterogeneity handled through multi-access edge capabilities. IMS (IP Multimedia Subsystem) supports the efficient development and deployment of end-to-end services. User mobility and convenience are enabled through consistent and open interfaces, which also ensure interoperability.

The transport network is optimized for secure, reliable and cost-efficient packet delivery, while also designed to balance the short-term needs of optimizing fixed broadband networks with the flexibility required for Full Service Broadband. It needs to be simple and cost-efficient for operators to add multi-access mobility, new access technologies and new services.

Such an evolved, open-standard architecture is essential to build a profitable and sustainable Full Service Broadband business. It provides the consumer electronics industry with the required economies of scale. It drives usage by offering the user transparency and convenience, by enabling anyone to reach anybody (or any device) at any time, and by making the same services accessible anywhere. It improves cost-efficiency by commoditizing equipment and simplifying interoperability and management. Above all, it encourages a common ecosystem that is beneficial to all parties involved.

You can find more information on Ericsson’s Full Service Broadband architecture in a new white paper here (pdf).

With the growing volumes of WCDMA terminals, Ericsson Mobile Platforms has implemented a multiple supplier strategy for digital baseband Application-Specific Integrated Circuits (ASICs). In addition to its continuing strategic partnership with Texas Instruments, Ericsson has signed an agreement with ST Microelectronics for the supply of ASICs (Press release).

Ericsson and Intel Corporation have announced a joint effort to accelerate the deployment of services and applications on mobile PCs, powered by Ericsson's HSPA mobile broadband and IMS convergence solutions and Intel Core Microarchitecture for mobile clients and servers (Press release).

Operators deploying High-Speed Packet Access (HSPA) technology to bring mobile broadband services to a mass market have several advantages over those who choose different technology paths. The same factors that made GSM the catalyst for the creation of a mass market for mobile telephony also apply to HSPA. The combination of legacy GSM networks, economies of scale and a vast selection of consumer devices will ensure that people will have access to multimedia services, the Internet, TV and games on any screen and device of their choice.

Already, 130 operators in 60 countries have committed to HSPA, which can be quickly and efficiently deployed through a software upgrade to WCDMA networks. With 85 million WCDMA subscribers, no other high-speed radio access technology has a comparable installed base.

Just as important as the high data speeds that HSPA enables is the service integrity provided by IMS (IP Multimedia Services). Together, these new technologies will deliver the service quality users expect and enable broadband services to be available anywhere on any device quickly, cost-effectively and with minimal risk.

In effect, this creates a new global channel for distributing content. Mobile TV is already available on networks around the globe, and music, gaming and online communities that are already successful over the Internet are likely to follow. As the number of mobile subscribers worldwide approaches 3 billion, the potential market for mobile content is phenomenal.

During the quarter, Ericsson built further on its lead in HSPA contracts:

• Ericsson successfully completed an upgrade to HSPA for DNA Finland, the country's fastest-growing operator (Press release).
  
  
• Sri Lankan operator Dialog Telekom chose Ericsson as lead partner for building its 3G/HSPA network, the first of its kind in South Asia (Press release ).
  
  
• 3 Italia and Ericsson achieved a world first with the successful establishment of mobile data connections based on enhanced uplink in a commercial WCDMA/HSPA network. The technology delivered uplink speeds of 1.4Mbit/s - more than triple the previous level - together with potential peak downlink speeds of 14.4Mbit/s (Press release ).
  
  
• Japanese mobile operator SoftBank Mobile Corp contracted Ericsson to expand its WCDMA/HSPA network in Japan (Press release ).
  
  
• Ericsson was selected by Austrian operator ONE as sole supplier to expand and upgrade its WCDMA radio network with HSPA under a three-year contract (Press release ).
  
  
• Entel PCS in Chile named Ericsson sole supplier to bring the first commercial HSPA-enabled WCDMA network to Latin America. Under the contract, Ericsson will also expand and modernize Entel's existing network with its Mobile Softswitch solution (Press release ).
  
  
• Indonesian mobile operator PT Indosat chose Ericsson to deliver a WCDMA/HSPA network in the country (Press release ).
  
  
• 3 in Denmark launched one of the world's fastest mobile broadband networks based on Ericsson WCDMA/HSPA (Press release ).
  
  
• Ericsson introduced the Home 3G Access Point to provide local indoor WCDMA/HSPA coverage in homes and small offices (Press release ).
  
  
• Mobile operator Companhia de Telecomunicações de Macau chose Ericsson to supply its WCDMA/HSPA network in Macau (Press release ).
  
  
• In Sweden, mobile operator 3 switched on one of the world's fastest mobile broadband networks, based on Ericsson WCDMA/HSPA technology (Press release ).
  
  
• The largest operator in the Bahrain, Batelco, selected Ericsson to upgrade its mobile network with HSPA technology (Press release ).
  
  
• French mobile operator Bouygues Telecom chose Ericsson to supply, install and integrate WCDMA/HSPA radio equipment in the Greater Paris area and Rhônes-Alpes (Press release ).
  
  
• Telekom Srbija chose Ericsson to supply and implement Serbia's first WCDMA/HSPA network (Press release ).
  
  
• Kuwaiti mobile operator Wataniya selected Ericsson to upgrade its network with full WCDMA/HSPA functionality (Press release ).
  

Digicel Group, the fastest growing mobile telecommunications company in the Caribbean and Central America, has awarded Ericsson two GSM/EDGE contracts for the provision of nationwide GSM/EDGE networks in El Salvador and Guyana (Press release).

Mexican mobile operator Telcel and Ericsson have implemented the world's first 3GPP standard MSC Pool solution in a commercial network. The technology has been deployed together with the Ericsson Mobile Softswitch solution to increase the effective softswitch capacity, reduce operating costs and provide network-level redundancy (Press release).

In the a multimedia world in which users, industry players, devices and technology combine to create new exciting business opportunities, user experience is the key factor that will determine whether new services will boom or bust. The Service Delivery Platform (SDP) offers perhaps the best service environment to fulfill the needs and expectations of consumers, operators and content/application providers.

Ericsson recently hosted a telebriefing on the growing role of the SDP in helping operators roll out innovative, attractive services quickly and efficiently. You can access archive material from the briefing here (login details required).

Ericsson has been selected to deploy WCDMA 3G by T-Mobile USA under a turnkey contract. The services will be rolled out by T-Mobile in New York City and other markets if it is awarded AWS spectrum (Press release).

Belgian operator Proximus has chosen Ericsson to provide an end-to-end mobile TV solution, including Ericsson's Channel Selector, which will enable Belgian subscribers to enjoy quick and easy mobile TV channel surfing (Press release).

Ericsson has been chosen by Indonesian operator AIS to expand its existing GSM/EDGE network in Bangkok to provide additional capacity and coverage (Press release).

Greenfield operator Warid Telecom International has signed a four-year network expansion and managed services deal to bring GSM/GPRS mobile communications to more than 60 million people in Bangladesh (Press release).

T-Mobile International and Ericsson have successfully conducted the first trial in a commercial network of Adaptive Multi Rate (AMR) Wideband technology among mobile subscribers in Germany. The trial showed that users experienced a considerable improvement in voice quality (Press release).

Ericsson finished 2006 in a very strong position in revenue management solutions. The company is number one in real-time charging, with more than 150 customer installations serving over 350 million subscribers. It also takes top spot in mediation, with more than 290 customers and over 50 online mediation contracts. In addition, the company has 10 contracts for fully convergent charging and billing solutions, with more than 15 operators offering convergent services based on an Ericsson charging solution.

Russian mobile operator CJSC Yeniseytelecom (YTC) has chosen Ericsson's Marconi LH long-haul microwave technology for a trunk radio network as part of the modernization of its transport network (Press release).

Leading fixed telephony operator Ranks Telecom has selected the Ericsson MINI-LINK PDH microwave radio to expand its transmission network across Bangladesh (Press release).

Colombian fixed-line operator ETB (Empresa de Telecomunicaciones de Bogotá) has chosen Ericsson's EDA high-performance broadband solution to roll out ultra-high-speed Internet access, IPTV, IP telephony and gaming services (Press release).

Central China Power Grid Co. (CCPG) has selected Ericsson advanced Optical MultiService 10G and 2.5G SDH transport and switching platforms for its East-West Corridor Optical Transmission Project (Press release).

German operator Versatel has chosen Ericsson's EDA high-performance broadband solution for its nationwide all-IP next-generation access network. The two-year, multi-million euro deal includes turnkey program management, installation, commissioning, integration and after-sales services (Press release).

Cyprus's leading operator CYTA has selected Ericsson for the implementation of one of the world's first truly converged IMS networks, which will deliver combined fixed and mobile services to business and residential customers (Press release).

Vietnamese operator Saigon Postel Telecommunication Company (SPT) has chosen Ericsson as sole supplier of its nationwide IMS-based multimedia network. The agreement also includes Ericsson's Telephony Softswitch and a comprehensive range of professional services (Press release).

T-Mobile Czech Republic has selected Ericsson's MINI-LINK microwave radio solution to provide a platform for flexible, scalable and cost-effective wireless transmission capacity needed to meet demand for new data services (Press release).

Leading digital distributor and marketer of independent music The Orchard has signed a global agreement with Ericsson to distribute full track downloads and master tones from independent labels across Ericsson's global network.  The agreement covers all major territories outside the USA. The Orchard has a catalogue of more than 1 million tracks, representing 73 countries, thousands of labels and every music genre (Press release). 

O2 Ireland has become the first European operator to offer the Ericsson-hosted Napster Mobile music download service. The Irish operator is also the first to launch the Napster Mobile service in i-mode, as well as WAP and Java versions. Ericsson hosts, integrates and manages the round-the-clock operations for Napster Mobile, a service co-developed by Napster and Ericsson that leverages Napster's vast music catalogue and Ericsson's mobile platform and personalization content (Press release). 

For the first time, Ericsson has published a validated measurement of the size of the market for telecom professional services such as managed services, consulting, systems integration, education, support and network rollout. Ericsson's study of the market, validated by Ernst & Young, shows that operators spent USD57 billion on these services in 2005, up from USD52 billion in 2004 and USD47 billion in 2003. This consistent growth trend looks set to continue for 2006 and 2007 (Press release).

T-Mobile UK has selected Ericsson as sole supplier of a dual 2G/3G core network modernization program in the UK. The introduction of the new core architecture based on the Ericsson Mobile Softswitch is an important step towards an all-IP network that will enable the delivery of multimedia services and drive down network operating costs. As T-Mobile UK's prime integrator, Ericsson will take full turnkey responsibility for the supply of equipment, deployment, integration and live migration (Press release).

Management consultancy AT Kearney has awarded Ericsson its global award for Best Organic Growth 2006, based on the growth and strategies of the company's Global Services business unit (Press release).

Indonesian Mobile operator PT Telekomunikasi Selular Indonesia (Telkomsel) has expanded the scope of its managed services contract with Ericsson to cover the management of Telkomsel's multivendor 3G/WCDMA network operations (Press release).

Portuguese operator TMN has signed an agreement with Ericsson and Napster for the Napster Mobile music service (Press release).

TeliaSonera's Spanish mobile operator Yoigo has awarded Ericsson a three-year managed services contract for the operation, management and maintenance of its new 3G network in Spain (Press release).

US mobile operator Cingular has made the Ericsson-hosted Napster Mobile music download service available to its 59 million customers with the launch of its Cingular Music service (Cingular Music press release). 

Finnish mobile operator DNA has selected Ericsson to provide faster, simpler activation and configuration of its customers' handsets through the Ericsson-hosted Automatic Device Configuration service (Press release).

Hewlett Packard (HP) Sweden has implemented Ericsson's One Phone concept, so that each employee has one number and one preferred device to access all the functionality of the corporate communications system, regardless of location.

Ericsson has integrated a platform based on MX-ONE and the MD110 Convergence Communication System with the mobile cellular network to create a unified voice system for HP. The network has been centralized into four main sites through a combination of voice and data network optimization and use of Ericsson Mobile Extension. By consolidating the network and applications into fewer sites, mobile users are integrated into the corporate communications system and mobile usage is expanded in a controlled way. The reduction in terminals and devices, the standardization of voice services and the renegotiated mobile tariffs with the operator have reduced the total communications costs by 41 per cent.

Roland Vejdemo, chief executive officer of HP Sweden said, "With our adapted communications strategy, HP has increased the mobile way of working. By being reachable independent of location or time, we have improved our flexibility. It means we can work in another way - 'always on' - which I am sure will be what customers expect from us in the future." (Success story)

Ericsson has been given Frost & Sullivan's 2006 Product Line Strategy Leadership Award in recognition of the company's success with MD110, MX-ONE and the Mobility Gateway. Frost & Sullivan also recognized Ericsson's mobility offering 'that stands far superior compared with competition'.

"One of the top five enterprise telephony vendors in the market, Ericsson has an installed base of over 25 million lines," said Frost & Sullivan Research Analyst Mr Shomik Banerjee. "Leveraging its strong installed base, Ericsson has a strong portfolio to garner business in the current replacement market."

The Frost & Sullivan Award for Product Line Strategy Leadership is presented each year to a company that has demonstrated the most insight into customer needs and product demands (Press release).

Ericsson and the Stockholm School of Economics have established a program to encourage in-depth knowledge of Chinese business and economics, as well as China's impact on global trade patterns (Press release).

Ericsson has completed its acquisition of Redback Networks Inc., the US multiservice routing specialist. The deal, initially announced in December 2006, will see Ericsson acquire Redback for approximately USD1.9 billion (Press release ).

Ericsson has joined the Business Leaders Initiative on Human Rights (BLIHR), which aims to find practical applications for the aspirations of the Universal Declaration on Human Rights within a business context (Press release).

A new white paper from Ericsson describes how Full Service Broadband architecture provides an open standards-based platform for combined fixed and mobile broadband services that can be accessed from any device and network (White paper).

This white paper from Ericsson outlines how the use of digital control technology in modern power supplies offers significantly enhanced capabilities and performance with new opportunities for cost reduction (White paper).

Telecom network security is becoming a top priority for operators as new high-value services are introduced. This white paper from Ericsson describes a structured approach to implementing network security from the procedural, personnel, physical and technical standpoints (White paper).

This white paper describes the role of service-based C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) in future, network-oriented defense systems (White paper).


For the latest Ericsson white papers, please click here.

7-8 February 2007
FTTH Council Europe Conference
Location: Palau de Congressos de Catalunya, Barcelona

Ericsson is a gold sponsor of this event and is exhibiting.

Wednesday 7 February, 11:50 am
Topic: Driving Broadband: Thinking beyond the Desktop
Speaker: Peter Linder, Head of End-to-End Solutions, Ericsson

Thursday 8 February, 1:45 pm
Break-out session: A Cost-effective Aerial Air-blown Solution for FTTH Networks
Speaker: Tomas Jendel, Senior Specialist Fibre Optic Access, Ericsson

Thursday 8 February, 3:35 pm
Break-out session: Next generation FTTH architectures and beyond
Speaker: Pierpaolo Ghiggino, Research Director, Ericsson Italy

12-15 February
3GSM World Congress
Location: Fira de Barcelona, Montjuic, Avinguda Reina Maria Cristina, Barcelona

Ericsson is sponsoring the mobile entertainment forum.

Tuesday 13 February, 2:30 pm
Topic: Creating next-generation business models
Speaker: Carl Henric Svanberg, Chief Executive Officer, Ericsson

Wednesday 14 February, 11:15 am
Topic: Mobile Entertainment Summit - What Consumers Want
Panelist: Jan Wäreby, Corporate Executive Vice President, Ericsson

Wednesday 14 February, 4:50 pm
Topic: HSUPA - Early Results & Developments
Speaker: Håkan Eriksson, Chief Technology Officer, Ericsson

For further information on Ericsson activities at 3GSM World Congress, please contact Rob Elston.

11 April 2007: Annual General Meeting 2007

26 April 2007: Q1 2007 results

9-10 May 2007: Capital Markets Days

26 July 2007: Q2 2007 results

25 October 2007: Q3 2007 results


For further information about industry analyst activities, please contact industry.analysts@ericsson.com or refer to our website.

7 February 2007: Mobile TV

Please note: these topics were correct at the time of sending this newsletter. Please check here regularly for an updated list of scheduled telebriefings.

If you missed a telebriefing or would like further information, check out the archive where you can listen to the telebriefing, and access the presentation and script here.

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.

Don't forget to check out the industry analyst web site.

We would like to welcome Eva Andersson to our global Industry Analyst Relations team. Eva will be responsible for analyst relations in the Asia Pacific region.

If you would like further information about any of the stories above or to arrange a briefing, please send an e-mail to industry.analysts@ericsson.com or contact Eva Sparr (Global, North America), Frank Puglia, (North America), Rob Elston (Europe and the Middle East) or Eva E Andersson (Asia Pacific).