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Ericsson reports strong fourth quarter
Ericsson reported net sales of SEK49.2 billion for the fourth quarter of 2008, 23 percent higher than for the same quarter in 2007. Sales for the full year 2008 were SEK208.9, up 11 percent from a year earlier. (Press release).

Sony Ericsson reports lower sales
Sony Ericsson reported sales of EUR2,914 million for the fourth quarter of 2008, 23 percent lower than for the same quarter of 2007. Full year sales for 2008 were EUR11,244, down 13 percent on the 2007 figure.The decline in sales year-on-year was driven by lower volumes, due to the global economic slowdown that resulted in contracting consumer demand and decreased availability of credit (Press release).

By Niclas Melin, Marketing Director, Revenue Management, Ericsson

The uncertain economic outlook and the market shift towards higher-value mobile data and multimedia services make it vital for operators to secure their revenue streams and manage credit risk. Cash–strapped subscribers are also shopping around for the best-value service packages, and they want transparency and control over their spending.

In this economic climate, mobile operators – and their customers – are focused more than ever on getting value for money and minimizing exposure to credit risk. Already high on most operators' to-do lists, the implementation of real-time, convergent revenue management solutions offers a way to boost revenues, reduce costs and meet customers' desire to manage their spending across a range of mobile services.

Enhancing operator profitability

Enhancing operator profitabilityFor operators, convergent charging and billing solutions enable all subscribers and services to be handled the same way, independent of payment method (prepaid or postpaid) or access medium (fixed, mobile, broadband or TV). This not only reduces operating costs by eliminating the need for multiple, service-specific systems, it also helps with marketing of services through innovative packaging, pricing and support.

To create successful multimedia service offerings, operators need to be quick to market with attractive service bundles and simple price plans. Cross-product discounts, bonuses and rewards are now a vital part of the mix to attract new subscribers, boost revenues and improve customer satisfaction and loyalty in an increasingly competitive market.

With revenue leakage rates between 2 and 11 percent, it makes sense for mobile operators to stem any losses as fast as they can. Real-time charging enables operators to do just this by controlling access to high-value services and limiting subscribers' spending to the credit they actually have in their accounts.

Real-time charging solutions also help operators reduce their exposure to credit risk in what is an increasingly complex service environment, in which revenues must be captured and shared between a growing number of partners – including media companies, Internet service providers and advertisers.

With real-time charging, operators are able to define how much credit they allow each individual subscriber for the purchase of services from partners. This means they can manage risk more efficiently than with non-real-time solutions that allow consumers to accumulate very large bills very quickly.

Putting customers in control

With convergent charging and billing, users gain full control over their communications spending: they can have a single point of contact, and a single bill, for all their fixed, mobile, broadband and TV services. They will also get real-time information on their spending and credit level – so that they will never spend more than they intend, or can afford – as well as up-to-date information on their bundled minutes, bonuses and rewards.

Several mobile operators are introducing hybrid payment schemes. Under such schemes, subscribers are not tied to any contract: instead they pay in advance for one month's use of a specific bundle of voice minutes, text messages, picture messages and other services. Operators are able to attract and retain customers by offering additional free minutes or other services in return for a certain level of monthly payment.

The economic downturn is boosting interest in prepaid mobile services, even in the United States, where they have traditionally been much less popular than elsewhere (attracting 16 percent of mobile users compared with 71 percent globally). Several US operators have recently introduced a range of prepaid plans that include not only calls and text messages, but also a range of media services including music, ringtones, mobile Web, location-based services and games.

High-growth market appeal

One of the bright spots on the current telecoms landscape is the fast take-up of mobile services in high-growth economies in Asia, Africa and South America. The predictions are that some 2 billion new subscribers will join the global mobile community over the next five years.

For the many millions of low-income customers in these high-growth regions, prepayment is a highly attractive option – especially where financial infrastructure is less developed, and people are looking for easy, manageable ways to pay. Here real-time, convergent charging and billing has a big role to play.

Operators need cost-effective solutions that can handle their complete customer base, including the small minority of postpaid subscribers, as well as provide the marketing flexibility they need to provide targeted offerings, avoid price erosion and gain economies of scale.

Another interesting extension of real-time charging solutions in high-growth regions is mobile money transfer. This enables people to refill their prepaid phones with cash, just as they would for airtime, and use this to make cash deposits, transfer money and pay bills. Early pilot launches, and the creative way subscribers have used prepaid balance transfer services, prove that there is big consumer interest and commercial potential here.

Stepwise transformation to convergence

New operators on the market can implement convergent charging and billing solutions from the outset to gain competitive advantage over established operators.

For existing operators, the situation is more complex. It would be unrealistic to set a multi-year evolution plan and execute it without encountering changed priorities and business needs. A stepwise approach that takes an operator's current and ongoing business priorities into account is preferable.

The key will be to roll out solutions that enable operators to implement convergent charging and billing in a way that suits their starting point, business objectives, makes optimum use of existing investments and provides rapid return on investment.

Ericsson in revenue management

Ericsson continues to grow and strengthen its market position in revenue management.

The acquisition of LHS last year enhanced Ericsson's Convergent Charging and Billing offerings. More than 810 million subscribers are charged and billed via solutions from Ericsson and LHS.

Ericsson's real-time charging solutions are the most widely deployed in telecom networks worldwide – catering for more than 700 million subscribers served by more than 155 operators. With more than 350 multi-mediation customers and more than 100 online mediation contracts, Ericsson is also the leading supplier of convergent online event and file mediation solutions. IPX payments are available to more than 2 billion mobile subscribers in 24 countries. There are 132 LHS Customer Care and Billing installations serving over more than million subscribers.

More than 35 operators also base their convergent real-time charging offerings on an Ericsson charging solution.

In the revenue management domain, Ericsson has integrated more than 1,000 real-time charging, convergence, prepaid, billing, payment, mediation, activation, revenue assurance and wholesale solutions.

New revenue management contracts awarded to Ericsson during 2008, excluding expansions and upgrades, include:

• 12 new contracts for Ericsson Charging System
• 9 new contracts for LHS BSCS iX
• 38 new file and event mediation contracts and 20 new online mediation contracts for Ericsson Multi Mediation
• 7 new contracts for Ericsson Convergent Charging and Billing
• 12 new contracts for Ericsson Dynamic Discount solution
• 3 new contracts for Ericsson Payment solutions
• 2 new contracts for Ericsson wholesale charging and billing.

If you would like to discuss this issue in more detail, please contact: industry.analysts@ericsson.com.

TeliaSonera chooses Ericsson for 4G
TeliaSonera chose Ericsson to supply a commercial Long Term Evolution network, initially to cover Sweden's capital Stockholm. The rollout of themobile broadband network will offer the highest data rates ever realized, with unprecedented interactivity and quality (Press release).

Zain Madagascar selects Ericsson for network expansion
Zain Madagascar chose Ericsson to expand its core network and GSM radio access network (Press release).

P&T Luxembourg replaces nationwide WCDMA/HSPA network
P&T Luxembourg selected Ericsson to replace its existing nationwide WCDMA/HSPA access network to enable it to offer its mobile LUXGSM subscribers high-speed mobile broadband services (Press release).

T-Mobile Slovakia chooses Ericsson to modernize mobile core network
T-Mobile Slovakia chose Ericsson as sole supplier for the modernization of its mobile core infrastructure. The new IP-based core network, which will include the EricssonMobile Packet Backbone Network solution and Redback SmartEdge products, will help the operator boost network capacity and manage increased traffic growth (Press release).

3 Scandinavia to offer Europe's first 21Mbit/s mobile broadband network
3 Scandinavia signed a contract with Ericsson toupgrade the operator's HSPA network to 21Mbit/s downlink speeds, which would make it the first in Europe to offer such capabilities for mobile broadband (Press release).

Telstra and Ericsson world-first for 21Mbit/s HSPA
Australian mobile operator Telstraand Ericsson achieved an industry-first activation of HSPA Evolution, capable of peak download speeds of 21Mbit/s, in the operator's NextG commercial network. The world's first data call was also made over the newly-enabled network (Press release).

World's first blade-based mobile softswitch deployed by Telstra
Telstrabrought the world's first mobile softswitch using blade technology – Ericsson's new MSC Server Blade Cluster – into commercial service in its NextG network (Press release).

Maltese provider of home entertainment and telecommunications
Melita has become the first in the world to integrate HSPA mobile broadband into its existing cable TV network. Ericsson acted as end-to-end integrator to add mobile broadband to the service provider's TV, Internet and fixed telephony offerings (Press release). 

Intel and Ericsson collaborate on notebook protection

Intel and Ericsson are collaborating to ensure that Ericsson's mobile broadband modules are interoperable with Intel Anti-Theft PC Protection Technology for notebooks, to offer a secure and reliable anti-theft solution for mobile broadband users (Press release).

Ericsson joins Open Handset Alliance

Ericsson joined the Open Handset Alliance, a multinational alliance of technology and mobile industry leaders, and will support Android software stack on its mobile platforms. Ericsson now supports all major operating systems on its mobile platforms (Press release).

21st Century Technologies to roll out residential fiber in Nigeria
Nigerian operator 21st Century Technologies selected Ericsson to supply, build and integrate a nationwide residential fiber-optic broadband network, which will include the latest GPON Fiber-To-The-Home technology, to deliver advanced high-speed broadband services (Press release). 

New energy-lean, cost-efficient optical packet transport system
Ericsson launched the SPT 2700, a new energy-lean, cost-efficient optical packet transport system, which will enable operators to address the growing demand for consumer and business broadband services more effectively. The SPT 2700 will support operators as they transform their transport networks for new bandwidth-hungry services like high-definition IPTV and fixed-mobile convergence (Press release). 

TM International Bangladesh in spare parts management first
Mobile operator TM International Bangladesh (TMIB) selected Ericsson to provide spare parts management services in support of its mobile network (Press release).

T-Mobile and 3 choose Ericsson to manage UK 3G radio network
Mobile Broadband Network Limited (MBNL), the 50:50 joint venture formed by 3UK and T-Mobile UK to manage the integration of their 3G radio access networks, has awarded Ericsson a four-year managed services contract for the operation and maintenance of the consolidated network (Press release).

Axis selects Ericsson for national network roll-out program
Axis, Indonesia’s newest GSM/3G operator, selected Ericsson as a key partner for the next phase of its national network rollout program. Ericsson will provide network operation and technical support to enable Axis to deliver improved services and greater coverage to its subscribers while reducing operating expenses (Press release).

Bangla Trac chooses Ericsson to manage wireline network
Bangla Trac Communications, an international gateway operator in Bangladesh, selected Ericsson to manage operations of its new switching infrastructure. Ericsson will provide operational readiness and manage the day-to-day operations of the new wireline network providing gateway services for incoming and outgoing international traffic (Press release).

Synchronization in packet-based networks: challenges and solutions

A range of technologies can be used to deliver synchronization solutions in next-generation packet networks. And there may be more than one solution where a network employs multiple transport technologies – for example, in the mobile backhaul. To ensure that the overall business objectives are met, the solution of choice depends on a detailed understanding of the requirements (White paper).

Technical overview and performance of HSPA and Mobile WiMAX

HSPA and Mobile WiMAX employ many of the same techniques, and their performance is comparable in many areas. HSPA, however, is the clear and undisputed choice for mobile broadband services, giving operators a single network for multiple services, a sound business case and access to an ecosystem that currently serves more than 3 billion customers (White paper).

Transforming telecom management – facing the challenge of next-generation networks

By taking a holistic view of systems, processes and organization, operators can transform their telecom management into an integrated business tool for competitive differentiation and efficient operations. To succeed, a stepwise methodology to counter growing fragmentation in telecom management is recommended (White paper).

100GB Ethernet transport: preparing the highway for high-bandwidth services

Looking ahead, it is doubtful whether current transport infrastructures will be able to handle the anticipated flood of IP-based or packet-based traffic. Given the increasing dominance of Ethernet services, 100GB Ethernet represents the next logical step in catering for evolving data rates (White paper).

For the latest Ericsson white papers, please click here.

Ericsson Review 03/2008
The latest issue of Ericsson Review – which covers the latest Ericsson technology research, development and production achievements – takes an in-depth look at the need for strategic innovation, even during a downturn; ‘hyperconnected’ cities, with special focus on Seoul, Dubai and Singapore; the future of television; IPTV; the changing needs of consumers; the rise of the ‘MobileNet’; mobile payments; Telstra’s strategic overhaul of its core network; and telecom patent strategies. (Ericsson Review).

Industry events

February 11–12
FTTH Council Europe Conference
The Bella Center, Copenhagen, Denmark

February 11
Leveraging Broadband to create a sustainable world
Speaker: Don McCullough, Head of Product Marketing, Broadband Networks

February 16-19
Mobile World Congress
La Fira, Barcelona, Spain

Briefing Sessions for Industry Analysts

9 a.m. to 10:30 a.m. February 17
Mobile backhaul – Addressing the capacity crunch
Presenters: Don McCullough, Head of Broadband Networks Product Marketing; David Giaina, Head of Microwave Product Marketing; Matt Smith, Head of Optical Product Marketing

Description: The success of mobile broadband is dramatically increasing the need for backhaul capacity. As new mobile networks are deployed, backhaul is a large part of total deployment and operational costs. This session will address how operators can get the most from their current backhaul networks with low-cost upgrades or take a larger step to an all-IP network replacement strategy.

11:30 a.m. to 1 p.m. February 17

Revenue assurance – helping operators keep what they earn
Presenters: Franck Bouétard, Vice President, Consulting and Systems Integration; Tobias Eriksson, Regional Managing Principal, Western Europe and International Accounts, Consulting

Description: Even when times are good, it isn’t smart for an operator to leave behind revenues it has already earned. In a tight economy, it is nothing less than essential to retain that money and create operational efficiency. This session will look at how Ericsson helps operators to reduce and recover leakage through a comprehensive revenue assurance program and how Ericsson’s consulting and systems integration capabilities improve operators’ business operation efficiency and reduce OPEX.

Seats are limited. To register, please send an e-mail to industry.analysts@ericsson.com indicating the session you wish to attend.

Other conference sessions featuring Ericsson presenters include:

February 16
Seminar: Packet Voice Interworking
Panelist: Alexander Schaefer, Senior Strategic Product Manager

February 16
The importance of harmonization and benefits to the end-consumer
Speaker: Mikael Halén, Director, Government and Industry Relations

February 17
The importance of harmonization; a Middle East & Africa perspective
Speaker: Nicholas Williams, Director, Regulatory Affairs, Southern Africa

February 18
Telecom TV – Panel discussion broadcast: 3G evolution to LTE
Speaker: Håkan Eriksson, Senior Vice President and Chief Technology Officer

February 18
The importance of harmonization; an APAC perspective
Speaker: Michael Bjärhov, Director, Government and Industry Relations, Southeast Asia

March 31–April 2
Broadband World Forum Unwired
Las Vegas Convention Center, Las Vegas, USA

April 1
Panel discussion: IMS and Fixed–Mobile Convergence
Chair: Roger Walland, Vice President, Strategy for Multimedia Applications and IMS, North America

If you would like further information about any stories in this newsletter, or to arrange a briefing, please send an e-mail to industry.analysts@ericsson.com.

Ericsson’s global industry analyst relations team is: Peter Olofsson (Global, Head of Industry Analyst Relations), Kathy Egan (North America), Colleen Rosander (North America) Rob Elston (Europe/Middle East/Africa) and Eva E Andersson (Asia Pacific). Please contact the person responsible for activities in the region in which you are based.

The next newsletter will be issued following the quarterly report April 30, 2009. For further details regarding the quarterly reports, please check here.

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