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Advancing broadband everywhere
Together again - Ericsson and Marconi
January 24, 2006
Record rapid growth in broadband demand has created opportunities and challenges for an expanded Ericsson, now combined with parts of Marconi acquired on January 23.
Widespread, rapid uptake of broadband, with a Compounded Annual Growth Rate (CAGR) of 94 percent between 1998 and 2005, exceeds even the previously record-quick adoption of mobile telephony, which grew at a 32 percent CAGR upon its introduction. Broadband is already a standard in offices worldwide and increasingly in homes. Ericsson estimates that nearly 200 million subscribers had broadband access at the end of 2005. Industry analysts predict that figure will grow to nearly 400 million subscribers by 2009.
Johan Bergendahl, Ericsson vice-president of marketing, says that 3G systems and technologies such as High Speed Downlink Packet Access (HSDPA) have removed bottlenecks in the air interface, making delivery of mobile broadband access at speeds comparable to fixed broadband feasible. Bergendahl says: “Broadband is likely to remain one of the fastest-growing segments in the telecommunications industry for years to come, and represents a huge opportunity for mobile operators, too. Helping our customers succeed with mobile broadband is a key priority for Ericsson, and the addition of Marconi’s optical competence is another enabler in this process.
“The success of broadband, both fixed and mobile, brings additional traffic through the access networks and into communications hubs that typically use fiber to carry these signals to switching centers,” Bergendahl says. “Ericsson has been working with Marconi on optical transmission solutions in areas including Synchronous Digital Hierarchy (SDH) and Dense Wave Division Multiplexing (DWDM), for many years.”
SDH and DWDM are technologies used by communications services providers to transmit voice, data and video traffic over fiber optic communications networks. Marconi was a pioneer of SDH technology following its introduction in the early 1990s, and has continued investing in optical transmission and transport technologies –including related network management solutions – ever since. As demand for broadband data services increased, Marconi evolved to become a strong player in the optical Ethernet segment. This evolution is evident in the portfolio of third generation telecom quality Ethernet products now entering the market. Today, Marconi is recognized as one of the leading SDH and DWDM transmission suppliers in Europe, proactively paving the way towards carrier grade all-IP networks.
Many Ericsson turnkey solutions that include Marconi transmission products have been delivered and deployed in communications networks around the world. Additionally, Marconi has delivered Ericsson microwave solutions in Germany and other countries. In Spain last year, Ericsson installed a Marconi DWDM optical platform for Telefónica de España with 12 long-haul routes that extend high-capacity coverage nationally.
Luis Fernández Vega, head of optical networks at Telefónica de España, says: “Ericsson, Marconi and Telefónica have a well-established, long-term relationship. Ericsson has been successful because its business has been based on a real partnership, built upon a solid understanding of our market and needs, as well as our customers’ needs.”
Corporate customers in Spain, like those in other countries, have greatly increased their use of intranet, extranet, and internet, mobile and fixed communications services. Demand for broadband connections at home has also greatly increased. As broadband access has become more common in offices and homes, higher-bandwidth applications, services and downloads usage – for example music, games and software updates – has also increased. All this additional activity feeds through the access networks and increases traffic on the backbone transportation network.
Looking to the future, Fernández Vega says: “Important transport projects will be developed in the coming months and years – for example, DWDM Metro deployments, Coarse Wave Division Multiplexing (CWDM), and transport network evolution to optical Ethernet architectures. With this newly-combined product portfolio, Ericsson will have the opportunity to define and build these projects with us.”
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FACTS
On Monday, January 23, Ericsson completed acquisition of approximately 75 percent of the assets of Marconi Corporation plc, while remaining parts stayed with telent plc. On Monday, upon payment for the acquired assets, 6,660 Marconi staff transferred to Ericsson, as did the Marconi brand and Marconi products, which are now part of the Ericsson product portfolio. Marconi's competence, experience and technology leadership, now part of Ericsson, will strengthen the business.
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