Taking 5G to the next level in the US demands game-changing moves
- The US 5G rollout has boosted telecom revenues, network performance, and digital inclusivity.
- Ericsson’s USD 150 million 5G smart factory and USD 14 billion AT&T deal underscore our dedication to US 5G advancements. Policy shifts in spectrum allocation and permitting are crucial for sustaining US leadership in 5G innovation.
The introduction of 5G has marked a transformative leap in the US telecommunications landscape, reversing negative trends in average revenue per user (ARPU) while setting new standards for speed and connectivity. Between 2019 and 2023, wireless services revenue surged by 15 percent; earnings before interest, taxes, depreciation, and amortization (EBITDA) margins grew by 3.4 percentage points; and ARPU increased by 5.8 percent.
Furthermore, with postpaid phone churn for tier 1 service providers remaining below 1 percent and the average download speed quadrupling compared to late-stage 4G, a new era of growth and innovation has been set into motion.
As we witness a substantial enhancement in network performance and capabilities with the rollout of 5G, the focus shifts toward leveraging these advancements to address growing business cases.
Fixed wireless access (FWA) has proven to be a solution for bridging connectivity gaps. Since the introduction of mid-band-enabled 3rd Generation Partnership Project (3GPP) FWA services by T-Mobile and Verizon, there has been a remarkable addition of approximately 9.9 million FWA lines. This figure is expected to exceed 13 million by the end of 2025. FWA stands out as a key technology in providing high-speed internet access to unserved and underserved communities across multiple states in the US, thereby playing an essential role in democratizing internet access and fostering inclusivity.
To propel growth and fulfill the stringent requirements of service-level agreement-based connectivity for enterprises, it is essential for us to advance to programmable high-performing networks. This strategic advancement is crucial for transforming the foundational promise of 5G into a tangible reality for enterprise networks, thereby ensuring continued leadership in the wireless sector. Meanwhile, global counterparts like China are already exploring and commercializing these advanced capabilities, delving into new business cases, devices, and technologies, underscoring the urgent need for us to maintain a competitive edge.
Investing in the next era of 5G
As the US stands poised to capitalize on these advancements, the focus is now shifting toward the enterprise sector, where the potential of 5G remains largely untapped. Transitioning to 5G standalone (SA) and 5G advanced is crucial, enabling features such as network slicing and reduced capability (RedCap) devices to meet the stringent demands of enterprise applications. This strategic shift not only promises to enhance network reliability but also establishes 5G as the backbone of industrial and commercial innovation.
Ericsson, a leader in 5G technology, is at the forefront of this shift. With a strong presence in North America, bolstered by strategic investments and a robust workforce of over 8,000 employees, Ericsson continues to drive technological excellence. Our commitment is further exemplified by our initial USD 100 million investment in a state-of-the-art 5G smart factory in Lewisville, Texas. This investment not only underscores our dedication to American manufacturing but also enhances our capabilities to produce cutting-edge technology, compliant with the Build America Buy America Act (BABA).
Following a recent USD 50 million expansion, this factory has become even more pivotal for our relationships with major US carriers and for fostering innovation in 5G applications, from massive multiple-input, multiple-output (MIMO) radios to advanced radio access network (RAN) compute platforms. This strategic investment highlights our resolve to keep America at the forefront of the 5G revolution, making the US market a beacon of technological innovation.
A testament to our success is our landmark USD 14 billion deal with AT&T to create a programmable and open 5G network.
A spectrum road map is needed to sustain US competitiveness
5G is not just a technological upgrade—it is a critical infrastructure essential for innovation across consumer and enterprise sectors. As a committed leader in the US market, Ericsson recognizes the urgent need to address foundational issues to spur the next wave of technological advancement. To fully capitalize on the potential of 5G and drive further growth and innovation, it is crucial for the US to prioritize two key policy areas:
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Provision of more mid-band spectrum
The US has established itself as a global leader in wireless technology, largely due to the availability of wide-area, full-power licensed spectrum. At present, there is a significant gap in the US spectrum pipeline, particularly in the mid-band range, which is crucial for 5G technologies. Without access to additional spectrum, the US risks falling behind, potentially losing its competitive edge in developing future wireless innovations. The absence of new spectrum allocations could also severely hinder the development and deployment of 6G technologies. -
Streamlining zoning and permit processes
To accelerate the deployment of 5G infrastructure, it is imperative that local governments streamline zoning and permit processes. Despite 60 percent of Americans having access to 5G on their phones, only half of the long-term evolution (LTE) sites are equipped with 5G mid-band capabilities nationwide. Additionally, the density of these sites, even in densely populated areas like Manhattan, significantly lags behind leading nations, such as South Korea. With the current permitting procedures taking up to 12 months in many areas, the pace at which the US can enhance and expand its network infrastructure is insufficient to meet the growing connectivity needs.
A call to action for a connected future
The introduction of open network application programming interfaces (APIs) will unlock new values and enable the creation of new industries as existing capabilities of the network are exposed and new ones are added further on in 6G.
T-Mobile has launched a 5G network slicing beta for developers who are working to supercharge their video calling applications with the power of 5G SA. With a customized network slice, developers can sign up to test video calling applications that require consistent uplink and downlink speeds along with lower latency, near-real-time responsiveness, and increased reliability.
With Verizon, we will collaborate on developing new network APIs for developers globally. Verizon network APIs, which will be introduced to the Vonage platform, will enable the developer community to access network services and capabilities
The time for bold action is now. As Ericsson spearheads the transformation of 5G capabilities, we urge policymakers, industry leaders, and service providers to join us in this critical phase of growth. By investing in technology, streamlining regulatory frameworks, and ensuring a robust spectrum pipeline, we can unlock unparalleled opportunities for economic and technological advancement.
Let’s solidify the US’ position as a global leader in 5G technology and pave the way for a connected future. This is 5G made for the US, in the US, by Ericsson. Let’s build this future together.
Delve deeper into how Ericsson is building the future of 5G in the US through strategic investments:
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