On October 10, 2018, Ericsson held a 5G global roadshow, starting with Beijing to showcase 5G products and solutions.
Faced with competing products such as Nokia and Samsung, Zhang Zhiwei, chief marketing officer of Ericsson's Northeast Asia region, told the First Financial Reporter that there are differences between the two, but Ericsson has focused on commercial testing in recent years, and its maturity is relatively complete. At the same time, he said that 5G technology will be pre-commercialized in 2019 and will be commercialized in 2020.
In fact, 5G commercialization is being implemented at an increasing speed and scale. In July this year, Nokia announced that it will receive the first largest 5G contract, which will provide $3.5 billion 5G equipment for T-Mobile, the third largest telecommunications company in the US. Zhang Zhiwei told the First Financial Reporter that the $3.5 billion cooperation. Not an exclusive cooperation, the US communications industry anti-monopoly law will not allow. T-Mobile's 5G technology providers work together within a framework that includes end-to-end 5G technology, software and services. However, it is still uncertain about the specific distribution ratios of various households. However, in terms of the difference between competing products, Zhang Zhiwei said that Ericsson products have higher maturity and performance; Samsung has more terminal products, but the performance of base stations is not as strong as Ericsson; Nokia's base stations are not as mature as Ericsson.
According to the analysis of China Merchants Securities 5G industry analysis report, the transition from 2G to 3G mainly realizes the leap from communication to personal application, while the transition from 4G to 5G mainly realizes the transformation from individual to industry application.
As for the relationship between 5G and 4G, Zhang Zhiwei told the First Financial Reporter that it is far different from the direct substitution between 4G and 3G, and that 4G and 5G are more complementary. Because many technologies of 5G are not available in 4G, how to apply them and how to land them still needs to be explored. However, in terms of the number of users, 4G users are still the main force for a long time, while 5G focuses on the industrial Internet. For example, today's 20G 4G traffic and 20G 5G traffic are not fundamentally different for ordinary users. However, it has a significant impact on industries such as VR, AR, industrial applications, and car networking. In short, the overall 5G commercial time is constantly moving forward, and the pre-commercialization in 2019 and the large-scale commercialization in 2020 will not change.
So how is the 5G technology still in the early stage of the industry applied?
Zhang Zhiwei said that it is first necessary to find the use case group —— that is, the industry's strength point, and then prioritize. In the longer term, the 5G industry is more than a technology driver, but an application driver. If there is no landing case suitable for its development, 5G technology itself cannot develop.
Ericsson said that the real-time automation group is currently the largest use case group, which will bring telecom operators $101 billion in revenue by 2026, followed by enhanced video services, which is expected to generate $96 billion in revenue by 2016. Zhang Zhiwei said that Ericsson mainly provides methodologies for operators and cannot give specific answers.
Operators in different regions must first find use case groups and power points to determine the number of base stations and deployment plans. Through the evolution of use cases and use case groups, operators can start to explore the opportunities brought about by 5G Internet of Things and industrial digitalization, and the ultimate goal is to grasp the full potential of the business. Of course, the use case group brings different opportunities, but also has different challenges, including throughput and delay. Different use case groups have different requirements. In terms of reliability and availability, it is necessary to avoid packet loss while maintaining 99.999%. Availability; for local or wide area networks, the complexity of providing functional, infrastructure, and branch cloud resources for use case groups is measured by deployment efficiency.
In July this year, Ericsson released its second quarter earnings report for 2018. The financial report showed that Ericsson's revenue for the quarter was SEK 49.8 billion (US$ 5.62 billion), a decrease of 1% from the same period last year. Among them, network business increased by 2% year-on-year. Although the net loss has expanded from the same period last year, Ericsson’s profitability has improved from the perspective of gross profit margin and operating profit. The gross profit margin for the second quarter was 34.8%, an increase of 6 percentage points over the same period last year; the operating profit margin increased from -1.1% in the same period last year to 0.3% this year.