Part 2: ''In a few years mobile networks will look more like the Apple app store''

Ibrahim Ahmad

Christian Hedelin, VP & Head of Strategy, Network Products at Ericsson shares details on how the company will make their way in India’s mobile networks, and what are some of the network innovations that the company is working on.

With so many operators competing in India and 4G in its early phase of deployment, innovation will become critical here. What kind of innovations do you see, and what are some of the innovations that Ericsson is working on?

What we have in focus, for the radio or the mobile or the wireless, of course, is to get the most out of a finite spectrum. We have been doing significant amount of R&D for allowing as many users as possible to utilize a narrow spectrum band. That has been our fundamental innovation to get the cost down for mobile services. So, compared to only 10 years back, we have reduced the cost. In 2005, the cost of producing gigabyte was USD 10 and now we are down to less than 10 cents for a gigabyte network. Another innovation, and this is sometimes overlooked and forgotten, is that as a company we have worked hard to lead the standardization work to allow harmonized technology development. This has been an important contributing fact to allow for affordable mobile phones. So, the SIM 8 model with 3GTT standard has allowed us to produce affordable high performing mobile devices and it is one of the contributing factors to allow billions of mobile subscribers. However, this is not enough. We will continue to work towards bringing down the cost through spectrum efficiency and coverage aspect of mobile networks.

Apart from spectrum efficiency, our other innovation is energy efficiency. We have developed systems both on the handset side as well as mobile network side to consume significantly lower amount of energy to allow off-grid deputations without tremendous cost to generate power. First, we have made the network from ‘always on’ to ‘always available’. So, the individual part of the network goes to standby mode or sleep mode as soon as it is not needed and we do this gradually. This means that we can have load-based utilization. We have also allowed for the network to have discontinued transmission. This is also where we save a lot of battery on the mobile phone side as it doesn’t need to transmit all the time, it just needs to transmit when it’s required. So, we are bringing down the cost of devices, improving the energy and network usage. Now the applicability of off-grid modular based mobile network has gone from a couple of percentage points to a large part of the network. It is economically feasible. This is very relevant for India too.

Another important area that we are looking forward to is to have programmable network to allow for local innovation. A programmable network will allow the local players to customize the network on the basis of use cases and applications that they can benefit from. In a couple of years, the mobile networks will look more like Apple app store, where local innovators can produce applications in the network.

We are partnering with large industries to see how we can program their networks in such a way that it helps their business model. We are working with industries such as mining, automobile, shipping, public safety, and government bodies, etc. We are working towards allowing the mobile networks to do much more than voice, text, and data.

Will something like this not bring more power in the hands of users than the operators?

I would like to rephrase it, by saying that we need to tap innovation. It does not only come from infrastructure providers like Ericsson nor only from the operators. We also need to tap the innovation coming from the industry and consumers. This is what we are looking at as part of our future 5G networks.

We are now witnessing unprecedented growth of data in India and this has been putting a lot of pressure on the network. What is your recommendation for operators?

First of all, operators must efficiently exploit their network resources and ensure that any surge in data traffic has little impact on the quality of the user experience. Data and video traffic optimization may involve several steps, including caching, content adaptation and policy enforcement. Second is to differentiate the subscription offering so that they can fully penetrate into different customer segments. It can be differentiated according to subscriber behavior and usage pattern based on need (enterprise versus consumer), location, time of day and other parameters such as the requirements of a specific application type — high bandwidth and reliability for streaming video compared to best-effort delivery for a movie downloaded at night. The consumers should be able to choose the services basis their affordability, needs, and smartphone features. Local players can choose to focus on the segments where they have expertise. This is where we are working with our clients and our consumer lab organization to understand even at consumer level- how to best define these differentiated offerings.

Networks are often blamed for the poor quality of service that we see across India. What is the international scenario on quality of services?

It has always been about three key parameters why consumers go to certain operators: The quality of service together with the price are the two most important factors. Now we have seen the majority of churn is due to the quality of service rather than price and we always work closely with operators to find how we can help in improving their quality of services. But network coverage is also an important factor. Sometimes it is not on top of an operator’s agenda. For example, they may not want to build rural coverage due to low returns on their investment. Second is capacity and we help our customers navigate through this. There is always a balance between how much investment you made and the amount of revenue that you generate out of it. We build more precise analytical capability in the network so that we can pin-point in the network operation center where there is poor quality of service and what to do about it. In a fast growing market like India, and with the rapid emergence and pickup of 3G and 4G phones, quality of service becomes important. We are doing everything we can to help our customer. So, investments made in the quality of services certainly has its own rewards. It brings more customers and helps in retaining them.

On Voice over LTE (VoLTE), we have got RJio with its pan India infrastructure, and it has got mixed user reactions. How it is doing in the other parts of the world?

The most advanced market for Voice over LTE is South Korea. They have nationwide deployments of Voice over LTE. The business case for doing that is, they have shut down their old CDMA circuit switch infrastructure. They have done a lot of phasing by allowing all the old legacy circuit switch networks to be closed. This is not the same in most of the other markets where we have Voice over LTE. The coverage in LTE is around 50% of the global population; the rest of the population in the world is on circuit switch backhaul. In general, you can say that all the operators of Voice over LTE are replacement of voice over 2G and 3G. How quickly they can do it, is defined by the coverage they have on LTE. The coverage and penetration in South Korea is 100%.

Read part 1 of the interview here...