Hou Jiyong
Quietly, the world has entered the mobile Internet era. Technology is changing how business changed?
"5 years, mobile Internet users will surpass desktop users." Morgan Stanley report released on the mobile Internet optimistic claim. The report said the world is in the fifth half-century cycle of a major technology.
In this era, China Mobile, AT & T and other telecommunications carriers must we attack; at this time, Apple more than Microsoft's market value to become the first global technology company; at this time, Google, Amazon and others have become ubiquitous global Internet giant; in this times, Lenovo, Tencent youth in emerging markets such eager.
In this era, Ericsson, Cisco's global equipment providers such as how to do? These companies will be dancing the "elephant" or a silent "dinosaur"?
Since January 1, 2010 appointed president and CEO of Ericsson Wei Hans (Hans Vestberg) will not choose silence, just as he faced us talking about the self-confidence. Yes, he loves the most of this era.
"Information communication technology, marked the fifth technological revolution is changing all around us in the near future, mobile broadband will cover all people, and now is in the introduction to our development of a turning point." Wei said Hans here , rely on the back of the chair back micro-Yang.
"Mobile is the result of the electric light bulb in the future we can imagine, that is, almost all equipment will access the network." In his description, the number of all equipment and even may be 50 billion. "We do this 50 billion of the promoters."
Wei Hans in view, the mobile Internet era, the market space as the future of speeds on the same upper limit is your imagination which, like most of the last century when the Internet bubble in early optimism Chung, how the results will ? Will it be a Schumpeter (Joseph Schumpeter) said "creative destruction (Creative Destruction)"?
Vision of mobile Internet era
"21st Century": the development of mobile communications and the Internet changing the world, but a combination of both, more likely to have disruptive in the future. For Ericsson, the mobile Internet mean? As a global provider of sophisticated hardware, how do you exploiting the boundary?
Wei Hans: the first quarter of this year, the global number of mobile subscribers has reached 48 million broadband users has reached 500 million. 2015, when the number of mobile users around the world may be to such a level of 60-70 million, while broadband users will reach 3.5 billion, most of which will be mobile broadband users. With such a large user base, we can see that the future communications infrastructure is basically to cover all places where people live, it will become a turning point in the industry.
Looking back on history, mankind has experienced four major technological revolution, industrial revolution, steam engines and railroad era, power, steel and heavy machinery manufacturing era, cars and mass production era, and now the fifth technological revolution, based on the information marked by communication technology. Every time the history of technological change are actually two stages. The first stage of import, that the first 20-30 years, the introduction of the technology phase of rapid development of new technologies, and is widely used in key areas. Then enter the second stage, expansion stage, at this stage, it will be based on this technology, the deployment of many innovative applications, new technologies are fully exploited the potential of.
The fifth major technical change took place 25 years ago, is the IT technology and information communication technology start. In fact we are at a turning point in the revolution, from the import of the turning point of the expansion. In fact, we have experienced different stages of the Internet, the very beginning that we are on fixed phone to a fixed connection with a variety of locations, and then connect the people, but now with the mobile communication can be between each individual interconnection. Subsequently, our goal is to connect all the things, which is about China's Internet of things. Here we are at a stage of deployment of innovative applications. We are not able to see this vision be realized? The answer is yes.
People who have once thought that only connected devices can be mobile phones, but now looks far more than that, like e-readers already and network connections, there are many machines on the machine's application has now been implemented. Like in the car, there will be wireless communication devices and so on, all is happening. So we say 50 billion in Internet terminal, when in fact we think the mind is how many existing industries through the use of information and communication technology many new applications.
Today, many people have spent two or three terminal devices, such as I, in fact, have the future of personal devices will have more, and that there, but also organic to the machine communications, machine-to-machine connections. Most likely to achieve this machine on machine communication industry, including as energy, transport, transportation, automotive, as well as the media industry. I was fortunate to be and all sectors of people to talk about the future development of mobile communication is what can bring them all industry people agree that mobile communications will bring them significant cost savings and improved efficiency.
Ericsson sees himself as the Internet is that the 50 billion terminal promoter, we also have sufficient resources to do the work. We have the required network technology, especially mobile communications technology, we have a strong professional services capabilities, and multimedia solutions, to provide billing, charges and other systems, also can put 50 billion Internet Terminal a variety of services to market.
Of course, we have ST-Ericsson, which we and STMicroelectronics formed a joint venture production of mobile phone chips, like the Nokia cell phones using this chip, the future of our business to achieve 50 billion terminal is also necessary. Finally, we have this joint venture Sony Ericsson, is the production of the terminal itself, although the phone may be only 50 billion a terminal inside.
HyperTerminal imagine
"21st Century": Yes, now everyone has a lot of terminals, but there are multiple terminals is very troublesome. Is it possible in the mobile broadband environment, the terminal has been integrated, unified? That is, the so-called "super terminal", for example, similar to Apple's iPad or super functional smartphone.
Wei Hans: Of course. In fact, we now see that some terminals have a lot of features, like mobile phones, integrated telephone, video, and some Internet functions and so on. Future in the same terminal will continue to integrate some necessary functions.
We should also realize that there are some specific purpose-made devices, including areas such as machine to machine communication, such as need for communication between vehicles, it would need a special chipset to support the need for specialized terminals. Now more and more cars are software-based, a lot of things are achieved by software. The future based on the wireless network can remotely upgrade the software or the software can be responsible to collect information on car performance of some basic parameters, then pass through the network maintenance center.
Of course, there will be a lot of dynamic information, or use the car this example, say the car can receive various information to select the best route to avoid road congestion. How to get there as the car was the most energy is environmental. If you experience after an accident there, a timely report to the police and so on.
Another example of Ericsson, together with the United Nations in Africa to carry out the Millennium Village project, the project's goal is to eradicate poverty, solve the food shortage. In some African villages, we pass the installation of mobile infrastructure, to enable villagers to enjoy the remote medical services, health care is moving. Although they that area is very remote and very poor, but the medical staff of patients by phone to collect basic data, through the mobile network sends information back to a doctor, the doctor can give treatment based on these data, programs or prescription and so on. Once through the mobile infrastructure in place so far away you can enjoy a quality medical services.
If we look at 2050, our population and the world's GDP will be three times now. What does this mean? Means that the physical infrastructure, you also need to expand three times in order to meet the needs of more people, but also means that pollution will become increasingly serious.
We hope that through the implementation of mobile broadband, able to further improve the efficiency of infrastructure to meet future needs. We estimate the future then, can the deployment of mobile broadband to 20% reduction in carbon dioxide emissions.
"21st Century": many Internet companies into the telecommunications industry. Like Google, Amazon this company, they are exempt through the operator, direct to end user services, which operators will have a more challenging situation. Do you think that the next operator will only continue to do the upgrade speeds yet? How they and the Internet companies competing users?
Wei Hans: Telecom operators face the challenge indeed. But they actually should be noted that, with the future development of other smartphones for network interconnection of the terminal will also have a huge demand. For them, this is a development of space.
As for specific to each operator in the entire value chain, what kind of role play, depending on each operator's strategy may have different business models are likely to get through. Of course, do not forget, we are all dependent on network capacity and coverage are from the operators, so the network for them is a very important asset.
3G took off, thinking 4G demand
"21st Century": I see a new Expo show is achieved through the HSPA + downlink peak rate of 100 megabytes, this struck me. Because I know, now and next year, everyone said that accelerating LTE's commercial, I do not know what you think of the next decade what speeds will be a state? Further, your view of what is 4G?
Wei Hans: Yes, speeds the future may have only your imagination is the limit. 5 years ago, we might be able to say that rate is quite staggering 9 trillion, and had never been seen that when the can if it is more than 100 trillion good thing! And we do not know when, but in fact we have achieved.
We think that HSPA + both uplink or downlink rate can reach the next level of more than 100 trillion. Such as LTE, we have tested this year, but also a live demonstration of the 1G in the downlink. On the future, then, really hard to imagine in the end the speed of the network will be fast.
"21st Century": because from 2G to 3G, it may be driven by technological innovation strategy, from 3G to 4G has a change, more likely to be driven by applications, by business model innovation to drive. I do not know of such a new environment, a new development trend, that is from 3G to 4G Ericsson's strategy will be different?
Wei Hans: From a historical point of view, the early 90s when, 2G was introduced to the market. By 2008, we see that although there had never been seen has 3G, but the 2G network traffic load than the 3G is still great. When in 2001, 3G was introduced into the market, but by 2010, we see that it really took off in the mass market.
Now, we have been discussing 4G. Therefore, if the historical point of view, almost every technology cycle is 10 years to reach its peak. If we are to this point of view, then the future of how we design our network to go, how to design our network deployment, there may be a new way of thinking. We are confident that we can ensure that this network in the future there will be a very good quality and good performance, because we have been and customers posted very close.
Advantages and Strategy
"21st Century": Now in addition to Ericsson, other telecom equipment manufacturers are making the transformation into a service provider, why change? Based on this change, Ericsson's strengths in the wrong?
Wei Hans: Ericsson is the first implemented in all service providers to transition early in 2000, we have established an independent global professional services sector, and even today for so many years, we have economies of scale aspects, but also in people's ability to become the industry's leading companies, is the number one telecom services. Now we have more than 4 million people engaged in professional services, they are distributed around the globe. And all these years, we have the tools in the telecommunications professional services, processes, investments in more than 10 billion dollars.
In our service offerings where there is a call management service, that is, network operations outsourcing. Our global network management services, has reached 410 million users. In fact, this is also related to changes in the entire industry, we are a modern transformation of the network, the network carrying the terminal more and more, the types and number are more and more, this is a challenge to the operators, then they need to have partners such as Ericsson, to have good professional services capabilities to help them address these challenges.
"21st Century": the three major business areas are Ericsson, multimedia, networking and telecommunications services. I do not know which of your business plan, the next three business what should occupy the position, what kind of a mission.
Wei Hans: When it comes to future development, in mobile networks, we have now is the world's first, and the future we will certainly continue to invest in this area, to maintain our technology leadership, to maintain the market first. Professional services in the areas of telecommunications, we are also the market first, of course, the future will continue to invest in this area, to maintain market position, by providing high quality services and train more personnel to provide customers with good service. The third area is the media, this is a huge area of opportunity, in which some of our market segments, including as revenue management, billing systems, etc., the market is ranked first. In these areas, we will continue to invest to maintain our market position. So if the future, we will be three business development continues, and will continue to input.
There is also a business area of the field of IP and converged networks, in this area, we are now is not the first, but we have invested a lot of manpower, material and resources to strengthen our position in this regard. This would include fixed broadband, routing, etc..
"21st Century": to talk about the performance of the company this one. Quarterly sales this year, show or in the fall you may be the financial crisis, the operator cuts in investment factors, prudent attitude has not changed much. I would like to know how to keep your potential market share and position you? There are new breakthroughs? Such as service, solution or outsource this.
Wei Hans: When the end of 2008, Ericsson has already seen the global financial crisis, the industry and will impact on corporate performance. Until the third quarter of 2009, we see that the financial crisis on our performance has begun to show. In some specific market, we have seen the credit crunch, exchange rate fluctuations led directly to operators in the investment very carefully. Just talking about this trend continued in the market until the first quarter of this year.
In addition we have also seen changes in technology on the development of the whole company is going to affect, we see continued investment in 2G decline, while increasing investment in 3G, including mobile broadband infrastructure deployment. But you can see, we in the field of professional services Telecom has maintained a very good growth, services have accounted for 40% of our overall sales. And our business in North America is a very strong growth in the first quarter of this year, our growth in North America is 99%.
"21st Century": mainly because of the acquisition, right?
Wei Hans: There are three reasons you just mentioned is an acquisition of certain assets of Nortel. The second is because we won the Sprint's managed services contract, which is inside the history of the industry's largest outsourcing contract. The third cause is the North American market growth of mobile broadband is very fast, we are almost in the North American market and all the major carriers have cooperation.
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