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Egypt is an advanced market when it comes to telecom: Ericsson CEO

Daily News Egypt / February 19, 2014 / 2 Comments

DNE Chairman Mostafa Sakr discusses Egypt’s telecom industry with HansVestberg, President and Chief Executive Officer of the Ericsson Group

DNE Chairman Mostafa Sakr discusses Egypt’s telecom industry with HansVestberg, President and Chief Executive Officer of the Ericsson Group
(DNE Photo)

What is your message to the mobile operators in the region and what are your recommendations to them in order to meet the current challenges?

Two things: one, it is not strange that we are in this challenging equation; we are in an inflection point of this industry going from voice traffic to data traffic, we are in the fifth technology revolution that brings out new players and everyone wants to look for ways to be relevant in this new world. We at Ericsson are taking a lot of strategic decisions what we will do the next 5 to 10 years…Operators have a lot of choices; as an operator you can go into simply network operation, or you can go into a more advanced network where you can go into health care, education and connected cars.

There are so many opportunities, and we at Ericsson are investing so we can become relevant to all those choices that different customers will choose. If the operators decide to focus just on the network business, we are spending almost $5bn on network development; if the customer decides to focus on more advanced services, like mobile money and machine to machine, we are ready with our solutions and innovative services to support our partners in light of this great transformation witnessed by the ICT market. Definitely, we are in the middle in an inflection point of this technology revolution.

What are the factors that would push the development of mobile money in Egypt?

It all depends on the country’s regulators and its financial market. Technology–wise, it is not a problem at all to build a bank account based on mobile usage. You can say that we already have a bank account based on the pre-paid mobile subscriptions because you know the value of the number of minutes you have left all the time and currency is the same. Ericsson has 2.5 billion subscribers in the world on our charging and billing system.

So there are three factors here: the first is that the financial market has to allow mobile money; second is the technology, and Ericsson’s technology is there; and third is the consumer who is willing to adopt a new way where they use their own pre-paid account as a payment method because they trust it. The barrier is coming down and we have seen some markets around the world where the m-commerce has been sky rocketing as soon as they have seen this adoption coming, and it is not only about bank accounts. It is the fact that the barrier is much lower when we need to transfer money and there is no bank account; that is where the mobile can play a big role.

In light of Q4 financial results, is Egypt still within the target markets for the company?

Ericsson has been in Egypt more than 115 years. We are a company that has a long term strategy; we at Ericsson always speak to our customers and partners in Egypt about ways to overcome the challenges witnessed by the country. There are always times that are easier or tougher, but in Ericsson, we are a long term player. As I mentioned, we have been in Egypt for over 115 years. My plan or Ericsson’s strategy is to stay here in Egypt for at least another 100 years to continue to be part of the Egyptian society and continue to face challenging and easy times at the same time.

Cloud computing is regarded as a new business that witnessed a wide spread recently; what does Ericsson offer that is new to the cloud computing technology compared to the other providers?

That is one of the areas that we are heavily investing in. We started in this area in 2010 to virtualise our hardware and software. That was the beginning of our cloud offering. We have prepared all our technologies so they can be virtualised. We are already working with different operators in the world in this area but we need to keep the quality and the operators need to believe in new services to work with the cloud in a telecoms world. I believe we are well positioned and we are ahead of many competitors. We are not comparing ourselves to a cloud of Amazon because that is something different. At Ericsson we need to have a relevant network that knows exactly where the content is and how we transport it in order to get better network performance. It is not about filing information in the cloud, here we are talking about virtualising the network for better efficiency and better services, and that is what we are doing.

What is Ericsson’s market share and the latest deals made with operators?

We are acting in six different areas in our business and we are number one in four. I will start by the most difficult one and that is TV and Media; we are number one in the market globally, then OSS BSS (billing system). We are number one by revenue; in services such as consulting and system integration, we are number one and almost twice as much as number two. Then, of course, mobile infrastructure where we are also number one; by the end of 2012, we were twice the size of number two. That doesn’t mean that we will stay as number one forever, because everyone wants to beat number one. The competition is fierce and we do realise that; and we also realise that need to be humble to sustain our position and we need to stay very competitive by having the best technologies. We invest $5bn every year in research and development. We also have the best service engineers in the industry. That is our position and we fight everyday to keep it. I hope to see Ericsson continuing to be number one in this industry. We have a very good position in Egypt, we work with all operators. I am happy with our position in Egypt and we are willing to do more and invest more in Egypt.

We heard about Ericsson and Samsung patent agreement; can you tell us more about the details of this agreement?

We are in an industry where we don’t protect our patents. Anything Ericsson innovates we are actually obliged to share, that is why 6.7 billion mobile subscriptions in the world use the same technologies anywhere in the world. Ericsson has agreements with all the handset and infrastructure providers and Samsung were the only ones that we didn’t have an agreement with. After investigations we have come to an agreement. Today, after the agreement between Samsung, the biggest handset manufacturer by volume in the world, and Ericsson, the biggest network infrastructure producer in the industry, are now settled and in agreement and this shows that the model works. As a result, the industry will benefit and we will continue to benefit the consumers.

What is your evaluation of the telecom sector in Egypt from a global perspective and do you see the fourth licence coming to Egypt?

First of all, I can say that Egypt is an advanced market when it comes to telecom because mobile broadband is so used and people are using it daily. Therefore, of course Egypt is an advanced user market and of course 3G has come and 4G will probably be coming of course; for Ericsson this is a very important market, we have been here for many, many years. When it comes to the fourth licence, I think that the most important thing for Ericsson is to be relevant for all customers that we can have in any country in the world.