It’s like anxiously waiting for the exit from a dirt road to the modern highway and, finally, being able to accelerate, seeing the landscape through the window blur and the speedometer needle almost double its position.
That pleasant and libertarian wind in her face is what the Swedish Ericsson is feeling right now. The company has defined an investment of R$ 1 billion between 2021 and 2024 in the country for research and development of 5G, which will bring the speed and low latency (response time) that most Brazilians will enjoy in 2022. “We are super excited.
Everyone wants to have reliable and affordable connectivity at home, whether they live in urban or rural areas,” Ericsson’s president for Europe and Latin America told DINHEIRO, Arun Bansal, an engineer by training and for 27 years in key positions for 5G in the company. “I hope that Brazil creates incentives for everyone to have access to this and that no one is left behind.”
After the largest radiofrequency auction in Latin America, with a collection of R$ 47 billion, the executive saw an optimistic scenario emerge for the country in the sector, thanks to the commitments placed as infrastructure requirements for operators, which would confirm the best practices in around the world, according to the executive.
With or without reticence to the event, Brazil would be on a par, according to him, with China, which does not grant any license to operators unless structural goals are met.
CHALLENGES Living in London, and having already lived in his native India, Sweden, the United States, Singapore and Indonesia, Bansal knows very well how to distinguish between his two current continental assignments, which are so diverse.
Latin America and Brazil, compared to Europe, would present a much more dynamic future picture for Ericsson’s investments. Even our poor telecommunications infrastructure at complex and remote points are exciting challenges for him, as the technology would come undermining the previous Gs.
“There are people outside big cities who don’t even have fiber optics, so the only solution for them is 5G,” he said. And he cites the Brazilian demography, which shows a young, growing population. In Europe, the opposite: a stagnant and old. “That’s why the first one is more interesting. We believe that 5G innovations will come from Asia and Latin America,” said the president. According to a company report, 59% of mobile subscriptions on the Latin continent are 4G LTE, and this is expected to drop to 46% by the end of 2026.
In this same framework, 1.6 million jobs will be created through the mobile business, hence the celebrations for the evolution of technology. Ericsson’s share of this market in Brazil is 52%, with its main competitors being Nokia and Huawei.
“5G will be crucial, particularly to improve short-term target performance and automate industries” Rodrigo dienstmann, president of Ericsson for the southern cone of latin america
There will be two moments that the country will see with 5G. The first when the technology spreads to cities, and this will initially simply translate into the speedometer marker — something for later this year, as there is an obligation on operators to cover capitals until July, with some already saying they go beyond that. . The second will be when operators start to launch new services, which will not be limited to the pure broadband we know in 4G. It will be games, content uploads and business models that don’t exist in the current scenario, and that moment will take a few years.
Brazil is already experimenting with 5G, with operators launching the service for businesses in São Paulo and Rio de Janeiro. Ericsson itself is a pioneer in real 5G use cases here. One example is the partnership with Vivo na Fazenda and Usina São Martinho, in Pradópolis (SP), in which a drone scrutinizes the company’s planting areas in real time, noting pests, fires and other data. The company has already introduced dedicated 5G networks to help companies in some industries understand how they can benefit from the technology. “And in the post-Covid-19, even more. It is also an enabler for them to connect with their ecosystem,” said Bansal.
Rodrigo Dienstmann, who has been in Brazil for seven months as Ericsson’s president for the Southern Cone of Latin America, has already dealt with this on a daily basis. He says that each customer has their own plan for how they will invest and monetize 5G, but some points are common, regardless of large corporations or new markets. “5G is going to be crucial, particularly for improving short-term target performance, or automating industries in areas such as agriculture, utilities, healthcare and education,” he said. “The faster they go, the more competitive they will be.”
The backbone of these investments is made up of towers, cabinets and batteries and this can be reused from the 4G infrastructure. Bansal is optimistic: “We can apply the 20/80 golden rule: only 20% of this infrastructure will be new, with radio equipment being replaced for 5G,” he said.
RELATIONSHIP WITH CHINA It is no wonder that Brazil has one of the four Ericsson factories in the world, since 1955 — in March 2021 it inaugurated its 5G production line, which in addition to serving local customers, exports technology radios to the United States, Asia, Latin America and Europe.
With 109 commercial networks already active on 5G in 48 countries, and manufacturing mobile and fixed-line equipment, Ericsson ended 2021 with organic growth of 4%. If not for China, it would have reached 8%. The country may be good at creating conditions to implement technologies, but it has an iron fist on some issues. “She decided to decrease our market share significantly.
We had 10% to 11% in the first round of 5G. In the last round, they dropped our margin below 3%. We have to respect that decision,” said Bansal. It is worth adding that the attitude would have been retaliation against the decision of Swedish regulators who wanted to ban Chinese companies from the country’s 5G network, citing a risk to national security.
Although Ericsson’s sales were stable at US$ 25 billion worldwide, annual profit was up 30% (US$ 2.4 billion), with an Ebit margin in 2021 of 13.9%, reaching the goal of company. For 2022 the target is between 12% and 14%. The company wants to remain in the lead in two ways.
“The first is technology, as we invest 40 billion euros in research and development around the world and this is an industry that is growing at a fast pace,” said Bansal. The second is to be more competitive than the competition. “We have a strong presence in all countries and deliver projects quickly, with quality. The payoff is marketshare and global leadership.”
2G, 3G and 4G targeted a single segment, that of ordinary consumers. The 5 will be the fastest G and its biggest flirt will be with business, Ericsson’s focus for 2022. The industry will benefit from speed and low latency. But every ten years a new G appears.
The 5 came in 2020 and the next step, 6G, will come, with a good dose of accurate prediction, in 2030, according to Bansal. “It will be a technology for the Internet of the Senses, the Internet of Emotions. And something that will revolve around said Metaverse,” he stated.
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