Driving 5G Network Evolution: Revenue Growth, AI Integration, and Collaborative Innovations | The Six Five Summit

Welcome back to the six five Summit 2024. It is day two. I hope you enjoyed day one.

Uh, as a reminder, the theme for this year's summit, it's all about ai. Of course, it is, it's all about not only building out the AI infrastructure, but also about the benefits that AI is already bringing to consumers, uh, and businesses. And I am just pleased to introduce our show opener.

Cohen, great to see you. Nice to meet you. It's been so long.

I think Mobile World Congress. Yes. Actually not that long, but, uh, so many things happens.

So you actually feel so much time. Uh, totally. Um, so much stuff has gone on.

I mean, it is crazy. It, it feels like technology has amplified, and I know we're gonna be talking a lot about ai, but I thought it was really good. If you could just talk a little bit about the big, the conversations that stood out for you in the first half, uh, of this year.

Yeah, so crazy time for us, uh, actually service providers for mobile revenue is growing yay, uh, for quite some time. And, uh, inflation is there. It's not catching up with inflation, and almost nothing catches up with inflation, but it's never dead.

7% in the last year. So it's pretty good. 4%.

Mobile ads grew by almost 15%. Cloud services globally grew by more than 20%. And, you know, they talk about our industry, like we are, like utility, that you need to have connectivity, like you need water, like you need electricity, but in reality, our business model is actually worse than them because the fact the traffic continues to grow even more than what you consume water and electricity.

Uh, but the revenue doesn't, doesn't grow proportionally. And that's why we need to, at the, at the end of the day, add more capabilities to the network to help our customers monetize. Uh, one thing, one expression I really appreciated that, that you gave was putting 5G into halves.

Like we have the first half, we have the second half, you know, pick your favorite sport, but 5G first half was clearly about smartphones, and there were some really bright spots on this 5G deployment cycle. What, what stood out for you so far? Yeah, so the first half of 5G still is, uh, leveraging mobile broadband.

That's the vast majority of the revenue and the innovation that comes from there. Uh, if you look today, the, the US market, uh, depends which operator you choose. It's between 200 to 300 million, uh, population coverage that you have on real 5G spectrum, like mid band.

It's only when you use mid band or maybe mid wave, you have the, the experience that is required for 5G. You see that there is a, a little bit note of 60% penetration of 5G smartphones, which is actually pretty high, right? It shows a healthy market here.

People are leveraging this capability, are using this technology. And even though that it's only 53% of the Americans are satisfied with 5G, if you compare it to last year, they actually, the satisfaction grew up by 12%. So the work that the customer, the CSPs are doing is working, and customers are leveraging the, the capabilities and enjoying it more and more.

The fact of the matter, the churn in the US is only 1%, which is as low as it gets. No, that's great. And it wasn't just about smartphones, it was also about fixed wireless access.

I actually picked up an FWA device from, uh, from a, a major carrier, and I was actually shocked at how easy it was to set up and even worked inside of my cement laden high-rise. So, so tell me about how, how that rolled out. Yeah, so you're talking a very, very important point.

The user experience in terms of taking the device and activating it and how quickly you got the service. If you compare it to others that you have to wait weeks and they have to deploy, it's a, it's a big differentiator. Fixed water access has been the big, the big, uh, use cases with big success, even though people initially were skeptical.

If you look today at the US market is, uh, 9 million subscribers, whether it's consumer or businesses tell you something. In the last few, uh, quarters, almost a hundred percent of the fixed broadband ads are actually on fixed wireless access. Basically taking all the growth, uh, from the cable companies.

She's pretty amazing. And, and when you look at the net promoter score, you, you see results that you wouldn't expect it's matching fiber, but actually beats cable. So these customers that are taking the modern, like you, right?

They're not only taking it because it's easy to take it and put it at home, and you immediately get the service, they actually endure, enjoy a better service than they get today from the cable players. So I think, uh, it'll continue to be a big player. Uh, operators are generating new money with it, and they'll continue to invest in it.

Yeah, FWA was a big surprise for me, but once I experienced it and how easy it was, I just knew that this was going to be popular and I didn't even have to go, you know, I went into my local outlet to pick up the box. I didn't even have to do that. They could have mailed it to me.

But anyways, uh, big success story. So we're like a third of the way into this conversation. We haven't even talked, uh, about a AI yet.

And it seems to be, you know, there, there are businesses other than ai, but AI is permeating, permeating everything. And I'm, I'm curious, how has the telco industry, uh, used and taken advantage of AI so far? Yeah, so CSPs and network vendors like us is, is already taking advantage of AI in many, many, many ways.

It is still the beginning of the journey, right? But, uh, we are already doing it. I'll give you some examples.

Some of them are very tacky, some of them are kind of obvious. For example, if you look at cell edge down, like throughput, so everybody's interested to have high throughput. Cell edge is one of the key measurements you have.

Some customers, uh, define it as 10 megabit per second. Some are 50 megabit per second. But if you can increase the cell edge throughput, it is very important for you in terms of your capacity and the user experience and your coverage.

So we have implemented a capability called AI powered link adaptation. And what does that, what that does, it's actually unlike today or before, using AI linked adaptation where the cell coordinate with itself, what is the link that is required and how much power is required, it coordinates with the rest of the network, specifically with the other sales, in order for you to get the best, uh, power to the user and optimize the, the, the throughput. Other capabilities, uh, for example, is associated with sustainability, which I think you talked about in other session.

Uh, 14% average power saving can be implemented by AI powered massive MIMO sleep mode. So massive M im o is the latest, uh, technology when it comes to providing high capacity, high throughput, uh, high performing, uh, mobile broadband. And it has using many, many elements.

So this type of massive MO antennas has 64 elements, a hundred twenty eight, two hundred fifty six element, and not always you need all these elements. Mm-hmm. Sometimes you have lower number of customers or they're very close to the antenna, then you, you might be able to use lower number of elements.

ai, understand that it sees how many customers there is on element, what's the demand, and you can actually put some of the elements to sleep. And by that reduces the power consumptions of that radio. So this is one of the capabilities that we're using AI for other capabilities are, for example, when we do customer support, we use travel report resolution.

That is using of course, gen ai and of course the usual suspect where when it comes to our research and development, it's using coding bodies for us to accelerate the level of innovation and implementation of capabilities. So you must have, you're implementing a lot of these today, right? Yes.

So you must have been working on this, you didn't just start 18 months ago when chat GPT, you know, an OpenAI gun and say, you, you must have been doing this four or five years ago more. Yes, of course. We have been working with Gen AI for many, many years, and we have been actually implementing them and using them for many, many cases, right?

It's just that the, the hype was not there. So we were talking about it with our customers, but not the way we talk about now in the media. No, I love it.

So you were doing it before it was cool. Okay, so we talked about where AI is being used today. You were doing it before it was cool.

Uh, but what about the new ones, the, the upcoming applications? So one of the good things about 5G is that you have a lot of parameters to tweak on, and you can adapt the network to what is the user needs. So today you have a table of parameters.

When there is a business need, you need to adapt to one of this things that appears in the table, okay? This is the parameter that closely meet to what you need from in terms of business. But we are introducing, uh, AI based, intent based networking, which basically means instead of you telling, okay, this is the business need, let's see where in the table is the closest setup, right?

You actually give the network, this is my business need. And the, the network at basically using AI adapts the link to what you think in terms of the business, and it also do a closed loop assurance that you actually could actually get the SA that you need for this connectivity. So this is something that you couldn't do without ai, uh, and it, it is taking the capabilities of 5G to the business to the maximum.

No, I like it. And hopefully you can go in there and program it, uh, with a chat bot or, and as opposed to pulling a thousand different levers. I love it.

So, uh, we talked about the first half and, you know, two bright spots we talked about was a 5G broadband for mobile devices. And the second one, which again, i I was pretty surprised at, uh, was fixed wireless access. What is the second half of the 5G uh, rollout look like?

Of course, architecture evolution, you see that operators are launching 5G standalone. I mean, up until now, five, GG non-ST standalone was the dominated technology and architecture we do in terms of radio, we need to finish the job. Actually, in reality today only 43% of the sites in in the US have mid band, which means we are almost halfway, but not even halfway.

We need to make sure we are putting mid band in all the sites, giving access and capacity to all the populations. And we need to start, uh, introducing differentiated connectivity network slicing that will be enabled by, uh, standalone the five gc. Uh, and then of course, making sure to give access to all these good things through APIs to application developers.

For us in Ericson North America, as you know, we focused a lot with the on consumer, with CSPs, we focused on enterprise through CSPs and directly, but also recently we have established Ericsson federal technology group that focuses on the DOD. Um, so I think this is the third time you and I have, have chatted, uh, on the six five, and we haven't talked six G and I get, maybe we should go there, maybe, but can you talk a little bit about the on-ramp, architecturally, uh, what's either being done or what needs to be done before we hit six G? Yeah, So mentioned standalone.

This is a big enabler. It enables higher performance, lower latency. It actually gives this all these parameters that I talked about to provide you the, uh, the right business needs for your connection.

So Requires a standalone network. Yes. Okay.

It requires a standalone network that enables network slicing, and it's basically the base for 5G advanced other things that are coming open run everybody was talking about, but still in, in early stage. I do believe that this will get industrialized more, get into scale, uh, cloud run still most of the traffic runs today on purpose-built hardware, we are desegregating. Uh, the hardware from the software and introduction of cloud into the run will provide a way more capabilities.

And then you will see more and more AI and automation coming to fruition in, in this capabilities, simplifying the way of operating a network, but also making things much faster. 5G Advanced will introduce enhanced massive vinyl, meaning even more capacity to the same equipment, which is very required because traffic continue to grow. Uh, introduction of technologies like, uh, reduced capacity, uh, capability of of of 5G in order to introduce cheaper and smaller, uh, devices into the, into the ecosystem.

Precise positioning. And something that I particularly, uh, very excited about is sensing capability. This is a technology that is planned for six G, we might pull it into 5G advance.

This basically, unlike until now that the 5G and all these GS technology provide you mostly connectivity capabilities, this con capability, uh, suddenly the network will be able to give you sensing of the network. So it will be able to sense whether there's drones, whether there's cars. So it can be used for many use case for, for example, to make sure that cars don't hit each other.

Uh, and, and other use cases. Any use cases you can come up with yourself. Yeah, No, that's exciting, exciting stuff.

At Mobile World Congress, a bigger conversation than I thought there would be was this idea of open network APIs and, uh, Erickson and your sister company Vonage were, were very engaged in this conversation, but it was a, it was a global conversation. Uh, can you talk about the role that, uh, why we need these and what the benefit benefits are? So we talked before about the fact that operators are increasing their revenue, but still the model is very difficult.

What we are trying to do in Ericson, we try to enable them to create other streams of revenue. So for example, all these fantastic capabilities that we talked about, like network slicing and, and positioning and sensing, et cetera. Eventually, in order for them to generate additional revenue, it needs to be open to application developers.

You need to make your your 5G network a platform. And in order to do that, you need to create an API, uh, platform, like global network platform that we are working with Drawn Edge in order for, for having application developer innovate on the network and scale in the, in that perspective. Recently we signed contracts with partnership with at and t and Verizon that were announced with Deutsche Telecom, et cetera.

And we are working very closely with others to add more and more operators into this global network platform. Yeah, it's exciting. And, and when I look at it, I mean, before these open network APIs, if you were a developer, you might have to, in the United States write specifically to, to three different APIs per per category that you wanted to go into.

And I, I hope in just for the United States, you, you would just have to write to one that would be, that's the way that a lot of these open APIs and other industries, uh, work. Yeah, I mean, that's the only way to scale. Application developers don't want to talk to different CSPs.

They don't want to have contracts with different CSPs. They want to have one API that actually they don't care where it is. It work here, it works in Europe, work with Verizon, work with at and t, they just want to work with one.

And that's exactly the objective of global network platform that we have in Vonage. S Smart, smart. So I wanna end, uh, here we are in your beautiful office in New York City.

Um, I want to talk about Ericsson and, and your footprint here in the United States. Can you, can you talk us through that a little bit? Yeah, of course.

I can talk about it. Uh, we are very proud, uh, in terms of business. We have the largest install base in market share in, in North America.

We have north of 45% market share in radio north of 50% When it comes to core, that's the, our situation. As of now, we actually hope to, to to be better. Half of the radios that are actually deployed in the United States are our equipment.

We have a very solid presence. We higher than 7,600 employees. We are in 30 different sites across the US six research and development centers.

And we have a factory, which we built, uh, a few years ago. It's in Louisville, in Texas. It's the latest and greatest.

We are developing the latest technology when it comes to run compute, when it comes to massive MMO radios. All this equipment is manufactured. There is going to our customers here in North America, uh, and we are really proud, proud of it.

It's also the only, uh, build America Buy America, uh, compliance radio in the us. Uh, we have extensive collaborations with a lot of companies here with hyperscalers, with players like Qualcomm, apple, Dell, hp, Intel, I mean, you name it. We work very close to them because they're very important to the ecosystem and what we're trying to achieve.

And, and the true is that US has been a, a, a main market for Ericsson, if not the biggest, since the inception in 1902. I had the privilege of visiting your Texas facility. It was a very short drive, uh, up, up from Austin, but I was struck at how automated it was and unsurprisingly connected by a lot of 5G uh, technology.

But, um, you were actually building infrastructure in, in Texas, in the United States, and I thought that was impressive. Thanks. So you're the day opener for the six five summit, uh, 2024 here.

Any final words for the audience? Any, anything you we didn't cover here that you wanted to talk about? Uh, with the risk of saying the obvious, everything that can become wireless will become wireless and, uh, 5G is a fantastic technology to leverage this.

We are planning to improve it and increase the capacity to be able to connect more and more devices and phones and carry more and more traffic. And it's very good for the economy, it's very good for the consumer and the enterprises, and we are looking forward to see how it happens. Yossi great to see you, and I hope we can, uh, talk about the next step of your adventures, but more importantly, broadly based the industry, industry, uh, progress that, that, that is being made and quite, you know, you guys are at the, at the forefront of this, so I appreciate that.

Thank you. Thanks for having Me. Thank you.

So this is Pat Morehead, six five Summit 2024. Day two, we are talking about networks. And it's funny, like I always say, with every big inflection point, uh, the system gets tested and that's compute, that's memory, that's storage and the network and AI is certainly not only stressing the network, but also AI in the network is, is helping as well, not only with performance and efficiency, but also with sustainability.

Check out our sustainability, uh, conversation, uh, with Ericsson if you have the chance. Take care and thanks for, thanks for tuning in. Bye-Bye.