GOTEBORG, Sweden-Speaking from one of L.M. Ericsson’s major design headquarters in the company’s home base of Sweden, Hakan Eriksson pronounced Ericsson’s massive cost-cutting and reorganization efforts a success, while at the same time painting a relatively glowing outlook of the wireless industry.
Eriksson works as vice president and general manager of Ericsson’s extensive research and development division. A 17-year veteran of wireless network technologies at Ericsson, Eriksson outlined the company’s extensive cost-cutting efforts during a press gathering last week.
“We have been successful in that,” he said.
Eriksson said the company plans to move back into the black, and that its reorganization sparked by the economic downturn has been largely successful. Indeed, Eriksson said the company has cut its research-and-development sites from 80 to just 30. Eriksson said the company’s new goal is to balance its business to remain profitable regardless of market conditions.
As Ericsson now sits atop a relatively restabilized business, Eriksson provided insights into the company’s outlook on the industry, including its perspective on the explosion of the wireless local area network market. Although Ericsson sells WLAN hardware, Eriksson said the technology will in no way compete with W-CDMA network offerings.
“That is absolutely impossible,” he said. “Public wireless LAN as a standalone operation without a cellular carrier is a hopeless operation.”
The two technologies serve different needs, and users will not be satisfied with wireless access that is limited to specific areas, he said. Eriksson used public pay phones to highlight the technological differences. When public pay phones were first introduced, users had to search out the locations to make calls. With the advent of mobile phones however, users could move as they wished. Eriksson said the same is true with Wi-Fi networks and W-CDMA-users will not want to search for hot spots to gain access when they could use a wide area network like W-CDMA.
“We will see extensive buildout of W-CDMA,” he said.
Indeed, Eriksson predicted a massive opportunity for the W-CDMA market. He said W-CDMA services will hit the mass market by 2005, a prediction that flies in the face of many analyst and industry predictions. Eriksson said there are currently almost 1.3 million W-CDMA subscribers, spanning from NTT DoCoMo’s network in Japan to Hutchison Whampoa Ltd.’s 3 networks in Europe. As for the future of WLAN, Eriksson said the technology will have its place in a combination with wide area networks.
Eriksson further asserted the market for W-CDMA services, explaining that video phones will add a new and valuable dimension to mobile phone conversations-the visual medium.
“You have eyes, and you want to use those also,” he said.
Eriksson said the world may soon get a good look at the possibilities of W-CDMA during the upcoming Olympics next year in Athens, Greece. Just as CDMA operators in South Korea used the World Cup soccer competition as a showcase for the technology, Eriksson said European operators likely will use the Olympics as a marketing platform.
Not to leave out one of the industry’s most talked-about topics, Eriksson also commented on the split between GSM and CDMA technologies. He said the GSM/GPRS/W-CDMA evolution path makes more sense from a systems point of view due to the frequency-hopping nature of the technology. Eriksson said, however, that the CDMA market probably will find success and market share. Eriksson echoed other industry watchers in predicting a worldwide wireless industry comprising 80 percent W-CDMA networks and 20 percent CDMA2000 networks.
At the same time, however, Eriksson said W-CDMA does not represent the end of innovation in the industry. He said Ericsson and its competitors are working to define the industry’s fourth generation of network technology.
