How Ericsson plans to steady its regional ship

Fierce competition and a difficult economic scenario in Latin America have led telecoms equipment manufacturer Ericsson to decrease its investment in networks.

In the second quarter, the operator's revenues in Europe and Latin America fell 2% year-on-year to around US$1.5bn.

In this context, the company has named Fabian Monge as its new president for Latin America North and the Caribbean. He will oversee operations in Colombia, Ecuador, Bolivia, Paraguay and Venezuela, among others. 

Monge, was previously vice president and handled operations in Costa Rica, Nicaragua, El Salvador and Honduras.

In this interview, he talks about Ericsson's plans to address the difficult scenario and how innovation helps the company advance.

BNamericas: The latest earnings report showed that Ericsson faces difficulties in Latin America due to the macroeconomy and competition. How do you tackle this scenario?

Monge: Latin America has always been a challenging market from a macroeconomic point of view. We are, in some ways, used to managing a little uncertainty. It's a volatile market and it has always forced us to adjust from our global policy to our local policy.

We haven't modified our long-term objectives: we continue to strive to collaborate with our clients on various fronts. One of them is the acceleration of 5G in the region. We've estimated that there were 33mn 5G subscriptions [in 2023], which maintains 4G as the dominant technology. We continue to work with our clients to densify 4G and accelerate the implementation [of 5G] in markets where spectrum is still available.

We're also following the case of Costa Rica, where a public tender for 5G frequency bands was announced. We estimate that by 2029, more than half of subscriptions will be 5G.

In Mexico, where I'm based, there are 125 cities with 5G and Ericsson is present in 78.

Cities such as Mexico City, Monterrey and Querétaro are the ones with the highest traffic and, specifically in Mexico City, upload and download speeds are above European levels. We're talking about almost 200Mbps download and 30Mbps upload speed.

Finally, this year, we launched the first 5G laboratory with AT&T and Tecnológico de Monterrey.

BNamericas: Can you share the results this laboratory produced? Have any of the developments been taken to a commercial stage?

Monge: I can't provide specifics, but there was a campaign that was the 5G fund that rewarded the innovation of students and companies. Two very interesting use cases were shown: the first was monitoring patients in ambulances through the cellular network to detect vital signs. They're analyzing this for implementation in one company that's dedicated to patient transport.

The second case has to do with an automated robotic arm for inventory management processes.

Besides the 5G laboratory, I also want to say that we're implementing artificial intelligence software for the early detection of failures or degradation scenarios in networks.

In the past, the operator received a call from a customer complaining, and that now passes to us as support for end customers. Subsequently, we had to send equipment to the streets, do a drive test to detect the failure and correct it. That took us three or four weeks.

The application of artificial intelligence that correlates statistical events has allowed us to reduce these three weeks to 15 minutes.

BNamericas: Has this system been implemented for an operator in Mexico?

Monge: Yes. I can't say for whom, but it's a commercially active operator in Mexico and Brazil and we're about to launch it in other Latin American countries as well. We call this service “performance partnership” and we're implementing it for most of our clients as added value.

BNamericas: Are similar 5G laboratories like the one in Mexico planned for other markets in the region?

Monge: At the moment we only have this laboratory. We've been in discussions about several additional locations. In Costa Rica with the national learning institute, we're doing something a little different, more focused on education. We're trying to reach other universities and other countries to encourage innovation.

BNamericas: How is the consolidation in the telecommunications industry affecting you?

Monge: I believe that the consolidation of operators in most markets has brought benefits to end users. Obviously, there are challenges in combining networks and efficiency. However, it's a global trend, not only in Latin America, and is due to the need to adapt the way in which telecommunications services are monetized since competition in some countries has been very strong and spectrum [costs] haven't dropped to the levels required to invest.

How are we at Ericsson supporting our clients to better monetize networks? Three years ago, we bought a company, Vonage, and we're betting on the exhibition of applications developed on what we call a global network platform, which basically makes use cases and software available to all operators in a layer that they can quickly access and implement into their networks and monetize in a different way. We're trying to bring this to Latin America. We're in active conversations with all of our clients.

BNamericas: This is related to the GSMA Open Gateway initiative, which is just starting in the region. What is needed for a more massive implementation?

Monge: From our side, we see the need to standardize. I think that hasn't only worked for initiatives like OpenRAN or CloudRAN, but also for Open Gateway. We're actively trying to support our customers with standardization to make implementation simpler. And once we have that path, operator adoption is going to be greater. This is what we're doing with Vonage, standardizing development and showcasing the capabilities of Open Gateway more easily.

In Brazil, we've automated scenarios associated with the management of SIM cards, for example, with some of our clients.

There is an [Open Gateway development] roadmap of more than 20 use cases, of which only four have been implemented. There is quite a lot of potential.

BNamericas: How is the development of private and industrial networks advancing and what is expected for the coming months?

Monge: 5G is an enabler of this digital transformation. I believe there are three key areas. Technology can help us reduce global emissions and we achieve an estimated 15% reduction [in emissions] by 2030.

On the other hand, in mining we've seen a 20% reduction in injuries in mines and we have avoided up to 10% of fatal accidents, both in Latin America and Europe.

And the third has to do with the benefits for industries. The port of Livorno in Italy registered a return on investment [due to automation and the incorporation of mobile technology] within less than two years.

We've seen Mexico with great potential, and other countries too, like Argentina. In the case of Mexico, there are ports that could be candidates for quite interesting automation.

In 2023, the results of companies were close to 5% of the value of what we sell in the region. It's a nascent business, but we see significant growth.

This interview was originally published on August 6