Ericsson: 5G can boost enterprise revenue, but security controversy slowing down industry

With its promise to provide low latency and high data speeds, 5G can introduce a multitude of new applications for businesses and drive revenue from the sector. However, the ongoing discussions about cybersecurity risks, specifically those involving Huawei, is leading to uncertainty and a general slowdown in the market. 

Because so much more could be connected via 5G networks, security inevitably would come up as a frequent topic, said Ericsson Group's president and CEO Borje Ekholm, who was in Singapore to offer an update on the Swedish company's 5G business. 

Ericsson, so far, had seen little impact on on its books but there had been a general slowdown in the market, in particular in Europe, due to the controversy, said Ekholm, in response to ZDNet's question on whether he had seen any pushback from customers as a result of the debate regarding Huawei's systems. 

The US government repeatedly has accused Chinese networking vendors, namely Huawei, of sharing sensitive information with their government and providing access to private US business communications. The Trump administration had called for countries to boycott Huawei's telecommunications systems, specifically its 5G equipment, and put pressure on its allies, including Europe, New Zealand, Australia, and the UK, to ban Huawei products, threatening that it would be "difficult" for the US to do business in countries that deployed Huawei equipment.

Ekholm said the controversy had led to uncertainty in the market and no one in the industry would benefit from uncertainties. Organisations were taking longer to make investments since it would be costly to make infrastructure changes once a technology provider was appointed.

Despite the ongoing debate, he noted, not many formal decisions had been taken apart from Australia, New Zealand, and North America, which had opted to ban Huawei. The European Union (EU) also had yet to confirm its decision on the issue, he said, adding that there currently was "a lot of talk and noise, but not traction". 

EU in April asked its member states to complete a national risk assessment of 5G network infrastructures by end-June this year and urged them to update existing security requirements for network providers. The move came amidst concerns that any vulnerability in such networks or cyberattacks targeting future networks in one member state would cause a ripple effect across the union.

Again, Ekholm said, such scrutiny had not led to any changes in how governments or customers assessed Ericsson's products. 

Suggestions to open up the vendor's source codes for inspection as a way to ease security concerns also were not always practical or possible as Ericsson updates its mobile software every fortnight or 26 times a year, he explained. A large test centre and much resources, hence, would be needed if customers were to test or inspect every upgrade, he noted.

Some patches today also were necessary to plug security holes or respond to the changing threat landscape, and these often would need to be deployed quickly, he said.

He added that security always had been a key focus for the Swedish company, regardless of the current environment, and underscored the need to continuously invest in the integrity of its products. 

According to Fredrik Jejdling, Ericsson's executive vice president and head of business area and segment networks, the vendor booked 18 5G commercial deals--that were publicly announced--and shipped 3 million 5G-ready radios. 

In this region, it inked 5G agreements with six telcos including Singapore's Singtel, India's Bharti and BSNL, and Smart in the Philippines. Ericsson also operates five 5G innovation centres including Singapore, Vietnam, and Australia, said Nunzio Mirtillo, Ericsson's senior vice president and head of Southeast Asia, Oceania, and India. 

5G to fuel new library of applications

Ericsson is putting significant efforts investing in and boosting its products and service offerings in 5G, which it believes will play a crucial role as telcos worldwide look for cost efficiencies and data consumption continues to grow exponentially. 

Ekholm said data traffic was doubling every 18 months and this was putting more stress on current infrastructures, adding that bigger network capacity and bandwidth were critical to support the data growth. 

At the same time, telcos also needed to achieve better cost efficiencies as they worked to expand their networks to cope with the increased data traffic, he said, noting that one focus area for Ericsson had been on reducing the power consumption of its radio equipment. 

He said 5G live deployments would increase in momentum this year and predicted that 25 percent of mobile data traffic in 2024 would be carried by 5G Networks. 

And with promises to deliver low latency--by 10 times--and high speeds--of more than 10Gbps data peak rates--he noted that 5G demand would grow beyond the consumer sector and into the enterprise market, particularly, in terms of the new types of applications it could fuel. 

Ekholm predicted that enterprises would provide a big revenue uplift for the industry of at least 30 percent more than current revenue levels. 

With Wi-Fi networks limited by issues such as signal interference and challenges in providing full mobility, he said 5G would offer a more reliable and robust alternative. For instance, it could be deployed to fully automate a factory site and support a new breed of apps and services that required real-time or low latency connectivity. 

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