Ericsson launching US 5G software development centre

Ericsson is going all in on 5G, announcing increased R&D and manufacturing in the US across baseband, radio, artificial intelligence, and automation, with plans to launch a new software development centre.
Written by Corinne Reichert, Contributor

Ericsson has announced that it will be investing more in its United States-based 5G operations, with plans to open a new software development centre this year.

The new centre will focus on baseband development, and employ over 200 software engineers once opened.

It follows the launch of Ericsson's Application Specific Integrated Circuit (ASIC) Design Center in Austin, Texas, at the end of last year to develop and test core microelectronics for 5G radio base stations.

"This facility and its employees will further strengthen Ericsson's 5G software development," Ericsson said.

"Baseband provides intelligence to the radio access network. It is also the interface between the core network and radio units, processing and forwarding voice calls and internet data to end users."

Ericsson is also planning to invest more in its artificial intelligence (AI) and automation capabilities by employing 100 specialists in the North American region by the end of this year.

"This team will work on utilising AI technologies to accelerate automation, examine product roadmaps, and explore new business opportunities," Ericsson said.

The networking giant added that it will begin manufacturing more products within the US by Q4, with its first US-built 5G radios to be produced by the end of this year with a production partner. Producing more products in the US will "increase flexibility to shorten the timeline for new product introduction and product delivery to customers", it said.

"Ericsson will recruit a dedicated team to work specifically on introducing products for the US market, conducting production engineering, testing/integration, and supply preparations on early prototypes. This will be done in close collaboration with US-based R&D resources," the company explained.

CEO Börje Ekholm said the decision was made after recognising that the US is Ericsson's largest market, making up around 25 percent of the company's business for the past seven years.

"We are strengthening our investment in the US to be even closer to our customers and meet their accelerated 5G deployment plans," Ekholm added.

Ericsson had last month published its financial results for the first half of 2018, announcing net sales of 93.2 billion Swedish kronor (SEK) ($10.5 billion), down from 98.1 billion SEK a year ago as Ekholm again pointed to a future in capturing 5G business.

The Swedish networking giant reduced its net loss from 10.5 billion SEK this time last year to 2.5 billion SEK this half, despite spending more on R&D. R&D spend increased from 17.4 billion SEK to 18.9 billion SEK year on year during the six-month period, "mainly due to increased 4G and 5G investments in networks".

"Customers turn to new technology in order to manage growing demand for data with sustained quality and without increasing costs. This, together with fixed-wireless access, represent the first business cases for 5G. We will continue to invest in securing leadership in 5G," Ekholm said in July.

"This includes further investments in R&D, to solidify our complete 5G portfolio, and investments in field trials. We also intend to selectively capture new business opportunities through our 5G-ready 4G portfolio to extend our footprint as operators prepare for 5G. We provide solutions for all frequency bands for 5G, which strengthens our global competitiveness."

Ericsson had raised $370 million in December to support its 5G, mobile, and Internet of Things (IoT) R&D activities.

During the second quarter, Ericsson made the majority of its revenue in North America, including 11.4 billion SEK in networks, 2.1 billion SEK in digital services, and 800 million SEK in managed services, for a total of 14.3 billion SEK for the region.

Europe and Latin America followed closely behind, with 14.2 billion SEK in total -- 7.8 billion SEK in networks, 2.9 billion SEK in digital services, 3.4 billion SEK in managed services, and 100 million SEK in emerging business and other.

Middle East and Africa brought in 5.6 billion SEK in total, 3 billion SEK of which was from networks, 1.6 billion SEK from digital services, and 1 billion SEK from managed services; and South-East Asia, Oceania, and India brought in 7 billion SEK, 5 billion SEK of which was from networks, 1.1 billion SEK from digital services, and 900 million SEK from managed services.

Lastly, Ericsson made 4.8 billion SEK in North East Asia -- 3.6 billion SEK from networks, 800 million SEK from digital services, and 400 million SEK on managed services.

During the quarter to June 30, Ericsson announced 5G trials with Australia's National Broadband Network (NBN) company; deployed a machine-learning radio network with SoftBank; and trialled LTE on the 3.5GHz band with Nokia and Verizon.

Last month, Ericsson also announced making a 5G data call across a commercial mobile network in partnership with Telstra and Intel, using its commercial 5G NR radio 6488, baseband, and packet core across 3.5GHz spectrum.

It also recently launched a 5G innovation lab in India, saying it will encourage collaboration on 5G technologies and applications between telecommunications carriers, industry, startups, and academia; signed a partnership to fit out Audi's car factories with 5G connectivity; and is helping Singtel launch its 5G trial network at the end of 2018.

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