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Telcos should not worry about enterprises getting captive networks

Telecom equipment and network solutions provider Ericsson, on Tuesday, said competition is everywhere whether Chinese vendors participate or not in the upcoming 5G projects and that there is no advantage to any company as such.

Chinese companies such as Huawei and ZTE have been excluded from participating in 5G trials because of geopolitical issues and the government’s directives to telecom operators to rely on ‘trusted sources’.

“There are several competitions…if Chinese are not there, it is some other competition. The opportunity is always fair – there is one less competition, there will be another company. So, I would say, our opportunity is the same…whether it is because of geopolitical, operators always look at vendors based on commercial/ technical capabilities, leaderships…these are the ideas they evaluate,” said Thiaw Seng Ng, Head of Network Evolution, SEA, Oceania and India, Ericsson.

On advantages over Chinese vendors, he said: “In a market where there are no Chinese vendors, there are more European or US-based vendors, so the competition is always there.”

Talking about the recent Cabinet announcement on spectrum auction and differences between telcos and big tech companies on captive private 5G networks, Ericsson said the telcos should not be worried about the enterprises, as it would not impact at all.

Also, enterprises purchasing spectrum will depend on the pricing, and if it is too expensive or don’t have the expertise, they will go back to the telecom service providers only.

“Today, private networks generate less than one per cent of the revenues in the business-to-business (B2B) networking space…they are tiny part of the market. Competition is good, choice is good for the enterprise market, but I will be extremely worried as an investor if telcos believe that they can make all of their money on 5G network after private networks, they are deluded because the large opportunity lies on mobile broadband, on cellular handsets and fixed wireless,” said Camille Mendler, Chief Analyst, Enterprise Services, Omdia.

And, if their entire strategy is around private 5G, they will not put their money in the first place because private 5G is not only one element of the total market, she said.

Having said that, she also added that captive network would improve business efficiencies, not only for large enterprises but also for medium and small enterprises.

“It is some misdirection and it’s not all about private 5G is about captive network. Captive networks are good for enterprises, they will force everyone to do good job, delivering services to Indian enterprises of all sizes. By the way private networks is not about really large enterprises…this economy is not built on large enterprises only, so what about the MSMEs,” she said.

Mobility report
Meanwhile, in its latest Mobility Report, Ericsson said 5G will represent around 39 per cent of mobile subscriptions in the region at the end of 2027 with about 500 million subscriptions.

“Total mobile data traffic in the India region is estimated to grow by a factor of four between 2021 and 2027. This is driven by high growth in the number of smartphone users and an increase in average usage per smartphone,” said Seng Ng.

The average data traffic per smartphone in the India region is the second-highest globally. Further, it is projected to rise from 20 GB per month in 2021 to around 50 GB per month in 2027, growing at 16 per cent CAGR.

In India, where 5G deployments have yet to begin, 5G is expected to account for nearly 40 per cent of all subscriptions by 2027. In global terms, 5G is forecast to account for almost half of all subscriptions by 2027, topping 4.4 billion subscriptions, the report added. The Hindu BusinessLine

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