Bao Yikang President and CEO of Ericsson
[ 研究显示，智慧工厂每季度可以降低25%的能源消耗。 ]
The epidemic has delayed the speed of 5G deployment in 2020, but 5G deployment is still a priority task in various regions, and its deployment speed depends on the quality of existing 4G and fixed broadband in different countries.
As the world looks forward to reviving the economy after the epidemic, the governments of many countries, including the United States, have announced significant investments in digital infrastructure. Ericsson President and CEO Börje Ekholm said in an exclusive interview with a reporter from China Business News during the Boao Forum for Asia 2021 annual meeting that the pandemic has accelerated the ongoing digital transformation. “In fact, we are beginning to digitize enterprises in a new way.”
However, on a global scale, 5G has not yet officially landed globally, and governments of various countries are still relatively cautious in the supervision of 5G spectrum auctions and supplier selection. There are still policy risks in the commercialization of 5G technology.
In this regard, Bao Yikang said frankly, “Usually, unforeseen risks are often the worst. Like business risks and technical risks, although these risks may occur, you are at least prepared. The hardest things are not. Foreseeable things, this is where I think major problems are most likely to occur. We don’t expect these problems to happen, but this situation may exist.”
The epidemic accelerates digital transformation
China Business News: How has the epidemic changed or affected the deployment of global 5G technology?
Bao Yikang: The pandemic has accelerated the already ongoing trend to some extent. For me, the pandemic has indeed accelerated the ongoing digital transformation. In fact, we are beginning to digitize enterprises in a new way.
One thing that is obvious (not so obvious in China) is that in some other places, not everyone can be connected, and when you disconnect in the digital world, it is a disaster.
Therefore, it can be said that what 5G can do and has not really done is to bridge the connectivity gap. We now see some countries, such as rural Europe or rural America, where there is no connectivity. There, investment will go into infrastructure to bridge this connectivity gap. I hope this is something 5G can do-like providing fiber-like functions in the air.
China Business News: How do you evaluate the Biden government’s plans and prospects for digital infrastructure construction?
Bao Yikang: It is difficult to say exactly how it turned out. But I think it is very clear that American politicians are at least aware of the need to provide connectivity to the people, including students, so that they can truly study and work remotely from home. At the same time, we can also see that 5G technology will promote innovation in new scenarios and use cases. I think that recognizing the importance of connectivity is part of a comprehensive understanding. This is nothing new in China, because it has been part of the plan in China for a long time.
China Business News: What do you think are the policy risks of deploying 5G networks? On a global scale, 5G has not yet been fully deployed, and some governments have changed their ideas about 5G. In this field, what is your biggest concern?
Bao Yikang: Under normal circumstances, unforeseen risks are often the worst. Like business risks and technical risks, although these risks may occur, you are at least ready. The hardest thing is the unpredictable. This is where I think the most likely big problems will occur. We do not expect these problems to occur, but this situation may exist.
Looking for 5G killer apps
China Business News: In your opinion, what are the most promising 5G application scenarios (whether for consumers or for industrial use)?
Bao Yikang: What we see in enterprises is that by transforming the factory into a completely wireless network (the work scenario), all cables can be saved first. Nowadays, in any factory, there are a lot of cables, which you can save.
Second, it can have great flexibility: if the factory does not have fixed wiring, it is much easier to reconfigure the factory. Therefore, with the help of wireless connection, you can move the configuration around.
Finally, the wireless network allows you to connect all the equipment in the factory, so you can really create a digital copy of the factory very easily through wireless connection.
This brings huge benefits, allowing for more flexible manufacturing. I do believe that production will become more personalized, and when everything can be configured via the wireless infrastructure, it will become easier, adjustments can be made when production changes and everything will move together.
I think the entire smart factory and Industry 4.0 itself will be a big use case. But you can have multiple use cases within this scope. This is why the concept of a killer application is much harder.
A smart factory allows you to connect everything without wiring to create a “digital twin”, which can have more flexible production methods, such as drone monitoring of machines, or production monitoring for inspection. All of these appear together in the smart factory.
From a broader perspective, we can talk about the two interesting industries of automobiles and airports. Now everyone is looking for the so-called “killer apps.” In fact, after the infrastructure is complete, this kind of application will naturally appear. This may be beyond the scope of our discussion today.
In Paris, we are helping Air France and our partners provide services for the professional ecosystem of more than 120,000 people in these three major airports in Paris, involving approximately 1,000 companies of different sizes and in different industries. The private mobile network deployed by Ericsson provides a safe, fast and reliable private network solution for the airport. It is suitable for all indoor and outdoor spaces.
We just announced that we will cooperate with Orange Spain to empower the dedicated network of automotive design, testing, engineering and official certification companies (Applus+IDIADA). The private network will include 5G coverage to help develop and certify next-generation automotive applications and services. Orange Spain’s 5G private network will cover the entire site, helping to achieve proof-of-concept testing, development and technical certification. Autonomous driving technology, automated services, vehicle performance, telematics, and in-vehicle infotainment are the key points.
If you turn to the consumer side, I believe AR and VR will be dramatic. For example, you can wear AR glasses, and whether it is a game application or other immersive entertainment activities, it provides a lot of flexibility for creating new use cases.
In South Korea, 5G is providing rich content for games, ultra-high-definition video, and augmented and virtual reality-based applications.
Service providers in markets such as South Korea, China, and Japan are developing AR and VR-based services and tying headsets with 5G tariffs. By 2030, AR alone may bring half of the immersive media revenue for service providers.
Another important focus is gaming, including signing contracts and agreements with international gaming companies and providing innovative gaming services to 5G users. According to statistics from SK Telecom, as of the end of last year, 5G users used gaming applications 2.7 times more frequently than 4G users.
The key to improving 5G services is to build the network well. South Korea has proved this, users can migrate all of their business, and this will also encourage users to increase consumption.
Therefore, my confirmation is that 5G will be more dramatic than 4G.
Causes of 5G backwardness in Europe
China Business News: Some analysts believe that Europe is slightly behind in 5G construction. One view is that the rate of return on investment is not proportional to capital investment as the cause of this problem. In addition, there are also views that this is related to the aging of the population. The population aging in Europe is faster than that in China and the United States. What do you think is the reason why Europe is lagging behind in 5G construction?
Bao Yikang: China is actively building 5G networks, South Korea and the United States will also achieve 5G coverage as soon as possible, and Europe will lag behind in this process. This fact is very clear, unless something changes.
There may be several reasons for the backward 5G construction in Europe: first, 5G spectrum allocation and auction methods; second, 5G website access rights; third, whether to legislate to provide compensation to operators, communication operators pay a lot when building 5G networks Additional cost. I also want to say that the European communications market is relatively fragmented. There are three communication operators in China and 200 in Europe. Europe is an extremely fragmented market, so it is difficult for communication operators to obtain scale effects, and only by forming scale effects can a large-scale communication market be established.
CBN: You once said that the development of 5G can reduce global carbon emissions by 15%. How is this achieved?
Bao Yikang: The communication technology industry has applied smarter algorithms and better asset planning. For example, communication technology can turn off building heating or night air conditioning at night. Through the above practices, we can reduce global energy and carbon emissions, all of which rely on digital infrastructure.
For example, we built a smart factory in the United States. Compared with the old factory that installed a lot of cables, the new factory has realized wireless connection. We installed a lot of monitoring equipment to measure the differences in carbon emissions between the old and new factories. Research shows that smart factories can reduce energy consumption by 25% every quarter.
Therefore, we believe that industrial digital transformation can make a huge contribution to reducing emissions. This is the case in the oil and gas industry, and in the shipping industry, things similar to what we do in the United States can also be used to reduce carbon emissions.
If you believe that sustainable development can solve the climate crisis, I think telecommunications infrastructure and digital infrastructure will be one of the key components. I am excited about this. I think investment is expected to enter the field of green economy, which will also contribute to the development of our industry and the world.
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