Ericsson starts exploring enterprise opportunity to help Indian telcos monetise 5G

Ericsson has started exploring opportunities in India's enterprise market as telecom operators seek ways to monetise their 5G investments. A senior executive said the Swedish telecom gear maker also sees Vodafone Idea’s plan to raise Rs 45,000 crore in debt and equity as a “positive” sign for the industry and its partners.

“We are looking at India for our enterprise business. We are looking at what India needs as a market and how our solutions can fit that need. We are working on it, and hopefully, we will see the result in line with the 4G and 5G success stories,” Nunzio Mirtillo, Head of Market Area South East Asia, Oceania, and India at Ericsson, told Moneycontrol.

He said enterprises are exploring digital transformation in India, and 5G could accelerate the process.

“Our ambition at the company level is to grow our business over time on the enterprise side while we stay very strong on the network infrastructure…the future depends on how good we are at execution,” he added.

The gear maker globally is helping telecom operators monetise their 5G investments by creating an ecosystem for developers to start using the network's application programming interface (API) features and develop new use cases and applications.

The company aims to create a new monetisation model for telecom operators by exposing and monetising those network APIs. “Once you expose the characteristics of networks to developers, they will come up with use cases,” Mirtillo said, adding that Ericsson is in talks with telecom operators without divulging more information.

“Operators have invested in and built the 5G platform. So, now the time is to expose 5G characteristics like quality of service and location-based characteristics, among others, to application developers to make money from it,” he added.

Analysts suggest that focusing on enterprise could help vendors like Ericsson develop a new revenue stream in India, where a moderation in 5G capex spending is expected through FY25/26.

India sales for Ericsson fell 40 percent sequentially to Rs 4,560 crore in October-December 2023, while they rose 14 percent year-on-year, owing to higher sales of telecom equipment as Airtel and Jio deployed 5G. India generated 12 percent of Ericsson's annual global net sales in 2023 and was second among the top five countries on the net sales metric after the US.

The executive believes that significant use cases will emerge in India in the next 12 to 24 months with the help of the network slicing capability of 5G technology, helping telcos monetise their investments in the next-gen technology.

Mirtillo noted that revenue for India’s telecom industry must increase since the value telcos deliver to consumers through their services has increased significantly. “India has an ideal situation with the structure because you have the government with a very clear agenda with digitalisation and Make in India, which is a great drive. Telcos are investing big time in 5G coverage.”

The executive said that the recent developments related to Vodafone Idea’s fundraising plan are a positive change and will help the telecom ecosystem in the country.

“Vodafone Idea is still waiting to invest…A three-telecommunication operator structure makes much sense in India and is a viable solution. India is a significant market with a huge subscriber base,” he said.

On January 30, Vodafone Idea said it would need 6-7 months to roll out 5G services after securing funding, for which discussions with investors are underway. During the company's earnings call, the ailing telco’s CEO, Akshaya Moondra, said Vi was talking with vendors about the 5G rollout and developing use cases.

As reported by Moneycontrol, the telco is looking to raise Rs 45,000 crore in equity and debt, having secured equity commitments from anchor investors exceeding $1 billion (Rs 8200 crore).