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Europe ‘falling behind’ US and Asia on next-gen networks, says Ericsson

Swedish company’s CTO says lack of government investment is damaging European market.

By Vinod

European nations are failing to keep up with other regions around the world when it comes to embracing next-generation internet networks, a senior Ericsson executive has stated.

Ulf Ewaldsson, CTO at the Swedish telecoms company, warned that a lack of government investment has left Europe at risk of falling behind other regions in the development of next generation network technology.

The current state of industry regulations have allowed too many competing providers to enter the market, the company believes, meaning lower prices for customers but a lack of investment in technology or services which would provide one company with distinct advantage against competitors.

Instead, Ericsson believes the European market should more closely follow the example of the United States, where lower level of competition and looser regulations have led to increased investment by the larger operators.

"North America is driving LTE (4G) and new networks rather than Europe," Ewaldsson told the Financial Times. "We can do three to four years ahead but the public sector needs a longer term vision."

Ewaldsson said that the company was particularly concerned about creating standards around the next generation of "5G" connections offering fast and reliable "always-on" mobile broadband services, not just for consumers, but for the growing market for connected machines and appliances.

The so-called "Internet of Things" needs to spur on the next major growth area, Ewaldsson said, as existing 4G networks were never intended to support a machine-to-machine heavy ecosystem.

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"5G can provide a low latency that is required, for example to ensure that signals being sent to cars are received," he said, adding that Ericsson is already working with rival groups to set standards around 5G.

In order to further highlight the lack of proper government investment, going forward, Ericsson will provide greater disclosure on the level of financial investment and returns it makes in Europe.

"We want to create a bigger agenda in Europe," Ewaldsson said, adding that the company will also provide information concerning the diminishing returns on the high level of research and development it made in the region.

According to the FT, Ericsson spent €2.2bn of its €3.7bn global R&D budget in Europe. The region accounts for about a fifth of global sales, a significant decrease from five years ago, when the share of sales was 28%.


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