Ericsson’s Middle East President, Anders Lindblad, is adamant the telecoms giant will hold off the rising force of Huawei to keep its stranglehold on the industry.
The last time we met was in February at Mobile World Congress, which is the biggest event of the year for Ericsson. What did you learn from the experience this year?
What we tried to do at Mobile World Congress was make the networked society more tangible. What I believe that has happened over the last couple of years is that operators are slowly moving towards being even more outside-in, and not so specific on the different technology solutions. It’s more about an end-to-end consumer perspective, and we can see that they are extremely interested to discuss these consumer cases. Then of course it digs down to technology, but what I felt, at least, is that there is much more maturity in the market right now moving towards a new way of offering communications services in the market. We are maturing as an industry – as most industries do when you introduce competition, you open up the market, and there is continuous innovation. That means that you move the offering from being practically pushed out, and now those who are determining what success is on the market are much more on the consumer side. You really need to be tuned into the consumer needs, so we have to tailor it very specifically.
It’s difficult to ignore the fact that Huawei as a competitor has been getting bigger and bigger. How has this competition affected you?
It’s absolutely made us stronger. Healthy competition is good. It’s like if you’re too superior as a sports athlete, you tend to relax too much and become complacent, and maybe we were a little complacent for a little while. We felt that we had such a gigantic advantage on the market and that is very dangerous. It’s been a really good awakening for us to force ourselves to be more focused on the research and development, more focused on innovation, and really having to execute everything we do. There is no way you can relax in this kind of fast-moving business.
How would you say that competition has influenced your strategy?
I think very little. I personally believe, and I know I share this with my CEO and the whole leadership team, is that strategy is something you do on your own. We really do not copy strategy from anyone else, but of course we read the market. You have to understand what competition does, but the strategy is determined by more of what you believe the future in the market is, and then you determine what you want to do as one of the players. I don’t believe, and I don’t think Ericsson ever believed, in trying to be a fast-moving copier, and therefore I think that the strategy we decided almost 10 years ago is still in place. We pretty much said mobile is our foothold, that’s where we’re really strong; broadband, and marrying that to become the networked society is something we truly believe in. And then what we’re putting into action now is the next wave, which is about TV media and the OSS/BSS stack. This is something we decided a long time ago. Managed services was something we decided was important for the operators 13 years ago. These strategic choices you take is something that you have to decide, and at that time, Huawei didn’t even exist. So it’s quite interesting to see at that time, in 2000, I remember being in England and my fiercest competitor by far was Nortel. They were extremely successful in 3G, a very strong company. A few years later, we bought them – who would have thought that?
Are you going to buy Huawei, then?
[Laughs] I really don’t think so! But if you’d asked me about Nortel in 2000, when I was fiercely competing to get the business with BT Cellnet [now 02], who would even have dreamt about such a development?
What is the main challenge facing Ericsson and the telecoms industry in general right now?
Telecoms is in an inflection point where we are going from a voice to a mobile broadband-based service portfolio. When you make that change, it’s all about the timing of when you do the investment. The ones that were successful before won’t necessarily be successful in the future. When you have an inflection point, the one that can adapt to the change the best – and also choose the right timing to change – will be the winner. Then I think you need to look at some micro economics as well. Europe and the U.S. are not having an easy time, and the Middle East has gone through quite a lot of political changes, so the inflection point coupled with a fairly unstable economic situation means these two are going hand-in-hand as the biggest challenges in our industry right now.
What are going to be the key things that keep Ericsson’s lead through this inflection point and the next few years?
We are determined to continue to be the number one when it comes to the technology. Then also the R&D in the areas we’ve chosen to be in, we also want to continue to be number one in. The continuous investment in R&D is definitely important. The other thing is how we manage to develop our people. I think people will make more difference in tomorrow’s Ericsson. I’m not saying people haven’t been important, but you could almost sell a product by itself before. That’s not good enough in the future – you really need to have people that can be in the projects, be innovative in the solutions, and creating this dynamic relationship with the operators to respond to the dynamic relationships they have with their clients. The third thing is our scale. We are in every country and have managed to create a company that is really scaled globally, so we take advantage of both global processes, methods and tools, and also cost so that we have the most cost-effective R&D and delivery on services wherever you are.
What is your message to our readers?
I think we are on the right track when it comes to the strategic process, and we have deliberately been investing for a long time. So for what the consumer needs, our technology and solutions will do the job, and it will be a competitive advantage for an operator choosing to partner strategically with Ericsson. By working with us – which many, many do – we will be a determined factor for the success of operators, and I think consumers will notice the difference as well.