Borje Ekholm, the Chief Executive Officer (CEO) at Ericsson (NASDAQ: ERIC), said that the 5G penetration is rapidly gaining momentum. He said that during a recent interview with Bloomberg Markets: European Open.
Ericsson’s CEO Sees Dramatic Acceleration of 5G Demand
Mr. Ekholm explained that this ‘drastic’ acceleration of the demand for 5G is primarily driven by North American consumers and South Korea. In both of these countries, all the operators have launched 5G services for users.
The CEO of the company explained that they cannot see any impact on their order books as of today after the recent Huawei scandals. Mr. Ekholm mentioned that the geopolitical situation has caused more uncertainty, which leads to lower investments.
Some of the current geopolitical issues include the Brexit negotiations in Europe, a slowdown in the European economy and trade tensions between China and the United States.
Regarding margins and their development, Ekholm said they are investing in taking contracts where they have a clear competitive and technological advantage.
At the moment, these contracts had a small impact on margins and they do not expect a massive change compared to Q3. Nonetheless, the company will take these contracts despite these results.
Regarding 5G expansion he commented:
“We are seeing big demand in the early lunch markets and 5G demand in other parts of the world as well. We are talking about the Middle East, other parts of Asia and a slow pickup in Europe. We are quite bullish on the 5G development and we see a number of opportunities for us there.”
He went on saying that they acquired Kathrein and that it had a positive impact on the company.
5G Availability in the US
Despite the positive comments about 5G that Mr. Ekholm gave, RootMetrics has shared some worrying information about the current situation of the market.
The company tested 5G networks in Atlanta, Chicago and Dallas. However, the team couldn’t connect at all to AT&T’s 5G towers in both Atlanta and Chicago. Meanwhile, the firm couldn’t get connected to Verizon towers in Atlanta and Dallas. Only Sprint was able to offer 5G network in these three cities.
This shows that unless individuals live in a very specific area of a major U.S. city, they would not have access to 5G networks with top speeds.
Currently, it is recommended for consumers to wait some more time before spending the extra money in a 5G smartphone rather than buying it now when the infrastructure must yet be improved.
Although 5G is a very promising technology that is expanding fast, there are many limitations that carriers should address before being able to reach a larger number of users.
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