Cellular Express

CELLULAR EXPRESS

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THE INTERNAL MAGAZINE OF GSM SYSTEMS No. 3 2000

The evolution of mobility

New organization l The meganet scenario l Our glocal future

The trends identified in Ericsson Strategic Planning (ESP) form the main theme of this issue of Cellular Express. These trends have been translated into four main business challenges that are highly relevant to our future as a company. Let me recapitulate on the developments that, in one way or another, will shape the way we do business in the future:

No. 3 2000

Adapting to new times 3 .........................................................

Developing the mobile future 4 .........................................................

Megabig, megacomplex and megaexpensive 6 .........................................................

GLOBALIZATION. The future will see a relatively

small number of very large global operators with strong bargaining powers. They will only choose suppliers of proven technical excellence.

All business is glocal 7 .........................................................

GPRS on air!

8 .........................................................

A real change EVOLUTION TO 3G. In the next 18 months about

sixty 3G networks are expected to be rolled out in Europe only! Using products like GPRS and EDGE, today’s GSM and TDMA networks will evolve towards 3G step by step, thus protecting operators’ previous investments.

MEGANETS. The volume of both voice and data

mobile-network traffic is expected to explode in the next few years. This huge increase in use will also bring with it lower subscriber tariffs. The only way for operators to solve this equation will be to lower equipment, operation and management costs. This will put a heavy burden on all suppliers.

In the next few years we expect to see phenomenal growth around new mobile Internet data services. Ericsson must therefore stimulate and facilitate the development of end-user applications in close collaboration with both operators and software companies.

To adapt to this rapid change we need a new organization that not only reflects the new reality but also our vision and mission.

So how have we reorganized to meet these MOBILE INTERNET.

challenges? In a separate article on the next page you will find a more detailed discussion of how the new framework of responsibilities will give us a better view of our markets and help us focus on vital goals.

At our business unit level the reorganization is primarily a means of integrating GSM, TDMA and EDGE into a coherent offering to our customers, thus ensuring continued growth and revenue from second-generation technology and a secure migration path to EDGE-based thirdgeneration networks.

I’m aware that it won’t be easy to merge two business units, which have previously focused on different markets and different business cultures. But I firmly believe that this is necessary: the deregulation and globalization of the telecommunications industry mean that we have to look at the world from an even wider perspective.

As the head of this new, extended business unit I’d like to welcome all of you as we embark on this joint effort to tackle the changes that lie ahead – perhaps Ericsson’s greatest challenge ever.

BO BERGSTRÖM HEAD OF GSM, TDMA, EDGE

New business unit, new ways of communicating By the time you receive this issue of Cellular Express the new organization of the Mobile Systems division will have been launched. For our part a completely new business unit called GSM, TDMA, EDGE has been formed that will bring with it new ways of working and doing business. It will also require new ways of communicating internally, in terms of both content and the channels used. This is therefore the last issue of Cellular Express, the former business unit GSM Systems’ in-house magazine since 1993.

Cellular Express will most likely be replaced by a new magazine designed to reflect both the aspirations of the people in the new GSM, TDMA, EDGE unit and its business ambitions.

BO I MAGNUSSON AND EDITORS

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The cutting EDGE 10 .........................................................

New head of Human Resources 11 .........................................................

Handling 3G supply 12 .........................................................

GSM – still going strong 13 .........................................................

Who wants to work in Mobile Valley? 14 .........................................................

Revolutionary today, everyday tomorrow 16 .........................................................

is an internal magazine for the personnel of Business Unit GSM, TDMA, EDGE .

It is published by KI/ERA/LHI .

PUBLISHER Bo Bergström, Head of GSM Systems, Ericsson Radio Systems AB EDITOR Bo I Magnusson ADDRESS Cellular Express, Ericsson Radio Systems AB, Torshamnsgatan 23, SE-164 80 Stockholm, Sweden TELEPHONE +46-8-757 00 00 FACSIMILE +46-8-757 14 13 WRITERS Johan Beer, Lars-Olof Mattsson, Arne Sandemo and Camilla Sjöström SUBEDITOR David Thompson LAYOUT AND PRODUCTION Strato Information AB COVER Thorbjörn Larsson PHOTOS Per Myrehed and Lars Åström CELLULAR EXPRESS

All articles in Cellular Express are also published in GSM News at http://gsmsystems.ericsson.se under Presslinks.

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Adapting to new times

3G

Cellular Express talks to the new

GSM, TDMA, EDGE business unit head

Bo Bergström and organization project manager Thomas Knutsson about how the new shape of Division Mobile

Systems will help meet future demands on Ericsson.

What are the reasons for this change?

“Our previous organization was created to handle second-generation standards like GSM, TDMA and PDC. The new organization reflects the need to bring secondgeneration technology into the 3G world,” says Thomas Knutsson.

Bo Bergström agrees. “Deregulation and globalization go hand in hand, which means that mobile telephony systems and standards are no longer defined by borders or continents.

Operators not only want their various systems to work together seamlessly they also want a coherent way to migrate to 3G while retaining the full revenuegenerating potential of earlier investments.”

GSM, EDGE and TDMA form one business unit and WCDMA and PDC another. Is this solely for technical reasons?

“No. This reflects not only a shift in technology but also two different market situations,” says Bo Bergström.

“We are committed to a large installed base of GSM and TDMA systems whose owners will in the future demand lower prices, easier operation and management, faster deliveries and high flexibility. Here Ericsson must make the most of its position as a market leader by providing existing GSM and TDMA customers with a migration path to 3G via EDGE in an existing spectrum. This is the reason why GSM and TDMA are now together in a single business unit.

“It’s also vitally important for Ericsson to win a large market share of worldwide 3G sales quickly. This mission is significantly

different: we must prove our excellence in cutting-edge communications technology and win a maximum of new infrastructure contracts from both existing and new operators entering the WCDMA world. That’s why WCDMA is in a separate business unit, which also incorporates the Japanese standard PDC because Japan will be one of the very first WCDMA markets.”

“The missions are different and require different organizations to succeed,” says Thomas Knutsson. “And note that both these two new business units are working with third-generation technology in one way or another.”

Why are some product units shared by all business units?

“There are good reasons for this. Take the Core Network Mobile Systems unit, for instance, which is officially part of the WCDMA, PDC business unit.

What you have to remember is that all the various radio access standards work with the same core network, which is why Core Network Mobile Systems is a shared product unit,” says Thomas Knutsson.

Why put GSM and TDMA together? Aren’t these systems for very different markets?

“They are, or rather, they were. But clearly, the migration path to 3G for TDMA will be via EDGE technology. It’s therefore vitally important to combine GSM, TDMA and EDGE in one unit that can give a coherent and consistent message to the market on how to migrate to 3G via EDGE while protecting earlier investments in infrastructure,” says Bo Bergström.

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“The new organization reflects the need to bring second-generation technology into the 3G world,” says Thomas Knutsson.

One last question. The business unit’s structure dates from 1992. Since then segments have been replaced by divisions. How long will this new organization last?

“That’s impossible to say, obviously. But after many years at Ericsson I feel quite confident in saying that technological development and evolving markets sooner or later make all organizational models obsolete!” says Bo Bergström.

Five new business units From 1 October the new organization of Division Mobile Systems will be in place. The division will consist of five business units and four shared core product units, involving in total about 51,000 employees.

These are the business units: • GSM, TDMA, EDGE, which includes GSM, TDMA, GPRS, EDGE and NMT/TACS. • WCDMA, PDC. • CDMA, including cdmaOne and cdma2000 systems.

• Transmission Mobile Systems, which includes, for example, Mini-Link and cross-connection products.

• Special Business Operations, which includes, for example, paging and satellite systems and Mobitex.

The four shared core product units are Speech Processing Products, Antenna Near Products, Application Core for Fixed and Mobile, and Network Core Products.

“Some people think it’s possible to develop mobile phones with full mobile Internet capability; others think it’s possible to transform laptops into palmtops with high-speed Internet access. Personally I like focused devices,” says Mika Uusitalo.

Developing the mobile future Mika Uusitalo, one of Finland’s leading IT profiles and head of Sonera’s mobile Internet technology division, shares his views with Cellular Express on the future of mobile Internet and Sonera’s collaboration with Ericsson in this field.

Sonera is extremely active in the international arena, especially for an operator of its size. In the mobile communications sector Sonera has invested in companies that operate in rapidly emerging markets such as Turkey, Hungary, the Baltic States and Russia. Sonera’s most significant investments in fixed network companies are in the Baltic States.

Sonera has formed partnerships in Italy, Spain and Germany in an effort to acquire 3G licences. Besides Finland, licences have so far been won in Spain and Germany. At the same

4

time Sonera is moving rapidly away from being a traditional telecom operator and positioning itself as an Internet service provider. In other words the perfect company to work for if you are devoted to creating new mobile Internet services for the international market.

“Sonera is really focusing on mobile Internet services, which of course means I find the work of my division very stimulating,” says Mika Uusitalo, vice-president and head of mobile Internet technologies at Sonera. “It’s not just a matter of getting enough development resources, which we do, but also the freedom

to test new ideas and try new things. We don’t have to do things according to protocol.”

Sonera shapes the wireless landscape with its mobile Internet portal, Zed, which contains features such as directory services, news and sport. Others are SmartTrust, for secure e-commerce, and Sonera’s concept for application service hosting. However, it is clear from talking to Mika Uusitalo that we are only just seeing the beginning.

“Today the situation is very much like it was for the Internet in the early 1990s,” he says.

“Although the Internet had been around for years it was still very simple and had relatively few users. Then something happened: usable browsers suddenly appeared – and the whole thing exploded.

“The same thing is now about to happen with mobile Internet, providing enormous opportunities for both new and existing players.

The question is in which direction will the market go? I’m convinced that the winners will be the Internet service providers and operators that realize that this is an open market. Those that try to keep parts of it closed and reserved for themselves will be the losers. I also believe the Internet is the main driving force behind mobile Internet.

“This means that new technologies must be designed to keep the market open, just like the Internet is. WAP, however, is currently offered as a closed system. What we need is free and open WAP-based access to the Internet so that everyone can become a service provider. I hope future versions will do this.”

OPEN MARKET.

To Mika Uusitalo the technology is secondary. “The revolution will not be brought about by new technology but by new user interfaces,” he says. “Consumers want simple, easy-to-use interfaces that will give them the content they want and can be modified if necessary.”

This brings us to new end-user devices, an area in which Mika Uusitalo sees developments moving in two main directions. “Some people think it’s possible to develop mobile phones with full mobile Internet capability; others MULTIBAND DEVICES.

think it’s possible to transform laptops into palmtops with high-speed Internet access.

Personally I like focused devices. A good mobile phone and a good palmtop with GPRS would be great. I don’t think users will mind carrying two devices about.

“But I also think we’ll see a multitude of different solutions. New devices will appear and people will choose for themselves. The technology won’t be uniform either. UMTS will be complemented by wireless local area networks, both indoors and in public places.

Perhaps we’ll also see multiband wireless devices, or even mobile phones, for 2G, wireless LANs and UMTS.” “It’ll be a mess, actually.

Our job will be to try to manage the chaos, primarily by creating transparently managed end-to-end services, regardless of the technologies involved.”

Sonera collaborates closely with Ericsson in the areas of GPRS technology and mobile Internet. “The main requirement from me as a developer is that a supplier should be able to adjust products rapidly to fit me better. Conformance to open standards is also very important,” says Mika Uusitalo. “I think Ericsson is going in the right direction in this area; new things are appearing faster than before. Whether it’s fast enough is another question.

“I also think Ericsson should expand its business. Selling boxes is simply not enough; applications are playing an increasingly important role. From what I’ve seen Ericsson has started to become more active in this area.

“Our philosophy regarding the choice between in-house development or buying externally is to try to collaborate with our suppliers as much as possible. If something can be bought externally we buy it, rather than develop it ourselves. On the other hand it’s more difficult for competing operators to copy something we’ve developed ourselves.

“What we want from our suppliers merely reflects what will characterize the telecoms world of the future: speed, flexibility, commitment and diversity.”

OPEN STANDARDS.

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Close and longterm collaboration Ericsson has been a supplier to Sonera for many years, often being the first to provide new technology, such as the first deliveries of GSM infrastructure. Today about a quarter of Sonera’s GSM network has been supplied by Ericsson, the rest by Nokia. Sonera and its partners around the world account for a substantial share of Ericsson’s sales.

Among other things, Sonera and Ericsson collaborate in the development of secure transaction systems for mobile Internet, an area in which the two companies recently launched the world’s first solution. “Sonera is clearly a customer in the front line of new technology,” says Peter Lindholm, key account manager for Sonera at Ericsson Finland. “Sonera has never been an ‘easy’ customer, but that’s only because it has such high expectations. For us here at Ericsson in Finland this has been a clear advantage. It forces us to be the first to solve problems and gives us new ideas for solutions that will be in great demand in the future.”

Mika Uusitalo, Internet pioneer Mika Uusitalo was one of the pioneers who brought the Internet to Finland in the late 1980s, at which time it was used almost exclusively by the academic world.

In 1986, as one of the first developers and while still a student, Mika Uusitalo witnessed Tampere become the first city in Finland to be connected to the Internet.

In 1994 he joined Finnish operator Sonera. Apart from a period in the US working for US West, he has stayed with Sonera, developing Internet and multimedia technology. Today he heads Sonera’s development of mobile Internet technologies. He recently won an international industrial award for his work, which also features regularly in the Finnish media.

Megabig, megacomplex and megaexpensive new applications create a previously unseen level of complexity that leads to difficulties in handling. Operators will have to rethink the way they build and manage their networks,” says Mikael Willgert.

Mega-networks will come into being at different times in different markets. According to Patrik Regårdh this is not only a scenario but also already a reality today for some operators. “Obviously not all operators will end up running mega-networks everywhere, but many operators will soon face some of the problems associated with them.”

To meet this challenge GSM, TDMA, EDGE has launched the MegaNet programme, whose task is to drive the develop of practical solutions to mega-network problems.

“Our first task is to make the whole GSM, TDMA, EDGE organization aware of the reality of the challenge. We absolutely have to be prepared for things like price pressure, shorter delivery times, sudden huge increases in volumes and new demand for operational and management services,” says Mikael Willgert.

A typical example of what can happen if you are not prepared is the American operator AT&T. When AT&T announced substantial tariff cuts there was a large unplanned growth in traffic. “Some growth was of course expected, but not that much! AT&T had to get its hands on more network equipment in a hurry.

Unfortunately Ericsson wasn’t prepared for this sudden increase in demand and AT&T was forced to buy equipment from another supplier,” says Patrik Regårdh.

Although the complexities of mega-networks pose a big challenge to all suppliers this should not be seen only as a potential source of trouble.

“This is also a great business opportunity for Ericsson,” says Mikael Willgert. “If we become the best problem-solver for meganetwork operators, we’ll not only retain but also enhance our market position.”

According to Patrik Regårdh there are two important trends that will affect operators managing increasingly complex networks. The first is that it is becoming too inefficient to integrate products from different manufacturers.

Operators are therefore tending to choose sole BE PREPARED.

“We want twice the capacity twice as fast for the same cost!” could very well be the typical challenge to operators in the future. Growing traffic, decreasing tariffs and increasing network complexity make up the meganet scenario operators and suppliers alike must prepare for.

Meganet – yet another buzzword or a serious future challenge for the telecommunications industry?

MegaNet programme managers Patrik Regårdh and Mikael Willgert have no doubts whatsoever. “A mega-network can be loosely defined as a very large network in which the network’s size, sharply increased traffic and

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suppliers for whole networks, or at least large parts of them. The other trend is towards buying standard plug-and-play solutions. Both trends are an opportunity for suppliers, including Ericsson, to create better solutions and become more efficient at developing, manufacturing and time to customer.

All network operators face one universal problem in the mega-network scenario – staffing. “Staffing for network roll-out and operation may become such a bottleneck that we’ll simply be forced to make improvements to enable growth. This is also a terrific business opportunity,” says Mikael Willgert. Patrik Regårdh agrees. “It means that in addition to offering more efficient solutions we’ll also have to improve our partnership skills and work in close collaboration with our customers at all stages.”

There is no doubt that for large operators meganet scenarios form a very real future challenge. “Ericsson is therefore preparing to offer solutions that will make life easier for mega-network operators,” says Mikael Willgert. “We call them MegaNet Solutions.

These are based on products, tools, processes, and so on. We’ve already started to evaluate the solutions in collaboration with one large customer and more will follow soon.”

Patrik Regårdh (left) and Mikael Willgert define a mega-network as a very large network with a high level of complexity that leads to difficulties for the operators in handling it.

Anders J. Ericsson and Anders Henriksson agree that there is no room for half-hearted attempts in this business.

All business is glocal Operators are becoming fewer and larger – the future will see a relatively small number of very large players with strong bargaining powers. The continuing globalization of the telecommunications business means a new focus for Ericsson’s sales force.

As head of sales strategy and tactics at business unit WCDMA, PDC Anders J. Ericsson’s job is to be on the lookout for changes in the market. One trend is very clear: operators are going global. “This will obviously mean fewer but larger accounts to fight for: perhaps only ten truly global operators. This may not seem very many but their sheer size and involvement in markets all over the world will make them vital customers.

“It will also mean focusing on and working closer to both large network operators and

potential service builders. Selling equipment won’t be enough in the global marketplace, we must become the preferred system integration partner.”

Anders Henriksson, chief of staff and head of operational development at the same business unit, sees this new focus as a natural evolution process. “Any company that wants to stay in business must meet its customers’ needs.

All operators would in fact like to become global, but it takes a certain size to exploit your synergies in branding, services and infrastructure to the full.

“Indeed, any operator deciding to stake a claim in a specific market or country must be totally committed – there’s no room for halfhearted attempts in this business. We must therefore be perceived as helping operators in their ambitions to grow.”

LOCAL MARKETS. “Operators are making huge

investments, not only in infrastructure but also in 3G licences. To make the most of their

7

investments they have to go global. It’s either that or remain a second-rate player,” says Anders Ericsson.

For the supplier’s sales force the first visible change will be the increased importance of global account managers. “Global activities require companies to be more centrally controlled. Because decisions about technology will be made centrally, we have to match operators with our own organization,” says Anders Ericsson.

The focus on global account management does not however mean that local companies will be left with nothing to do. “Decisions about what services to offer or develop will often be made locally, since business cultures and the demand for different types of services vary from country to country,” says Anders Henriksson.

“Radio base stations, which are sold in large quantities over time, are a typical example of equipment that can be specified centrally.

But what about network servicing, application development or business consulting? These services are much more difficult to specify in detail at a central level. Local Ericsson companies will therefore play a key role in tailoring the services offered in their markets.”

Anders Ericsson agrees.

“Deciding which decisions to leave to local subsidiaries is something that any operator with global ambitions will need to understand.

Cultural differences are often underrated or ignored. Ericsson is in a very good position here with its long tradition of representation on all five continents.”

Another side of the globalization coin is price pressure, according to Anders Ericsson.

“Price is important but it’s not the most important issue by a long way. Global operators want total solutions and tend to choose one main supplier that becomes the preferred partner for all system integration issues. It’s therefore vital that Ericsson is perceived as a good potential partner committed to technological excellence. It also means that it’s necessary for the sales organizations of all business units to cooperate with one another much more in the future.”

And they’d better get used to it because the globalization trend is here to stay, predicts Anders Henriksson, at least as long as economic growth continues ripping along.

“Operators are increasingly relying on their market values to raise capital, so they need to be seen trying to establish a global presence.”

GLOBAL PRESENCE.

GPRS on air!

Ericsson delivered the very first GPRS node on 3 July, finally enabling the developers at Ericsson Mobile Data Design AB, among others, to catch their breath. Cellular Express visits the company in Gothenburg for an in-depth insight into this extremely challenging development project.

is currently the largest development project at Ericsson Mobile Data Design AB, or ERV for short. Other interesting projects at the company involve wireless LAN, UMTS, routers and Mobitex.

ERV is responsible not only for developing Mobitex but also for sales, thereby functioning as a miniature business unit too. The president of ERV, Åke Johansson, is something of a Mr Mobitex. His enthusiasm for the technology, which was developed in the early 1980s, is unmistakable. “A few years ago most people GPRS

thought Mobitex was dead,” he says. “Today we sell more Mobitex products in a month than we used to sell in a whole year. There are now three times more subscribers in the United States than there were at the beginning of the year.”

However, we are here to talk about GPRS rather than Mobitex. ERV develops the GPRS service node (GSN) that connects the mobile network to the Internet. The GSN development work has been divided between ERV in Gothenburg, ETO in Grimstad, Norway and EED in Aachen, Germany. The product unit in Kista is responsible for profitability and coordination with other products in the core network, and the nodes are manufactured in Katrineholm in mid-Sweden.

“We were of course rather nervous during the run-up to the first installation,” says Åke Johansson. “It has been, and still is, a project with enormous challenges. It was a completely new system with a completely new platform and completely new applications.”

“This meant we couldn’t reuse any of the technology previously developed by Ericsson. But we could of course use all the knowledge and experience gained from running projects and building systems.

That was our advantage.

“It’s a fascinating product,” continues Åke Johansson. “Everyone wants it – the market is practically screaming after it. And everyone wants to be the first to launch the service.”

The first installation of a GPRS node was in a Vodafone network in the UK. Ten users were initially connected to the node with each mobile generating maximum traffic. This put a total load on the system equivalent to the VODAFONE FIRST.

load one would normally expect to see from 10–70 times as many mobiles.

“It all went as well as could be expected and on 14 August GPRS was implemented in a live network for internal testing,” says Lennart Allinger, who heads the GPRS development division at ERV. “SmarTone in Hong Kong has also launched GPRS very aggressively. At the end of July SmarTone went live in 17 cells and in the middle of August it started to supply terminals to so-called friendly users among its customers. On 1 September Libertel in the Netherlands began its GPRS launch by demonstrating a system to the authorities.”

Since 1996 over 200 people have been working full time or STANDARD COMPONENTS.

more on developing GPRS at ERV, together with many people from other units. One interesting question is of course how the project was designed to be efficient. “The ambition from the start was to use a large number of existing products,” says Lennart Allinger. “The reason for this was of course to shorten the time to market by using standard components. In fact the whole node can be described as a network of SUN workstations and PowerPC cards. However, this also meant a lot of work with our subcontractors to help them become even better suppliers.

“Several units were involved,” continues Lennart Allinger, “But we worked fairly independently of one another. To enable this we needed tools to keep the project together.

These came from Rational, and it’s thanks to them that we were able to build a joint archive, among other things. This meant that everyone had access to the same documents regardless of where they worked. The programming language used was Ericsson’s Erlang, which is very suitable for this kind of product.”

When asked to describe the project’s challenges Lennart Allinger immediately mentions the standardization issues and testing tools. “This is a very complicated and advanced product, which we had to start developing before the standardization work was completed. This CUSTOMER INPUT.

“Developing a new technology before its standard is set has been one of the main challenges in our project,” says Lennart Allinger, who led the development of the GPRS service node.

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Åke Johansson and the rest of Ericsson Mobile Data Design AB in Gothenburg have every reason to feel relieved after the successful installation of the first GPRS nodes.

meant that the product requirements changed over time. In fact I’m not sure the standardization is completely finished even now.

“Another problem was the lack of testing tools. Because the technology was completely new such tools had to be developed by our suppliers at the same time as we developed the product. Sometimes the tools were ready before the things they were supposed to test, but sometimes it was the other way round, which of course created delays.”

One priority in the project was to ensure that customer demands influenced the finished product. Much of the input for this came from the market units and account managers and was coordinated by the product management.

A more unorthodox ingredient was the close collaboration with a specific customer, Vodafone. “The collaboration with our FOA customers was most valuable, especially in confirming that we were on the right track,” says Lennart Allinger.

The GPRS service node The new node in GPRS networks is the GPRS service node, or GSN. In a mobile network it is the mobile switching centre that connects the mobile network to the fixed network. The GSN has a similar function but instead connects to the Internet.

A GSN can be added to an existing mobile network to provide GPRS functionality. Besides installing the GSN only the base station system requires major changes, which means

that the step to full 3G services is not that big. Operators can therefore be offered an easy path to GPRS and 3G with a minimum of infrastructure investment.

In reality the term GPRS service node covers two parts that, in the first product release, are located in the same cabinet: • SGSN (serving GSN), which terminates the radio link protocol, that is, handles the communication with the radio network, for

example, authentication and home location register information.

• GGSN (gateway GSN), which handles the communication with the fixed side (Internet, corporate LAN, and so on) and works very much like a router and firewall. Some competitors have used pure router architecture to build this part. The main difference between a GGSN and a router is that a GGSN handles the context for all subscribers.

The GPRS network

Fixed Network

Mobiles RBS

BSS

MSC

Internet

Mobiles

Mobiles

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RBS

BSS

GSN

Stefan Jelvin (left) was responsible for planning Ericsson’s positioning strategy for EDGE. The marketing of EDGE has already started, headed

by Andy Williamson.

The cutting EDGE Interest in EDGE, which gives GSM and TDMA third-generation capabilities, is growing rapidly. The prediction is that almost all GSM networks will have implemented EDGE within the next few years.

Ericsson’s strategy for evolving current GSM and TDMA technologies towards 3G consists of two main steps: GPRS and EDGE. With GPRS rapidly approaching and 3G licensing in full swing, most interest has been focused on these issues. However, this is now changing as EDGE becomes an increasingly hot topic.

Stefan Jelvin, who works with market strategy for GSM and WCDMA systems, was

responsible for planning Ericsson’s positioning strategy for EDGE. “EDGE enables Ericsson GSM operators to implement nationwide 3G capabilities in existing networks for less than 10 per cent of the total investment in the base station system network.

“This doesn’t mean that operators should choose EDGE instead of new WCDMA networks.

With the increase in both voice and data traffic everyone expects, both upgraded 2G and new 3G networks will be needed to cope with the extra demand. EDGE should not therefore be viewed as an alternative to WCDMA but as a way for operators to safeguard their existing investments.”

One prerequisite for is the implementation of GPRS. EDGE can then be deployed simply by changing (or AWARENESS CAMPAIGN. EDGE

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adding) transceiver units (TRUs) in the radio base stations, and adding some new software.

This simple plug-in solution enables the extremely rapid deployment of 3G-compliant networks. “This is another benefit of deploying EDGE in parallel with WCDMA,” says Stefan Jelvin. “It will take some time to provide nationwide WCDMA coverage, so EDGE is an opportunity to offer 3G services early and to a mass market.”

EDGE TRUs will start being delivered next year, and the software with GSM R9 (system release 9) in 2002. Terminals are expected to be on the market in 2002, starting with a GSM/ EDGE terminal and followed later in the year by a GSM/EDGE/WCDMA terminal.

The marketing of EDGE has already started, headed by Andy Williamson, who works with the marketing and launching of GSM and WCDMA

systems. “The marketing has begun with an awareness campaign aimed at making opinion leaders, the media and decision makers more aware of EDGE,” he says. “We are of course also working with several key customers that have already realized the possibilities of this technology.”

“It will be very important for operators to include EDGE when writing business cases for new networks,” continues Andy Williamson, “because it will have a considerable effect on revenues. We expect almost all GSM/TDMA networks will become EDGE networks in the end. The benefits are so obvious and the costs are so low that we can’t see any reason why operators shouldn’t upgrade to EDGE.” The footprint of EDGE-capable networks, that is, the combined GSM and TDMA footprints, will in the short term be many times greater than any other single 3G technology. The existing user base of GSM and TDMA subscribers will contain about a billion subscribers by late 2002. The roaming capability for subscribers with dual EDGE and UMTS terminals will be truly global.

ONE BILLION SUBSCRIBERS

Speeding things up GPRS is a standard for packet switched data in the core network. EDGE is the same standardization for the air interface, that is, between the mobile device and the radio base station. This means that GPRS and EDGE together considerably speed up packet-transfer rates, compared with GPRS alone.

New head of Human Resources A clear business orientation, a focus on leadership and a love of water are a few of the things that characterize the new head of Human Resources and Organization at GSM, TDMA, EDGE.

to is good leadership,” he says. “The next question, of course, is what is good leadership?

Personally I think it’s mostly about creating an atmosphere in which everyone finds work enjoyable.”

“Wages and bonuses are of course also important, but I don’t think that people today work just for the money, especially not in a company like Ericsson.

“One of the main tasks for me and my department is of course to support managers who are trying to become better leaders. But I also believe this requires an element of being yourself. The personalities of leaders must show through in their leadership if they are to gain the trust of the rest of the staff.”

Turning to the private life of Björn Jansson, what is this thing with water? “Water has played a big role throughout my life,” he says with a smile. “I spent most of my first years in a playpen on board a Pettersson boat [type of Swedish motorboat] and I bought my first sailing boat when I was 13. I still live in Vaxholm in the Stockholm archipelago, where I was born and brought up. My connection with the sea is something I’ll never give up.”

STOCKHOLM ARCHIPELAGO.

Björn Jansson leaves behind a 20-year career at AGA, one of the world’s leading industrial gas companies, as he now joins Ericsson as the new head of Human Resources and Organization at GSM, TDMA, EDGE. The many jobs he did over the years at AGA included heading the development and marketing department and being in charge of building gas plants throughout the world.

More recently he was also responsible for human resources in various regions: Latin America, southern Europe and, last year, eastern Europe.

This sounds very much like the career of someone who has an active hands-on approach.

Not surprisingly Björn Jansson has a clear and simple philosophy when it comes to attracting and keeping staff. “This is something that’s discussed a lot, but what it really comes down

WCDMA is basically the same standard as the above in the core network. In the air interface, however, the standard gives even higher efficiency (and bandwidth) since it was defined for packet data from the beginning.

The theoretical maximum bandwidth for EDGE is 384 kbit/s. However, in the same way as standard 56 kbit/s computer modems seldom or never reach 56 kbit/s, it is very unlikely that mobile devices using EDGE will reach 384 kbit/s.

According to Stefan Jelvin it will be reasonable to expect currently planned end-user devices to run at 30–40 kbit/s in GPRS-only networks and at 100–120 kbit/s in EDGE networks.

Björn Jansson, the new head of Human Resources and Organization at GSM, TDMA, EDGE describes himself as someone who likes to get things done, and done quickly. “My main weakness is that I’m not very good at handling details for long periods of time.”

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“In the last 4 years volumes have increased about five times, and we expect this rate of growth to continue for the next 2 years,” says Christer Jungsand.

3G

Handling 3G supply Getting 3G mobile systems up and

running is a challenge in many ways. The speed, the breadth of coverage and the competition, not only with other system suppliers but also with Ericsson’s 2G, will create volumes higher than ever.

Third-generation supply is based on the best practices from 2G and on experience that has been adapted and developed to fit the new requirements. If 2G has been about delivering products, 3G will be about furnishing operators with turnkey networks.

“I expect our future networks to be more standardized and us to offer a total solution containing configured equipment with applications and services, as well as site implementation,” says Christer Jungsand, head of supply management for the new business unit GSM, TDMA, EDGE. “Third-generation networks from Ericsson will enable customers to concentrate on their core business. We’ve already demonstrated this to a large extent in a joint project, Time to Service, together with leading global operator Vodafone.”

The focus of the TTC Global programme is a smoother customer supply flow. Standard product packages have replaced specific orders for components.

Shorter lead times, increased visibility and SMOOTH SUPPLY FLOW.

customers ordering directly on line are good examples of an efficient supply chain.

“We’ve used TTC Global to increase our ability to deal with logistics more effectively,” says Christer Jungsand. “However, many of our customers still expect tailor-made solutions and keep buying components instead of systems.

These customers are usually existing operators with technical organizations of their own.

New operators tend to be more interested in purchasing total solutions. A good example of an existing operator doing business the new way is the American operator AT&T which buys channel capacity for its TDMA systems.”

Demand is currently outstripping supply in the global market for mobile-network components, with a lack of such components as customized integrated ASICs, special and even standard devices and cables, flash memories and other semiconductors. Most of these components are the same for mobile systems, terminals and the computer industry.

“Infrastructure used to play a minor part in this but our volumes are much higher today, which makes us just as vulnerable as the terminal suppliers,” says Christer Jungsand.

“In the last 4 years volumes have increased about five times, and we expect this rate of growth to continue for the next 2 years.”

The boom in traffic and new subscribers that is fuelling the expansion of the networks LACK OF COMPONENTS.

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is putting a great strain on the supply organization. However, the current delivery problems are primarily caused by the shortage of components, not by shortcomings in Ericsson’s supply chain.

“Our suppliers have been too cautious in increasing their capacity,” says Henry Haglund, TTC Global supply manager. “It appears they haven’t had enough confidence in our forecasts, which, together with the forecasts of our competitors, obviously appeared too optimistic. We must therefore try to strengthen our dialogue with the suppliers and provide them with the best possible plans and forecasts, especially regarding 3G. All this information is available within our own organization. We can analyse it better and then share it with our suppliers, thereby helping them to adjust to fluctuations.”

Using the experience gained from TTC Global and its customer focus could be just as successful at the other end of the supply chain, with the suppliers. “We’re working hard to identify all the bottlenecks,” says Henry Haglund, “but it takes several months for our suppliers to increase their capacity. Using our skills in supply and products I’m sure we’ll be able to solve these problems. More openness and visibility in the supply chain will make it easier for all the parties involved to act and adjust to both current and forecast situations.”

DIALOGUE WITH SUPPLIERS.

GSM – still going strong The introduction of 3G does not mean that the development of traditional systems like GSM will slow down.

On the contrary, many interesting new developments are on the brink of bringing 3G capabilities to existing networks.

The next major event in the Ericsson GSM world is the imminent new release, BSS R8, which includes GPRS. The rollout of GPRS will be a major challenge in the autumn. Supply issues are of course at the forefront, as is the need to maintain network quality while GPRS equipment from different suppliers is put together for the first time.

GPRS is not, however, the only new feature in BSS R8. “We’re steadily reducing the level of manual handling in the radio network,” says Stig Rune Johansson, head of GSM Base Station Systems. “We’ve therefore included features that will automate some of the most common and time-consuming activities in managing the radio network. In R8 these include the automatic allocation of frequencies and the management of neighbouring cells. Another area we’re working with is facilitating positioning services. Support for this is included in R8.”

BSS R8 is one of the first development projects in which the practices from our World Class Provisioning improvement programme have been put to full use. Stig Rune Johansson is particularly proud of the improvements in quality. “Our ambition was extremely high: we wanted to achieve a tenfold increase in quality, measured in terms of how customers perceived our product,” he says. “The reactions of customers so far have shown us that we’ve already reached this goal; leading customers are complimenting us on the quality of BSS R8.”

Even more emphasis will be put on positioning in R9 than in R8. “The US authorities are demanding the possibility to position emergency calls by late 2001,” says Stig Rune Johansson. “We’ll therefore include support for two different positioning systems in R9: one based on GPS [Global Positioning System] and the other based on the positioning capabilities of the mobile network.”

GSM 400 is another new feature in this release. “GSM in the 400 MHz band is especially well suited to less-populated areas because far fewer radio base stations are needed in this frequency range,” says Stig Rune Johansson.

Looking further ahead, what comes after R9? And how long will GSM live? “I’m sure that GSM will be here for a long time yet; at least a decade. In fact I’m quite sure that so far we’ve supplied much less than half the GSM equipment we shall supply. The growth in traffic is going to be so large that the networks will have to cope with five to ten times the amount they cope with now. We’ll ALL-IP NETWORKS.

POSITIONING. After R8 comes, not surprisingly, R9,

which is due in the second half of

2001, with a second version in 2002. R9

will be the first release that includes EDGE, thereby bringing 3G capacity to GSM and TDMA networks (see separate article in this issue of Cellular Express). The release will also support coexistence with UMTS.

Stig Rune Johansson believes that GSM will be vital to Ericsson for at least another decade, and perhaps even longer.

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need both today’s GSM systems and the new UMTS systems to handle this. GSM will continue to be very important to our financial situation for perhaps as long as 10 years.

“Regarding functionality one of our most important tasks will be to continue to automate the operation of the networks, which will grow so big and complex that this will become an absolute necessity.”

A major change will be the introduction of all-IP (Internet protocol) networks in which all traffic is transmitted using standard IP. “We’re already preparing for this,” says Stig Rune Johansson. “An IP BSS trial system will be in operation next year. Today’s technologies will therefore continue to be developed and prosper for a long time to come.”

In the new organization Stig Rune Johansson is a vice-president and head of technology for the Mobile Systems division. Urban Fagerstedt is head of Radio Network Systems, formerly ERA/LV.

Who wants to work in Mobile Valley?

The worldwide search for talented wireless-industry staff is getting tougher by the day. How does Ericsson plan to attract and retain highly skilled and motivated people who will doubtless be tempted by offers from its rivals?

Cellular Express talks to Carl-Gustaf Leinar, vice-president and head of Human Resources and Operational Development, director of human resources Kajsa Möller, and business intelligence analyst Cecilia Halvarsson to find out how Ericsson plans to be the employer of choice in the mobile business of the future.

Cecilia, you recently joined Ericsson as a business intelligence analyst specializing in e-business. What made you choose Ericsson?

CECILIA: At university I took a course in IT-based marketing that included a presentation of Ericsson’s work in this area. It sounded very interesting so I talked to the representatives about doing my thesis on this subject. I also have quite a few friends who work here, so I know a bit about the working environment and the opportunities available for developing

and acquiring skills. I also liked the idea of travelling and having a lot of international contacts.

KAJSA: I’m glad students have noticed our attitude towards skills development. Sharing information and helping each other are strong elements of our company culture: you can learn a great deal from a whole host of very able colleagues.

CECILIA: I think Ericsson is very good at maintaining contact with the academic world in general. People know that they have a chance of being offered employment in the future if they’ve done some practical work for Ericsson as an undergraduate. This makes Ericsson very attractive to students.

CARL-GUSTAF: Offering undergraduates the opportunity to do practical work with us is a very good way of spotting real talent. We also run a global trainee programme that we use to find people abroad who have interesting educational backgrounds.

KAJSA: As far as the global aspects are concerned we need to market ourselves abroad a lot more so that we’re perceived as a truly worldwide company. We need to realize that we’re not as well known in the United States as we are at home. This should perhaps be obvious but in reality it isn’t.

CARL-GUSTAF: Yes, what we need is a new unified message that reflects the real working environment better. ‘Make yourself heard’ doesn’t really do this because it doesn’t focus on the individual. The Ericsson way is all about teamwork and we need a message that reflects this. We also need to talk about the real advantages of being employed at Ericsson.

Companies in 140 countries and 104,000 employees are just figures. They may be interesting but they don’t really communicate anything to our potential colleagues.

What about pay and benefits? Cecilia, as a new employee what’s your view?

CECILIA: I was actually very pleased with my first salary. But of course if you’re good at something you expect to be rewarded because it proves that your work is appreciated. Among students, however, Ericsson has a reputation for not paying so well. I think money is important but for me a good working environment is even more important.

CARL-GUSTAF: Only about 10 years ago, in an attempt to be fair – a mistaken attempt in my opinion – all newly employed graduates were given the same salaries. Today we encourage a much more heterogeneous company and culture, and this includes rewards and benefits.

We’re just at the start of this process.

Today our employees are attractive to other companies almost everywhere and we’ve become much more aggressive regarding salaries and rewarding our staff.

KAJSA: As things become increasingly globalized we’re starting to look at how much our employees could make elsewhere and then comparing this with our performance. Looking at newly established IT companies we see speed, simplicity and a strong trend towards shares for everyone. I know that our rewards and benefits are perceived as low compared with them but that’s not the whole picture

“As far as the global aspects are concerned we need to market ourselves abroad a lot more so that we’re perceived as a truly worldwide company,” says Kajsa Möller.

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“I think money is important but for me a good working environment is even more important,” says Cecilia Halvarsson.

either. The new companies expect work to be a lifestyle in which there’s hardly any room for private life. Ericsson offers so much more: both great challenges at work and time for a private life, which makes for a healthy and balanced lifestyle.

We’ve talked about culture and values. How can we compete here?

KAJSA: There has to be room for differences in culture and leadership at unit level. We’re looking at the possibility of offering our staff things that make everyday life a bit easier, such as Internet shopping for food with free home delivery, and cleaning help. We should also consider flexible forms of employment.

Some of us may want to work hard for 2 years and then take a year off to do something completely different. This requires a change in culture and values. We also need to improve our programmes for reintroducing staff who’ve been working abroad for a couple of years.

CECILIA: Maybe it’s becoming more common to reconsider the balance between our personal and professional lives, but it seems to me that it’s still quite trendy to work long hours and at weekends. Being busy shows you’re important.

KAJSA: In a few years’ time we’ll probably be seeing people paying more attention to

keeping a healthy balance between work and private life, which is something we encourage.

This doesn’t of course mean that you can join Ericsson and expect to do your job half-heartedly. Compared with the smaller IT companies the differences are very small regarding ambition and workload, mainly because we attract the same sort of people, who are generally very ambitious and have a strong desire to produce results.

Is loyalty towards employers decreasing?

CARL-GUSTAF: It’s definitely decreasing.

Instead of being loyal to employers people tend to be loyal to their own peer groups and professions and will work wherever they see things developing in the right direction. People also identify with the groups they work in rather than with the company as a whole.

This means that the groups need to establish their own cultures, which is something that’s achieved through sharing the same values. A feeling of solidarity – this is us – is then created, which is very important to motivation, enjoying your work and producing good results.

KAJSA: We need to become much more flexible in allowing different forms of organization. Things will take too long if all procedures are identical throughout Ericsson.

The units need to be able to work out what

they need to do to attract and retain skilled and motivated people in accordance with their own cultures and values. All this, of course, has to take place within Ericsson’s framework of rules and regulations.

CARL-GUSTAF: We don’t by any means want to reduce staff turnover to zero. That would be disastrous for everyone. People leaving us to join competitors are always welcome back, assuming they were good at their jobs, of course. I wouldn’t want to make changing jobs into a life or death decision for anyone; it’s quite common for former employees to discover that the grass isn’t greener on the other side after all. Besides, it’s always very good to experience something different.

“Instead of being loyal to employers people tend to be loyal to their own peer groups and professions and will work wherever they see things developing in the right direction,” says Carl-Gustaf Leinar.

ESP 2000 for employees • Strengthen the Ericsson brand as employer.

• Leading presence in Mobile Valley.

• Culture and values: different organizational forms, cultures and values.

• Possibility for a healthy, balanced lifestyle.

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Facts about the campaign Main sponsors: Division Mobile Systems, Consumer Products division and North America market area.

Agency: Publicis, London.

Schedule: The first phase of the campaign will start on 2 October and continue for the rest of the year.

Target markets: Argentina, Australia, Brazil, Canada, China, France, Germany, Hong Kong, Italy, Mexico, Singapore, Spain, Sweden, UK and USA. Channel mix: TV, radio and/or outdoor advertising aimed at consumers; in-depth communication in newspapers and magazines aimed at industry decision-makers; trade press and Internet presence aimed at main trading partners.

Eva Andersson believes that one day we will wonder how we ever lived without mobile Internet.

Revolutionary today, everyday tomorrow The combined forces of the Mobile Systems division, Consumer Products division and North America market area are in the middle of rolling out the biggest global publicity campaign ever in the history of Ericsson.

The creative idea behind the campaign is that mobile Internet, far from being an inaccessible technology, is in fact a useful tool that will become as familiar and usable as any other everyday object.

Work on the huge campaign, which has required an enormous effort from the project teams involved, began late last November at the first meeting with the London-based agency Publicis. “In December we introduced the agency to our products and strategies and started to write a campaign brief,” says Eva

Andersson, communication strategies manager.

“After that we contacted other units and we now have support from all the divisions.” In June this year the campaign was given the final go-ahead from Torbjörn Nilsson, senior vicepresident of marketing at corporate level.

“About 15 to 20 people have been working on this project at Publicis together with a similar number of us at Ericsson. An internal communication group produces and distributes information about the campaign to the rest of the staff. We have a project manager in charge of the web site, press activities organized around mobile Internet and a PR group whose job is to make sure we get information out about the campaign during the roll-out. We have of course also involved the events people to see what synergies we can accomplish with them.

“The campaign theme: The mobile Internet revolution – it’s an everyday thing, will be seen and heard everywhere, in magazines 16

and newspapers, on the TV and radio, on billboards and posters, and so on,” says Eva Andersson. “In print we’ll be using everyday objects to illustrate the straightforward benefits that mobile Internet can bring. We’ll be demonstrating its everyday qualities by inviting ordinary people to consider its uses. Mobile Internet won’t revolutionize or change our lives overnight but in the end we’ll wonder how we ever lived without it.”

Many of Ericsson’s competitors are promoting the technology as a revolution that will change our lives.

“The focus of their communications is the technology,” she continues. “We are instead suggesting that mobile Internet is something that people will happily assimilate into their lives, rather than change them radically. This focus on consumers is a powerful way of differentiating Ericsson from the others.”

CUSTOMER FOCUS.