SHANGHAI: Ericsson, the world's largest maker of mobile networking equipment, is hoping to be at the forefront of technological and business innovation through enhanced input in the research and development (R&D) and service sectors.
"Ericsson's input in the R&D sector in China has witnessed skyrocketing growth over the past several years, and currently many of the projects undertaken by the China R&D center will serve the global market," said Mats Olsson, head of the China and North East Asia division of Ericsson, speaking on the sidelines at a recent business innovation forum held in Shanghai.
Ericsson, whose R&D cost 13 percent of its global sales income in 2009, now has a team of 3,400 R&D staff in China, in comparison with 470 in 2004.
"Over the past five to eight years, we've been working to transform Ericsson into a provider of both telecom professional services and facilities. We are also a leading provider in terms of multimedia applicational solutions," he added.
Facing increasing telecom market competition from domestic vendors such as Huawei, ZTE and Datang, Olsson acknowledged that the biggest challenge for Ericsson is to seek growth opportunities. "Growth will be difficult if you are not innovative," he said.
At the ongoing Shanghai Expo, Ericsson displayed in the Sweden Pavilion its latest products and solutions based on the next-generation time-division long-term evolution (TD-LTE) network, through which visitors can experience high-definition video from Internet downloads and real-time video-playing.
With operators transforming from traditional telecom service providers to integrated information service providers, their needs for telecom professional services are also increasing dramatically around the world.
"We certainly see the telecom services being a larger and larger component of our business, and I think we're well-positioned in this sector and are constantly managing operator networks around the world, so with that, we have a good view of what customers need, how equipment works, and how to put an end-to-end solution together," Douglas Gilstrap, senior vice-president and head of group function strategy at Ericsson Group, told China Business Weekly.
"We need to be able to become best-graded in terms of services and software and keep up with the technology movement on the hardware side," he said, adding the company would continue to invest in these sectors in the battle for market leadership.
As the biggest driver in the 2G, 3G and LTE standardizations globally, he said the company had moved into the telecom services area long before it became popular among telecom providers, and moved on to help operators on network sharing to improve efficiency.
"Now we are moving into professional consultancy services to help operators to improve their revenue and cost efficiencies and billing systems."
One such example is that Ericsson announced on May 17 that it had landed a management deal in Brazil to operate Telefonica's network operations center in Sao Paulo.
The three-year deal, including core, transmission and ADSL networks, will benefit 14 million consumers with the operator's increased focus on products and services, the company said.
With more mobile telecom terminal manufacturers such as Nokia and Apple involving themselves in the field of content and application, Gilstrap said the trend also brings along great business opportunities.
"The exciting point for Ericsson is that all these smartphones will bring more and more applications that will drive up a lot of activity and work-processing efficiencies," he said.
"I talk to automobile, engineering and oil and gas companies.