Ask Jan Frykhammar, who spent many years at Ericsson (as CFO and interim CEO), why he joined the board of directors of Openet and he will smile. He has, he says “been doing telecoms for 27 years. I wanted to create a new chapter in my life with a smaller, more disruptive company. There are still opportunities and challenges out there, I still want to be in telecoms, and I want to create this new chapter with a smaller company.”
Ask Frykhammar about 5G, and the seemingly continual hype around it and the smile might disappear, but the enthusiasm remains. Although 5G is clearly a little way away he is bullish.
“[It] depends where you are playing,” he says. “On the radio side, there are already use cases and the use cases for the core network and billing are being prepared now. The industry must work on meaningful revenues a year or two from now.
“The thing is I have taken a break recently, have been away from the industry for a year, year and a half, and one thing is clear: it is much closer than before. Things are being tested, things are being developed and we are beginning to think about network slicing for applications around the IoT, for instance. It is not far off.”
When Frykhammar considers the business model around 5G, he is pragmatic. “It is certain that the early use cases will still look like 4G business cases, but this will change as we get closer to a world of sensors, for instance, or as automated, self-driving cars become a reality and the full potential of network slicing becomes apparent.”
Frykhammar has, of course, walked into a company who has spent the last six months or so saying that the operator/vendor business model is broken, and you have to wonder how he assimilates that thinking.
“It is actually a highly relevant comment and idea,” he says. “The old model was one where a vendor would take responsibility for an application or portion of the radio network, but now networks are becoming more horizontal and there are applications on top. It is now like a computer, with different middleware, applications and systems. So yes, a new business model is definitely needed to address this.”
During his year and a half away from the industry, you would assume that a senior executive with an industry goliath such as Ericsson would get more than one or two calls from companies wanting his expertise and advice – including operators. What, you have to wonder, would Fryhammar identify as his priority if he had ended up on the operator side of the fence, in an equivalent position?
“One priority? I would be focused on making sure that there was the best balance possible between revenue today and revenue tomorrow. And it is clear that revenue for tomorrow will not necessarily come from the same sources as revenue today,” he says. “I think that early 5G use cases are of a more industrial nature, which means a focus on the enterprise. Operators will find more diverse revenue sources over the coming years, as industries automate on an unprecedented scale and the potential of automation for those companies is becoming so much more than provided by simple mobile broadband”.
“The other thing to remember about 5G,” says Frykhammar, “is that it is very different from other ‘Gs’. It is more open and while the first use cases will be familiar, in the future there will be dramatic changes.
“The irony, given the lead time, is that standardization efforts are still going on. In 3G, the standards were ready one and a half years in advance. The standards for 5G might be ready only after certain things have launched. One thing is for sure with 5G, there will not be just one killer application.”
And with that comment, the smile returns.