Douglas Gilstrap, head of strategy at Ericsson, speaks to Sherine Nasr about the privileges and challenges in the ICT industry In 2010, the number of mobile broadband subscribers worldwide, generated by strong growth in smart phones, connected laptops and tablets, surpassed half a billion. Ericsson, a leading player in the ICT industry, estimated that the figure will jump to more than one billion before the end of this year, and it will reach almost five billion by 2016. In the meantime, revenues for mobile and fixed-line operators are estimated to reach around $1,650 billion in 2011 which stands for almost three per cent of the expected global nominal GDP. The ICT industry is surely experiencing sprouts of growth unheard of in any other industry throughout history. During the Ericsson Innovation Forum 2011, held last month in Silicon Valley, USA, Douglas Gilstrap, senior vice president and head of strategy at Ericsson, and 20-year veteran of the ICT industry, talks to Al-Ahram Weekly. In your opinion, what is the main driving force behind all these innovations; a demanding consumer with ever-growing expectations, or is it the ICT companies that constantly work at creating an obsessive desire among consumers to acquire more? Consumers want to connect their different devices to Internet to get access to content, share information or log on to websites such as Facebook. With this knowledge, we and other companies in our industry focus our resources on this specific trend, developing products to meet consumers' needs. It is a combination of the more powerful devices, the developer community, the operators with mobile broadband offerings, Ericsson and others pushing forward solutions to pull these drivers together for the best end-user experience. What has Ericsson contributed to the ICT industry? Some 40 per cent of all traffic in the mobile networks globally runs through networks built by Ericsson. We actually operate and support over 800 million subscribers in our service organisation. Not many know that we, as an example, offer complete TV solutions for the telecom operators; it was actually Ericsson that made it possible for ESPN, the multinational multimedia sports entertainment company, to broadcast the World Cup from South Africa live in 3D. We offer everything from network infrastructure, to operational services, software and consulting services. What is Ericsson's strategy when it comes to fulfilling consumer demand? We envision 50 billion connections in less than 10 years. That means that everything which benefits from a connection to Internet will be connected. That may be your camera for uploading pictures to our Facebook account; your refrigerator that wants to send you a text message that you should buy milk on your way home from work; or your car that needs to upgrade the latest software to further reduce its gasoline consumption. Ericsson's role in all this is to take the lead in the technology development in our industry to make sure all this is made possible. How do you think connectivity will catch on given that not everyone can afford it? Today, there are more than five billion mobile subscriptions in the world, and in the end of 2016, we believe there will be more than eight billion subscriptions. In addition, we estimate there will be five billion mobile broadband subscriptions by the end of 2016. These users will benefit from the trend where communications services are made available at affordable prices. How is it possible to tailor billing mechanisms for the ever growing services and applications? The billing environment is getting more complex, as pricing will be more tailored and more segmented in the future to best utilise the different needs of the user, as new devices and services are entering the market. But this is an area that telecom operators fully focus on. It is what they live from. Billing solutions are also an important component within our services' offering. What we see now is that there are operators offering differentiated price plans with differentiated services offerings and levels so that each customer gets access to a service according to his or her need, looking at network functionality and content services. How do you assess the impact of these innovations on the global economy in the coming period? There are a lot of studies on the economic benefits due to increased penetration within mobile telephone and broadband services and how this helps boost GDP growth and contribute to society. As an example, for every 10 percentage point increase in broadband penetration, the isolated economic effect on GDP growth is around one per cent of GDP. How much does Ericsson spend on research and development annually? We invested approximately 15 per cent of our total sales into research and development in 2010, some $30 billion.
