Summary Bullets:
• Ericsson is investing to solidify and expand its US presence and ecosystem of partners to gain an edge over competitors based overseas.
• Ericsson’s messaging reflects the evolving domestic political climate and changing global geopolitical environment.
In late May 2024, Ericsson hosted industry analysts to its 5G smart factory in Dallas, Texas (US). The key theme of the event was that Ericsson provides “5G made in the US, for the US.” The Swedish telecom equipment provider reminded attendees that it has been operating in the US for 122 years and that 26% of its sales are from North America. Furthermore, it maintains six R&D facilities, employs 7,600 people, and has invested over $7 billion in acquisitions in the region. In March 2024, the company formed a new division, Ericsson Federal Technologies Group, to help the US federal government deploy 5G solutions. Via its Dallas facility, Ericsson meets the government’s requirements to support open RAN technologies and equipment manufactured in the US.
Ericsson’s dedication to the US market came across loud and clear during the event. Not only did the conference take place in its US factory, but speakers included a US congressman, Chief of Staff for the White House Office of Science and Technology Policy, and AT&T Chief Technology Officer for Networks. Ericsson’s messaging reflects the evolving domestic political climate and changing global geopolitical environment. Supply chain challenges and security concerns are top of mind in industries critical to national security, such as telecommunications.
The trend has been developing for years. Nokia, a top Ericsson rival, has a research lab in New Jersey (US) and announced in 2023 that it would begin manufacturing broadband products in Wisconsin (US) via a partnership with Sanmina. Additionally, in late May 2024, it completed its acquisition of Fenix Group, based in San Francisco, California (US), a provider of communications for US federal government. The purchase will augment Nokia’s newly formed Nokia Federal Solutions team, which delivers technology such as IP routing, optical networking, 5G, and private wireless networks to the US federal government. Similarly, Samsung is increasing its investment in the US. It plans to open facilities in Taylor, Texas to build chips and is also expanding its existing factory in Austin, Texas. Other IT sectors are increasing their US investments as well. For example, after building their businesses on the offshoring of IT support, IT services providers have been expanding their local US presence to develop stronger relationships with their clients based in the US and to co-create on emerging, strategic technologies such as AI, AR/VR, digital twins, and more. Nonetheless, Ericsson’s 5G focused investment in the US in unmatched by other international rivals.
Part of Ericsson’s conference agenda, and without a doubt the highlight of the event, was the tour of the 5G factory. Attendees were able to walk through the new facility, which opened in March of 2020 with an investment of $150 million and was expanded in 2023. Cutting-edge automation and robotics technologies were in use across the facility, and autonomous driving robots navigated around attendees as they walked through the factory floor. Ericsson plans to open a second smart factory in Estonia, which will serve as its European manufacturing and technology hub. The company noted that sustainability was a top consideration when building the US factory (and will no doubt also be a priority for the new structure). The US facility is powered 100% by renewable energy, incorporating 1,600 solar panels (Ericsson aims to reach net-zero in 2030).
Ericsson wrapped up the conference by reiterating its strategy to support enterprises, which comprises 10% of its revenue. It highlighted its private network deployments across a range of industries, including municipalities and first responders. Ericsson also noted the opportunities for fixed wireless access (FWA), particularly for smaller organizations and temporary sites such as mobile clinics, pop-up stores, and construction sites. Finally, it pointed to the benefits that Vonage provides to developers by expanding access to APIs to enable enhanced applications.
Clearly, Ericsson is investing to solidify and expand its US presence and ecosystem of partners in the realm of 5G to gain an edge over competitors based overseas. As its customer case studies and the commentary from AT&T demonstrate, the strategy appears to be working. Moving forward, it will need to help its communications service provider partners convey the benefits of 5G private wireless solutions, including those based on public 5G. Hurdles include the lack of 5G-enabled equipment, which is exacerbated by the highly specialized nature of the devices utilized in many industries. However, there is still much room for process improvements in a range of sectors, including manufacturing and healthcare. Ericsson will be well-placed to help organizations recognize the efficiency gains and potential new business models enabled by enhanced connectivity.
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