Ericsson flagged two further 5G agreements with wireless carriers after signing a memorandum of understanding (MoU) with both MOTIV of Russia and China Telecom.
The Sweden-based vendor currently indicates on its website that it had secured 44 MoUs for 5G technology following the MOTIV signing, meaning that the figure has now gone up a notch to 45 with the China Telecom MoU. The number of actual 5G contracts still stands at 18, although Ericsson has previously pointed out that it names its 5G carrier partners and contract wins, unlike some of its rivals.
Rivals Huawei Technologies and Nokia recently said they have signed 40 and 36 4G contracts respectively.
The agreement with China Telecom, unveiled at a 5G event organized by China Unicom, also means that Ericsson has now signed 5G MoUs with all three Chinese carriers, as it already boasts agreements with China Mobile and China Unicom. The latter recently flagged its intention to become the first Chinese carrier to launch commercial 5G services for consumers in seven cities from May 2019.
Ericsson said it has embarked on an “in-depth cooperation” on a 5G test network with China Telecom. “In addition to testing the technical networking scheme, the partners have completed innovative 5G projects, such as the live 4K HD broadcast of a marathon; live 8K HD broadcast of the Women’s World Club Volleyball Championship; 360 degree panoramic live broadcasting, and driving demos,” the vendor said.
In collaboration with MOTIV in Russia, Ericsson plans to test and deploy advanced MIMO (multiple input, multiple output) 4×4; license assisted access (LAA); massive MIMO technologies; and joint lab testing of 5G radio access network (RAN) and packet core. The MoU also includes the deployment of spectrum sharing solutions and the launch of 5G pilot zones on MOTIV’s commercial network.
The Chinese 5G market is set to be the biggest in the world. In March, a report from GSMA Intelligence (GSMAi) said Chinese mobile operators are expected to invest an additional $58 billion over the next two years in 5G network rollouts. The analyst firm is also forecasting that China will account for by far the largest number of 5G connections in 2025, greater than North America and Europe combined.
Although all leading vendors aim to participate in China’s broad commercial 5G rollout in 2020, with trials this year, Nokia’s CEO Rajeev Suri recently stressed the need for a prudent approach when competing for 5G business in this market. In other words, the Finnish vendor wants to avoid the cost of expensive trials in an increasingly competitive atmosphere and would rather focus on commercial 5G launches next year.
The upfront cost of 5G network trials was also highlighted by Ericsson in its first-quarter 2019 results. The vendor said it is taking on contracts that can challenge profits initially and may impact margins in the second quarter, but are attractive from a long-term perspective.