Doug Gilstrap, Ericsson Head of Strategy, at HTIA conference in Jerusalem - Levi Shapiro

Can a 136 year old company with 100000 employees in 180 countries stay quothungryquot Despite an annual 5 Billion USD RampampD budget Swedish telecom equipment maker Ericsson saw its market share plummet in the transition from 2G to 3G To avoid the same fate in the shift from 3G to LTE Ericsson changed strategies in addition to selling equipment they bundled Support Solutions for operators Together with a good old fashioned Price War Ericsson is pummeling its competitors capturing an additional 6 of the market last year for nearly 40 market share The man behind this move is Doug Gilstrap Ericsson39s Head of Strategy Last week he discussed some of the opportunities ahead while in Jerusalem for the HTIA ConferenceThe last seven years have been horrific for telecom equipment vendors Spending plummeted in Europe and North America after the 2008 financial crisis At the same time the entrance of lowcost Chinese competitors Huawei and ZTE forced four companies Alcatel and Lucent Nokia and Siemens to merge into two Among the other three players two exited the business altogether Nortel filed for bankruptcy in 2009 while Motorola sold its networks business in 2011Gilstrap was hired in October 2009 and positioned Ericsson to leverage its investment in RampampD as a source of differentiation quotInnovation is the only way and Ericsson leads the industry in RampampD investment More than 5 billion USD goes to RampampD every year The company has the industry39s strongest IP portfolio and anyone acting in the Networked Society needs to have a license from Ericsson The company has more than 90 license agreements over all generations of wirelessquotFaced with an explosion in data consumption more wireless operators are now frantically searching for the best rather than cheapest solutions Already the number of mobileconnected devices exceeds the number of people on earth And these devices devour data For example by 2016 mobileconnected tablets will generate more traffic than today39s entire global mobile network Ericsson envisions a world in which everything that benefits from an IP connection will have one That means 10 billion mobileconnected devices including machinetomachine M2M modules by 2016 and 50 billion by the end of the decadeGilstrap believes most data applications will be delivered from the cloud quotThis will generate massive growth of data traffic Ericsson forecasts that this will result in the total data traffic in mobile networks to grow 15 times between 2011 and 2017quotDesperate for higher capacity wireless operators are finally increasing their network investments particularly for LTE Worldwide LTE commercial networks cover 455 million people 305 from Ericsson and should cover half the world39s population by 2017 This year Gartner projects telecom spending will rise 108 to 377 billion and another 83 next yearAll of this reinforces Gilstrap39s focus on innovation quotThere is a constant drive to grow and differentiate Strategic areas need innovation from within the company as well as from customers and other partners in order to stay in the lead The market tells us that end users value quality of experience which in turn depends largely on the quality of the mobile data network and excellent services Ericsson will continue to find the best ideas foster them then bring them to market Israel is a hub of hightech innovation and Ericsson is excited to be part of this communityquotFuture growth in addition to mobile network equipment includes quota big range of initiatives related to development of Cloud based services to the growth of MachinetoMachine business etc When it comes to the new areas external innovation plays a much bigger role That includes mergers and acquisitions as in the cases of Telcordia and BelAir as well as the acquisition of an M2M platform Minority investments are also becoming more interesting for the company as are partnerships like the alliance with Akamai that created Mobile Cloud Accelerator We look forward to being part of the Networked SocietyquotLevi Shapiro is a Partner at TMT Strategic Advisors a research and strategy firm focusing on the technology media and telecom sectors He can be reached at levitmtstratcom or via twitter levshapiroRead all Levi39s MediaBizBloggers commentaries at Unleavened MediaCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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Doug Gilstrap, Ericsson Head of Strategy, at HTIA conference in Jerusalem - Levi Shapiro

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