Ericsson-LG is changing the way
we communicate by bridging the digital divide
No foreign company has done
business with South Korea
quite like Ericsson. The
telecommunications company’s
ties with Korea date back to 1896,
just 20 years after its founding in
Stockholm, Sweden. It was at this time
that Ericsson installed Korea’s first magneto
telephone switch in the royal palace.
Since then, Korea has become an irreplaceable
partner for Ericsson and the
two have been finding new and innovative
ways for cooperation.
The most noteworthy collaboration was
in 2010 when Ericsson bought Canadian
telecommunications company Nortel's
stake in its joint venture with LG
Electronics, subsequently changing the
name from LG-Nortel to Ericsson-LG
(Ericsson currently holds a 75 percent
stake, with LG holding 25 percent). With
the establishment of the R&D Center in
Anyang, Ericsson-LG has been at the
forefront of the upcoming Fourth
Industrial Revolution, or as CEO Patrick
Johansson, likes to call it, “the Fourth
Industrial Evolution”.
Even while talking about something as
daunting as technological revolution (or
evolution), Johansson’s demeanor is affable
and engaging. When asked why
Ericsson decided to expand its business
here, his eyes light up. “It’s very apparent
that Korea has an advanced and mature
market, and we’re a company with leading
technology. The country’s strong
R&D infrastructure, strategic location and
optimal business environment
were some reasons why we decided to pursue a joint venture with LG.”
South Korea has long emerged as a
magnet for big R&D spenders like
Ericsson-LG, and with good reason—it
spends a significant part of its GDP on
R&D. According to the Organization for
Economic Cooperation and Development
(OECD) report on the global state of science,
technology and industry, Korea
spends 4.29 percent of its GDP on R&D,
almost double the average amount spent
by other OECD countries. Johansson
notes that the company takes full advantage
of such infrastructure, with over half
of its employees focusing on R&D development
at the Anyang center.
The high penetration rate of smartphone
usage was another factor that drew
Ericsson to Korea. Over 90 percent of
Koreans use a smartphone and the number
of cellphones being used in the country
has surpassed 60 million—that’s
almost 10 million more than Korea’s total
population. And it’s this kind of environment
and local market that has helped the
company transform the telecommunications
industry as a whole.
“Our vision is to create a truly networked
society where every person is empowered to reach their full potential,”
says Johansson. Ericsson-LG is well on
its way of achieving this
first
vision, being the network equipment manufacturer to
showcase the next-generation network
5G last year. The much-anticipated 5G
network is 350 times faster than the current
Long-Term Evolution network and
the company hopes to launch it to the
public in time for the 2018 PyeongChang
Olympics.
For Johansson, however, 5G is more
than just faster speed; the network creates
a new variety of powerful services that
blur the boundaries between industries.
Case in point, the company worked with
Korea’s largest wireless carrier SK
Telecom and BMW in 2016 to reveal the
most advanced 5G outdoor mobility trial,
including the first multivehicular 5G trials.
They were conducted successfully on
a 5G test network installed at the
advanced BMW car test track in
Yeongjong Island. SK Telecom and
Ericsson-LG deployed network slicing
and 5G radio network infrastructure to
cover a complete track in the BMW driving
center. The trial with the connected
test cars showed that 5G performance will
support V2X (Vehicular Connectivity) services that require low
latency and consistent high bi-directional throughput.
Such demonstration of 5G-based
connected
car technologies marks the very first
step towards achieving fully autonomous
driving.
As one of the most wired and connected
countries on earth, Korea serves as a
platform for telecommunications companies
to flourish, but it also can cause stiff
competition among such businesses. So
how does Ericsson-LG rise differentiate
itself? By thinking ‘glocal’ and working
with local companies both big and small.
Most notably, it held an event called
‘ETNS (Enabling The Networked
Society)’, offering Korea’s promising
startups the chance to work with the company.
Participating enterprises were able to present their business proposals directly in front of Johansson. And by thinking glocally, Ericsson’s transition into Korea has been relatively smooth compared to that of other foreign companies. Establishing a joint venture with a Korean company like LG has helped bridge cultural challenges. But Johansson knows there is still room for improvement. “There are always opportunities for more dialogue, especially between the Korean government and foreign companies. Korea should continue to be open to global businesses and fully utilize its many trade agreements.”
He adds that Ericsson- LG is working with agencies like KOTRA to exchange new ideas and help improve Korea’s business environment.