Ericsson expanding local manufacturing capacity to cater to demand for 5G

European telecom gear maker Ericsson is expanding its local manufacturing capacities to cater to India’s demand for 5G equipment as carriers Bharti Airtel and Reliance Jio begin rolling out their services on 5G networks.

NItin Bansal, managing director India and head of networks for Southeast Asia, Oceania and India said that the gear maker’s contract manufacturer in India had been ramping up capacities.

“Our strategy is that we should build in India for India, that does need scaling up and we are scaling up our production capabilities with our partner Jabil in Pune,” he said.

Ericsson will import some equipment while some will be catered by local manufacturing, however, Bansal said that the target was to fulfill all of India’s local requirements from production within the country.

“It would be a mix to begin with and then eventually we want to hit the target. When it comes to 4G we deliver close to 100%. requirements in India from India. So we will continue to increase our capabilities with our partner and ensure that we hit that milestone for 5G as well. It’s a journey we have already embarked on with the investments with it as part of the production linked incentive with our partner,” Bansal said.

Major telecom gear vendors and contract manufacturers, including Nokia, Cisco, Flex, Foxconn and Jabil, have applied under the ₹12,195 crore production-linked incentive (PLI) scheme for telecom and networking equipment manufacturing. Ericsson has partnered with Jabil for availing the scheme. The gear maker is working with Jio, Airtel and Vodafone Idea, but did not comment on the rollout plans of the No 3 carrier, which has not yet announced any plans of rolling out 5G services as opposed to the other two who will launch next month.

Ericsson launched its mobility report on Wednesday, which showed that 5G consumer readiness in India was strong with more than 100 million planning to upgrade to the services, which was 2-3 times higher upgrade intention compared to global markets

The report found that 5G network performance will be a driver for loyalty among consumers as one-third of the those surveyed for the report were already looking to move to a service provider which would offer the best 5G services. “More than half of 5G ready users expect to upgrade to a higher data tier plan in the next 12 months,” the report said.

While the report found that consumers were willing to pay 45% more for a 5G plan with bundled digital services or apps, the rich media offerings such as simultaneous stream, immersive experiences will unlock the premium segment for carriers. “10% of the consumers are willing to pay a 10% base premium for 5G connectivity only,” the report stated.

High-resolution video streaming or new format video and cloud gaming were likely to drive usage among consumers. The report found that six in 10 of 4G users say they will start or increase using AR applications in real-world once sign up for 5G.

The report revealed that the demand for fixed wireless access was the highest in India among all other global markets which in turn would also drive 5G adoption. The report said that 29% or third of consumers in the survey were willing to move to a broadband provider offering 5G FWA from their existing service provider.