“The world is at the beginning of a new era of progress. Yet between revolutions there is a disruptive period where old systems are challenged. Right now we are at the turning point. ICT will form future cities around the world.
We step by step build our position as a leader in a sector that is removing the borders between institutions and individuals, creating a foundation for a more collaborative approach between city governance and people engaging in new initiatives.We believe that with a multi-stakeholder approach, ICT can be the enabler of a sustainable, prosperous and truly globalized society. It can be used to efficiently manage our use of resources, it can help to design and redesign smarter energy and production systems and it can replace many products with services”
Federico Olavarri holds a Telecommunications Engineering degree from the University of Cantabria (Spain) and a Master in International Business Administration from the Instituto de Empresa Business School. With more than 18 years of experience in Consulting firms and in Telco companies, he has been mainly focused on new business development areas, elaborating the appropriate Go-to-Market strategies and organizational structures to make them profitable and mature enough.
SCASC.- In general terms, how is Ericsson developing its commitment to the Information Society?
F.O.- Ericsson is on a global journey of transformation towards what we call the Networked Society (where every person and every industry is empowered to reach their full potential). A transformation driven by ever-changing market conditions and major technological developments in which our company wants to be a main driver/facilitator.
In the last 30-40 years we have started to see a change greater than the industrial revolution. We are already seeing the vast benefits of a world where five billion of us are connected. Roll forward five years and we can start to imagine what a world will look like when everything is connected.
The pace of change in Ericsson is also increasing as we step by step build our position as a leader in the information and communications technology (ICT) sector.
In recent years Ericsson has minimized the number of hardware platforms, reduced the number of software stacks, made strategic investments and acquisition in targeted areas, divested our handset business and we decided to discontinue the modem development. Perhaps most importantly –we have recruited new talent.
“Cities hold the key towards what we call the Networked Society”
These important steps have allowed us to focus on our targeted growth areas IP networks, cloud, TV and media, OSS and BSS and Industry & Society what we believe are the key areas that will keep us relevant for many years to come.
SCASC.- What is the importance of the Mediterranean region for Ericsson? What differentiates it from other regions? What is your role as Account Manager-Business Vertical Sales Director of the company in this part of the world?
F.O.- The Region Mediterranean (RMED) is part of the Ericsson’s Go-to-Market structure of ten regions and represents 9.9 % of the Group Sales. In the Mediterranean, Ericsson provides leading technology and services to more than 100 telecom operators and more than 30 customers from industries, including media, utilities, governments, transport and automotive companies among others.
We have more than 13,500 people across 25 countries with differences in history, culture, economy and regulatory frameworks. This is apparent in ICT as well.
However our region has a strong tradition of collaboration with universities, local research institutes and the EU, as well as with our customers, RMED has become a hotbed for ICT talent and innovation as well as a global hub for Ericsson key competences.
As Key Account Manager of Industry & Society for Ericsson in Iberia, I primarily address the industry non-telco customers (utilities & energy, transport & automotion, safety & security, public administration, etc.) leveraging on Ericsson’s capabilities and technology in a direct and service-led engagement combined with industry specific competences. Without doubt, this is one of the most interesting areas in the company and it is about exploiting the areas where ICT enables disruptive business innovation in those sectors that are essential in reaching our growth ambitions and diversification wishes.
SCASC.- The ICT is a highly competitive and contested market. There are many 'players' in search of a place of privilege. How does Ericsson faces the challenge? What is its strategy?
F.O.- In the past few years, we have seen the convergence of the telecom, IT, internet and media industries. Many companies are transforming to tap into the potential of digital services and processes in the ICT market.
The ICT market has huge business potential to continue to change the way we live and work. New uses of ICT are constantly emerging such as IoT (Internet of Things) applications and services for the health, security, education, transport, smart cities and utility sectors.
“The ICT market has huge business potential to continue to change the way we live and work”
This is Ericsson’s home turf. As the clear leader in mobile communication, with proven expertise in combining technology and services, Ericsson can help operators and other industries that need advising on ICT. We transform existing ICT solutions and create innovative new ones.
We gain insights from operations and research labs that we feed into our technical development. In parallel, we use technical expertise to fuel our service delivery. This enables us to stay at the forefront of change through insight-based innovation, an exchange of experience and competence between technology developers and service professionals. In other words, we invest in our people; enabling us to master multi-vendor and multi-technology complexity, create a superior experience for our customers – and their consumers – as well as leveraging scale throughout all our operations.
SCASC.- What does Ericsson offer to its potential clients? What business models differences you from other companies?
F.O.- In the field of Smart Cities, Ericsson has deployed about 40% of the mobile infrastructure in about 100 of the world´s most populated cities. This is an infrastructure and a set of networks capable of withstanding the exponential growth in the use of smartphones and their applications, mainly in urban environments, in which about a 70% of the world´s population will be living by 2050 according to the latest estimations.
Our presence in these great cities allows us to see that the business model in telecoms is changing. This sector no longer depends solely on the investment from the public administrations, but rather, it can be funded by the public and private sectors alike as well as by new players entering the market. In this aspect, Ericsson is supporting the existing structures that grant accessibility to the administrations, while also favoring the creation of new ecosystems that include companies from different sectors and local administrations, with the ultimate goal of delivering the benefits of technology to the citizens.
This is a new proposition regarding the way that services are offered to the citizens nowadays. Our new approach includes urban planning as well as creating new business opportunities derived from the use of real-time data, or the refurbishing of the current models of tendering and public purchases.
Additionally, one of our main differentiators is the flexibility to adopt and develop new business cases with innovative business models such as Software as a Service, (SaaS), Infrastructure as a Service (IaaS), Pay as you grow and Managed Services models which easily allow us a full flexibility to take it on board.
In this way, Ericcson partakes in different projects that place cities in the center of our vision of the Connected Society at a global level, featuring several new agreements towards innovation on this field.
SCASC.- The real-time connectivity is changing the way we live. What technological prospects do you anticipate in the nearest future?
F.O.- Real-time data can be instrumental for the success of any new services. The areas where access to real-time data can really make a difference are countless. They involve different scenarios of generation and consumption of such type of data, with entities of arbitrary size in each end of the value chain −generation and consumption, even in both at the same time−, and involving models with open or private access to data generated by a given entity. The underlying assumption is that, in the same way as application stores do, access to real-time data can sometimes be charged thus providing incentives for all the parties in the ecosystem.
SCASC.-What are the new challenges for societies worldwide?
F.O.- We believe that the world is at the beginning of a new era of progress, amid the many challenges both earth and mankind face today such as climate change, the global financial crisis and shortages of food and water. Throughout history, technological revolutions have fundamentally changed society, production systems and way of life. People have prospered and societies have benefited. Yet between revolutions there is a disruptive period where old systems are challenged. The bubble needs to burst before a turning point emerges, bringing with it a rapid build-up of the new technology in question. We saw that bubble in the late 1990s and early years of the 21st century.
Right now we are at the turning point. We believe that with a multi-stakeholder approach, ICT can be the enabler of a sustainable, prosperous and truly globalized society. It can be used to efficiently manage our use of resources, it can help to design and redesign smarter energy and production systems and it can replace many products with services. Within this framework, Cities hold the key. They will be the major arena where we see the vision of the Networked Society taking shape.
SCASC.- How should a genuine Smart City work? How do you think that the smart cities of the future will be?
F.O.- In the same way as the railway formed London and highways formed Los Angeles, ICT will form future cities around the world. By analyzing the relationship between ICT maturity and sustainable urban development, we see the emergence of new Networked Society cities that consider social and environmental benefits and resource efficiency together. ICT creates possibilities that drive change and challenge existing systems and beliefs about how cities work. We predict fundamental change in many aspects and present three key predictions for the cities of the future:
PEOPLE POWER WILL DRIVE URBAN DEVELOPMENT
People rather than institutions will drive urban progress to a larger extent than ever before seen. We are now partly easing the rule of top-down institutions for more bottom-up urban development. New bottom-up innovations empowered by more open public services and governance approaches will characterize this power shift.
GDP WILL BE REDEFINED TO CAPTURE NEW SCOPE OF GROWTH
New, innovative solutions in the Networked Society will alter the traditional view of value creation and wealth. World cities are drivers of economic growth today and their importance will increase further as urbanization continues. GDP will be redefined to capture a new understanding of sustainable value creation and wealth in cities and in nations.
COLLABORATION WILL CHANGE THE CORE OF ORGANIZATIONS
The future presents radically altered conditions for organizations and businesses alike. Organizations will have to step out of traditional models and mindsets in a more connected and individualized society. This development puts pressure on legal systems and city governance structures to adjust accordingly.
Cities hold the key and many of them have the opportunity to leapfrog others by avoiding expensive and increasingly obsolete physical infrastructure and instead moving straight to innovative applications using advanced mobile technology.
SCASC.- ¿Is it possible to imagine the shape of these technologies in 2025? Will there be a new paradigm?
F.O.- This is the million dollar question. In December 2014, Ericsson ConsumerLab presented the hottest consumer trends for 2015 and beyond. From helpful homes with alert sensors to mind-sharing or communication through thoughts, smart cities or domestic robots for everyday chores and company. The insights in the report showed services and products that quite recently seemed beyond imagination are now easily accepted and believed to rapidly reach the mass market.
More recently, our findings from the latest edition of the Ericsson Mobility Report, published in June 2015, show that by 2020 advanced mobile technology will be common place around the globe: smartphone subscriptions will more than double, reaching 6.1 billion, 70% of the world’s population will be using smartphones, and 90 percent will be covered by mobile broadband networks. Advanced mobile technology will be globally ubiquitous by 2020 with 70 percent of people using smartphones and 90 percent covered by mobile broadband networks.
This immense growth in advanced mobile technology and data usage, driven by a surge in mobile connectivity and smartphone uptake, will makes today’s big data revolution feel like the arrival of a floppy disk. We see the potential for mass-scale transformation, bringing a wealth of opportunities for telecom operators and others to capture new revenue streams. But it also requires greater focus on cost efficient delivery and openness to new business models to compete and remain effective.
“Ericsson’s forecast points to 26 billion connected devices by 2020”
An expanding range of applications and business models coupled with falling modem costs are key factors driving the growth of connected devices. Added to this, new use cases are emerging for both short and long range applications, leading to even stronger growth of connected devices moving forward. Ericsson’s forecast, outlined in the report, points to 26 billion connected devices by 2020, confirming we are well on the way to reaching the vision of 50 billion connected devices.
SCASC.- Do you think the average citizen is prepared for all the technological changes coming?
F.O.- Well, I think that with ICT, people have effective tools to turn ideas and new thinking into powerful actions. In fact, citizens are definitively provoking the technological change and contributing to accelerate it. Starting often from a practical need –to improve everyday life– innovative solutions can scale up rapidly and have significant impact on city life world-wide. For example, Airbnb quickly became a credible online community for people to advertise, discover and book unique lodging all around the world. The solution emerged from two roommates who were struggling to pay the rent for their San Francisco loft. The site was founded in 2008, has grown to over 800,000 listings in 33,000 cities and 190 countries, and is today a shaping force in the hotel industry.
At the same time, public services are being transformed all over the world. ICT is removing the borders between institutions and individuals, creating a foundation for a more collaborative approach between city governance and people engaging in new initiatives. Common characteristics of the transformation include opening up decision making, budget processes and everyday operations to public participation.
The aim is typically to create a dynamic co-production process, resulting in more inclusive, higher quality and more efficient public services.
Around the world, examples are springing up of people self-organizing to establish cooperative initiatives that tackle social problems, improve living conditions, increase collaboration, or –in countless other ways– make their cities better places to live.
SCASC.- What are the main challenges in the short, medium and long term that Ericsson faces?
F.O.- In order to successfully implement our business strategy, this holistic approach to efficient capital and resource allocation is essential.
“People rather than institutions will drive urban progress to a larger extent than ever before seen”
We continue to invest in our targeted growth areas IP networks, cloud, TV and media, OSS and BSS and Industry & Society. Building on its strength in mobility, Ericsson is focusing its R&D (our company yearly invest 19% of total revenues in this area) on developing leadership also beyond mobile networks to include cloud computing, IP Networks, and TV and media. Strengthening our position as a leading software company as well as establishing an early leadership in the standardization and realization of the next generation of mobile networks (5G), being a clear services facilitator and acting as system integrator in end to end solutions and sometimes prime contractor using our capabilities to uniquely handle complex deals where many actors are involve, are also important key factors to success.
This journey will continue in order to ensure that Ericsson stays relevant as an industry leader as the telecoms, IT and TV & media industries converge, building the Networked Society.