“Ericsson’s business and technology leadership in the telecom industry is a valuable asset to the Silicon Valley. The opening of the company’s 4-building R&D and Office campus in North San Jose’s Innovation Triangle pays tribute to the immense concentration of talent and innovation in the region,” said San Jose Mayor Chuck Reed. “Ericsson will help drive the next stage of growth and contribute to our reputation as the Capital of Silicon Valley. We welcome Ericsson to our community and wish its employees, operators and partnersevery success in their efforts.”
At the unveiling of its new Silicon Valley complex in San Jose, CA, Ericsson’s CEO said that cellular carriers (Cellcos) appear to have stopped cutting spending on wireless infrastructure equipment made by Ericsson and other suppliers. Mr. Svanberg was in San Jose, CA to celebrate the company’s new IP and Broadband business division headquarters. It is Ericsson’s only product group based outside of its home base in Sweden.
"The whole world is suffering from decline that is bigger than anything we’ve seen," said Carl-Henric Svanberg in an interview at the company’s new Silicon Valley office. Svanberg said "It is not our impression that there is further cutting being made."
"The first thing you do as a company is not to run to your shareholders and ask for more money. The first thing you do is try to arrange normal financing," Svanberg said, arguing that lending conditions had improved from six months ago.
OK, but where do we go from here? Does Svanberg’s comment imply that the Ericsson needs to borrow money to finance it’s wireless network infrastructure buildouts? Many pundits have claimed the bottom of the recession is behind us, but it will take at least two years to see any growth.
The key issue is that mobile network operators will have a tough time offering true high quality data services without negatively impacting their very profitable voice services. This is because 3G networks are bandwidth limited, resulting in high volumes of data consuming the bandwidth that would otherwise be used for voice calls. The result will be data caps and blocking of high bandwidth traffic types by the mobile operators. What can Ericsson due to change this dynamic?
Ericsson Silicon Valley is claimed to represent the fifth wave of innovation for the Valley — Silicon Valley 5.0* – the convergence of the Internet with Mobile Broadband+. Ericsson’s new campus is aimed at driving research and development in broadband, mobility and IP – the key elements for taking the Internet mobile.
+ This author strongly disagrees with Svanberg’s opinion of Silicon Valley as an innovation hub. As a 40 year resident of Santa Clara, I believe that innovation has precipitously declined in the past few years and the financial meltdown and venture capital retrenchment has put a further damper on the innovation culture here.
Ericsson’s Silicon Valley campus is the latest investment by Ericsson in North America, following the company’s announcements that it won a landmark seven year $5B managed services contract for Sprint and its recent bid for Nortel Networks’ CDMA and LTE wireless business.
"If you are a world class engineer in IP, you are here, and if you’re not here, you move here," said Bert Nordberg, the head of Ericsson’s 1,200 employee Silicon Valley business. Isn’t that a bit self serving? Does anyone believe that Silicon Valley has a monopoly on IP software engineers? What about India, Russia, or the Ukraine?
We wish Ericsson good luck in their Silicon Valley operations and hope they will be more co-operative with the trade press than they have been recently. Also, we’d like to know more about their initiatives to increase wireless backhaul capacity as well as topology changes that can improve spectrum efficiency and result in lower cost per bit transferred over mobile networks.
FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson IP & Broadband
Phone: +1 408 750 8606