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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (2764)	2/11/1999 1:23:00 PM
From: Mika Kukkanen	Read Replies (2) \| Respond to of 5390

Summary of Sven-Christer Nilsson's Stockholm meeting with business analysts on February 11, 1999 See also Q&A. Sven-Christer Nilsson opened the meeting by speaking about Ericsson's strategies, since all those present were already familiar with the financial results. The review was followed by a question and answer session. Sven-Christer Nilsson commenced by pointing out that convergence was the theme. A convergence of datacommunications and telecommunications is under way, which is exemplified by the recent business deals in which Nortel acquired Bay Networks and Lucent acquired Ascend. IP and Internet technology are the driving forces behind convergence, according to Sven-Christer Nilsson. In addition, the liberalization of former telecom monopolies has helped to create a new market, generating greater competition. Sven-Christer Nilsson believes that operators, in the widest sense of the word, will remain Ericsson's main customers. Ericsson predicts that operators will consolidate and that, in five to ten years, there will be ten to 15 major global operators dominating international communications. In addition, there will be regional and local players. Airtouch, Vodafone, AT&T and BT, as well as Telia and Telenor, were cited as examples proving that this process is already taking place. Sven-Christer Nilsson made use of a diagram with three axes to explain the convergence process. On two of these, there were the traditional telecom players and traditional datacom companies. These will merge. The third axis consisted of Mobility. In his opinion, mobile solutions constitute the dominant development trend; for example, the ability to supply customers with mobile Internet and mobile e-mail solutions. "The third generation of mobile technology will make this possible. GPRS, for which we are now starting to receive orders, can be seen as the rightful forerunner of this technology," said Sven-Christer Nilsson. He believes that Ericsson will hold the leading position in this new world, which we will first experience at the end of 2001. Where success factors are concerned, Sven-Christer Nilsson emphasized the importance of being able to construct robust networks and real time networks regardless of whether it is voice or data transfer that is being carried out. He also believes that Ericsson is the leading company in the field of mobility and that the world center for mobility is in Scandinavia, not in Silicon Valley. "If you're looking for the top experts in mobility, then Kista is the place to look, not the west coast of the U.S." Sven-Christer Nilsson considers good customer relations to be a further strength factor. He also wanted to make it clear that Ericsson is not focusing explicitly on the market for conventional fixed data networks in companies. This was by way of an explanation as to why Bay Networks was not compatible with Ericsson. Sven-Christer Nilsson reaffirmed Ericsson's long-term growth objective. "We aim to grow more rapidly than the market we are active in. In the long-term - 3 to 5 years - the growth rate will exceed 20%." Ericsson regards preparations for third generation technology - mobile Internet - as a new market. Ericsson's assessment is that this expansion will occur extremely quickly, as soon as the market has opened up in a few years. To attain the position predicted by Sven-Christer Nilsson, Ericsson is working in three ways, which he named bridge, migrate and embrace. The major investments already made in today's telecom networks will not be replaced overnight. In spite of this, customers are demanding much more and this is where Bridging comes in. "Ericsson will provide the operators with a cost-effective way of meeting the new world." The CEO used the term Migrate to describe the convergence of fixed and mobile systems. This is where Ericsson's access to network intelligence will help to migrate existing technology to new technology - to secure the network for the future. Sven-Christer Nilsson used the recent BT order as proof that Ericsson is already engaged in this process. The development of GSM and TDMA into GPRS was cited as another example. However, the BT order is considered to be the most significant example. By "embrace," Sven-Christer Nilsson meant that IP and Internet will be included in all systems. One of the first tasks carried out by Sven-Christer Nilsson after his appointment, was an inventory of IP skills and he was satisfied with what he found. Following this review, Sven-Christer Nilsson opened the floor for questions. See some of the questions and answers, I'll post them now!