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The Warsaw Voice » Business » April 28, 2011
Business & Economy
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We Have What the Market Needs
April 28, 2011   
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Staffan Henriksson, President of Ericsson Polska, talks to Marcin Pawlak.

Links between Ericsson and Poland date back over a hundred years. Can you tell us a little about the company’s history here?
They actually date back to the beginning of the 20th century, 1904, the period when Poland was still partitioned among foreign powers and Warsaw was under Russian control. We were in the historic PAST [Polish Telephone Joint Stock Company] building on Zielna Street. That’s when we were in business as an operator, a modern-day TP, and we supplied technology as well. Of course that ended fairly soon after that, when TP was created, followed by a small intermission during the communist years, but we were back on the market in the late 1980s. We had a small office open here the whole time, because we had a lot of equipment that we needed to maintain, so we really have been here uninterrupted since 1904.

Among other traces of Ericsson’s footprint on Poland is the first switchboard in the country, is that correct?
Yes this was in the Zielna street building, where we helped develop technology for the Polish national operator in the inter-war period. Ericsson was a big manufacturer in Poland. PASE (Polska Akcyjna Spółka Elektryczna) was fully owned by us.

What’s your view of the current state of Swedish-Polish relations?
Swedish-Polish relations have plenty of room for improvement. The May visit of the Swedish Royal Couple with 40 government officials and business executives is the best example that both sides recognize there’s a need to improve relations.

How is Ericsson currently investing and changing the telecommunications market in Poland?
Ericsson is doing a lot of investment. The last 18 years we have been investing continuously in basically two areas. One area is R&D, where we’re cooperating with a Polish company called Ericpol, and we’ve been investing there in software development. They’ve been developing software for our core products such as 2G, 3G, 4G for many years, and we’re keeping over 1,000 people busy at Ericpol developing software for Ericsson. It’s also worth mentioning that Ericsson was a pioneer in Poland in setting up wireless networks.

How does your partnership with Ericpol work?
They were set up by a former Ericsson employee, and we are their biggest supporter. They’re currently developing software for us in Cracow, ŁódĽ, as well as Belarus, Ukraine, and Sweden. It’s grown into one of the largest software companies in Poland, and Ericsson has been their main customer the whole time. I can say we almost created this company together.

What about other projects in Poland?
The other thing we’re doing now is planning a lot of investment in the area of outsourcing—what we call managed services, where we take over the operations of the networks of our customers. We have had such a contract with Netia in Poland for a few years now. There is a trend on the market, with TP looking to outsource in the near future. In a few years I believe all major operators will have outsourced network operations to vendors such as us. What we plan to do in Poland is invest in global competence centers because when you bring in a new network you need to have competence in how it is maintained, fixing it when it breaks and so on. This is pretty interesting, because as long as you have a certain business volume in the country, you definitely have cost-advantages here, with very competent people; then Poland can become a global competence hub in the next couple of years.

The telecommunications market is developing rapidly. With billions of connections and an increase in the movement of data there is an onus on expanding the capabilities of networks. How do you think the telecoms market will develop in regard to this?
One thing you have is tremendous growth in data traffic in the networks, and you can address that in different ways. In the mobile area you have of course continuous development of 3G and new technology and that can handle more traffic. 4G is coming soon as well. There we have a very good study with PTC, a very important customer of ours, and recently we upgraded their network. And what happened was that thanks to modern Ericsson technology they get better capacity, better latency, which is the lag between when you push a button and something happens on the screen. The funny thing is that by just improving the performance of the network, their traffic increased very quickly. Which means there is a huge demand. Ericsson predicted this trend in its Polish consumer research. So I think the performance of the network is crucial, and I believe that with our equipment we can really make a huge difference, as in the case of PTC. Of course in other parts of the network, such as fixed broadband, you will continuously upgrade the performance of networks. For example you may have copper lines, the traditional type, and you can add broadband to these—if you wish to invest, you can also go out and build fiber lines, but that of course involves digging up streets.

Then there are shared networks. In order for our customers, the operators, to be competitive they’re trying to optimize costs, so they can be competitive to their end-users.

So one way is to outsource to us to lower costs, or they can cooperate among themselves. So what’s happening on the market now is that PTC and Orange have announced they will share a mobile network and this is more cost efficient than building one network each. Now they have one each, but they will simply bring them together to have better coverage and lower costs. This has happened in the UK, Sweden, and this trend is now coming to Poland. And this is something Ericsson can do—set up such a network and run it. We have the technology to run the network, giving the operator a very strong cost benefit and making them more competitive.

Data traffic is increasing and operators are looking to cut costs. Ericsson is providing the solutions for customers and operators.

How would you grade the Polish telecoms market in comparison with other countries? What is the biggest advantage of the Polish market?
It’s a very dynamic and interesting market. I think people are very open to new technology and they’re embracing new things. I think we have a history in Poland where we have accepted new things throughout the last 20 years in incredible ways. And when it comes to mobile broadband we’re just at the beginning here in Poland, and we will see an explosion in smart phones, and in accessing the internet through mobile networks. I think the market is comparable to any Western European country. We might be lagging a bit when it comes to the level of investment in mobile broadband, but there’s no difference from an end-user point of view.

At the end of the day that’s what it’s about: making the end users happy. That will require investment in technology and the capability of networks. We have the tools to help our customers, the operators, be successful, in terms of the capacity of their networks and from a financial point of view, as we support network sharing, managed services and outsourcing.
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