Say an operator wants to upgrade to a heterogeneous network, what kind of investment are we talking about?
That will depend on the size of the operator, on the traffic growth that they are experiencing, or on the way they have built their networks. It's very difficult to give you a straight-off answer about the amount of investment that they will be putting in. The most important thing is that they do this in the most cost-efficient way, which starts by improving the existing network, and then moving on to adding more sites. The last part is adding the smaller cells. Small cells provide small coverage, so if you have small cells, you need to use many of them to handle the coverage.
What is Ericsson doing to support the growth of heterogeneous networks in the Middle East?
We are helping the operators right now with all kinds of engagements when it comes to what are the best options for the operators, and how they can improve their networks. We also help them with their options when it comes to adding the small cells — so should they go for Micro cells, or should they go with Wi-Fi, or a combination of both? And sometimes we are working with them on POCs and the business cases, as well as the technical details of the solution.
Do you see much competition in this sphere?
Of course, we have our traditional competitors such as Huawei or Alcatel-Lucent and so on. And now, because we talk about the heterogeneous networks — which is more to do with the smaller cells — then we have other players which are coming into the market. We have Cisco and we have some smaller companies which are trying to enter this market.
We are the leaders when it comes to the market share. But we work with a coordinated network, so the smaller cells should talk to the larger cells. And, of course, if you already have the footprint, not many vendors can offer this kind of coordination. I feel that some of the other competitors are trying to niche themselves on some functionalities and key areas, but it will be quite difficult. We will be facing hard competition, but we will be striving to resolve this through our benefits when it comes to products and solutions.
What are some of the biggest challenges that the Middle East's operators are facing at the moment?
Now the growth is happening around data, we are seeing that some of the operators in the Middle East are still not yet in the smartphone era — they are waiting for smartphones to take off. We need to segment a little bit because you have operators which are already smartphone-oriented, have a high penetration of smartphones and have quite high data revenues. And we have other ones which do not have this. For the ones which are not, the main challenge would be to start pushing the smartphones into their networks, and to be able to get revenue from the smartphone users. For the other operators, which already have big smartphone growth, we see that, for them, the challenge is to be able to monetise the amount of growth they see.
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