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=DJ INTERVIEW: Ericsson Says Time Advantage Helps HSDPA
By Magnus Hansson
Of DOW JONES NEWSWIRES

STOCKHOLM (Dow Jones)--Telefon AB LM Ericsson (ERICY) believes current rollouts of high-speed cellular networks will give it a timing advantage against rival network technologies, a company executive said Wednesday.
Mobile telecom operators around the world, including Europe, are upgrading their third-generation networks using High Speed Downlink Packet Access, or HSDPA, which Ericsson favors. The aim is to provide data rates closer to those achieved by its main rival, which combines Wireless Local Area Networks and fixed broadband Internet connections.
"Our tests show there's no significant underlying cost advantage for either technology...time to market is very important," said Mikael Baeck, head of Ericsson's 3G technology unit, told Dow Jones Newswires.
Companies such as Nokia Corp. (NOK) have said they will introduce mobile phones that work on both WLAN networks and traditional cellular networks, without customers needing to bother about which technology is applied at any one time.
The success of this technology could potentially be a threat to vendors of mobile telecom infrastructure, such as Ericsson.
Baeck said he believes it will take a long time before a large enough share of subscribers have the phones to make the WLAN solution a viable alternative to high-speed cellular networks.
"By then the battle may already be over," he said.
Both WLAN and HSDPA, as well as a third alternative called WiMax, aim to provide mobile telecom subscribers with data rates that allow them to connect to the Internet anywhere in same way they do at home or in the office. Users should also be able to watch television and listen to music with high quality.
Baeck said the HSDPA networks will in theory initially deliver data rates around 1.8 megabits per second. However, in reality speeds are more likely to be around 1.2 to 1.3 megabits per second, comparable a basic version of fixed-line broadband Internet, he said.
For Ericsson, the success of HSDPA is important as both the company and analysts expect it to become a key driver of revenue.
According to Baeck, HSDPA is important to Ericsson not only in the long term, but also in the short run. While HSDPA can be implemented in just a few months, even in large networks and consist of just software, an order generally also generates orders for capacity upgrades, services and gear for other parts of the operators' networks.
"These are significant jobs for us," Baeck said.
HSDPA is an industry standard and is also offered by most of Ericsson's competitors, such as Nokia and Siemens AG (SI). However, Baeck said Ericsson has improved its position in the market over the last year.
"The distance to the competition has increased drastically," Baeck said, suggesting that most announced and commercial launches to date have been on networks supplied by Ericsson.
In Europe, Austrian operator mobilkom - owned by Telekom Austria AG (TKA) was the first to launch commercially high-speed services based on HSDPA. Baeck said many others will soon follow.
For the first time in many years, the equipment for consumers, phones and other terminals, will be available simultaneously with network equipment, he said. Historically, operators have had new services ready long before terminals existed that would allow customers to utilize them.

-By Magnus Hansson, Dow Jones Newswires; [phone], [e-mail]

(END) Dow Jones Newswires
02-22-06 1308ET
Copyright (c) 2006 Dow Jones & Company, Inc.