Is Ericsson chief Hans Vestberg the most connected man in the world?
From Nigeria to New York, broadband will be the next telecoms revolution, says phone firm chief, who’s more than ready
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Saturday 11 January 2014
Hans Vestberg has strict rules. Wherever the Swedish boss of Ericsson is in the world, he will make sure he is back home in Stockholm by 6pm on a Friday night to be with his wife and two children. Then he switches off his mobile and any other device: “If there is an emergency, they know where to find me. Otherwise I switch off; it’s one of my rules. I have rules for everything.”
The rest of the time, Mr Vestberg is one of the most-connected men on the planet. As chief executive of the world’s biggest telecoms company, he’s in charge of networks that provide 40 per cent of the globe’s mobile traffic, manage 2.5 billion subscriptions and run operations in 180 countries employing 113,000 workers. Last year was no different from any other – he visited about 50 countries.
Right now, the skinny, six-foot-plus handball-playing Swede is skipping down the stairs at the Century Club in London’s Shaftesbury Avenue. He’s been updating City analysts on what’s happening in Ericsson’s world. It’s an upbeat message despite fierce competition with its main competitor, China’s Huawei; the rolling out of new 4G LTE technology in the US is marching ahead; Europe is showing signs of perking up; and in the UK, where the company employs 4,000 people, the Red Bee Media acquisition is due to be signed off soon.
“But the main question the analysts keep asking is why I’ve grown my hair long,” he laughs, touching locks that go beyond his collar. And why has he? “You know, men can’t do much to change; we have to wear suits, although I never wear a tie, apart from in Asia sometimes. So I decided to grow my hair.”
The longer hair suits him – makes him look less boyish. Yet Mr Vestberg is still only 48. He’s been running the $38bn (£23bn) giant, which is listed on New York’s Nasdaq exchange, for nearly four years, taking over from his mentor, Carl-Henric Svanberg, now chairman of BP. He started out as a young business graduate working at Ericsson Cables in his home-town of Hudiksvall in northern Sweden and has never left. His first job was in the travel expenses department – someone must have had a sixth sense.
What Mr Vestberg lacks in technical skills – he’s the first non-engineer to run Ericsson since it was founded 137 years ago – he makes up for in chutzpah and the belief that better communications can improve society; very Ericsson and very Swedish. One of his first moves on taking over was to come up with the expression the Networked Society, describing the latest technological revolution that will see us all connected to everything and everyone over the next few decades – the Internet of Things.
“The first revolution was the ICT one. Now we are entering the second: the Networked Society... We predict that in five years 93 per cent of the world’s population will have broadband and there will be around 50 billion different devices connected between people and machines.”
On Ericsson’s numbers – it has a research team of 100 or so boffins crunching data – smartphone traffic will rise 10 times by 2019 and there will be 8 billion mobile broadband subscribers.
The reason is simple – money; growth of mobility comes down to the cost of the handset. “The infrastructure we provide is the same in a remote town in Africa or New York or an archipelago in Sweden: we use the same system and the chips inside the phone are the same. Even if you buy a Finnish, Korean or American phone – it will be Ericsson on the inside. So it’s about the cost of the handset. As handsets come down – we predict to $40 over the next few years – so the numbers go up. For every $10 drop in the price of a handset, there will be another 100 million or so new subscribers.”
Just as Ericsson pioneered digital technology in the 1970s and then mobile in the 1980s, Mr Vestberg is pinning his hopes on being ahead of the game again. And, like his engineering predecessors, he is evangelical about research, spending $5bn a year on R&D. “At heart we are an intellectual company. Innovation will always be integral to what we do,” he says.
“Humans have a tendency to overestimate in the short term and underestimate in the long term. Think back five years. Then 90 per cent of people’s time spent on the phone was making calls. Today 75 per cent of that time is for things other than calls – emails, SMS and video. So the use of devices will keep changing.” Luckily, most of those humans, and many telecoms providers, need Ericsson; it has 27,000 patents, including most of those for 2G, 3G and 4G.
What gets Mr Vestberg fired up, though, is how easily data gathered by mobiles can be used positively to solve the world’s biggest challenges, such as sustainability. It was the subject of his talk at the recent Nobel Week Dialogue in Gothenburg and one he champions wherever he goes on his travels. “Around 30 per cent of carbon emissions could be reduced by using information from mobile data more efficiently for managing traffic, water control and in many other ways. The Estonians are already reading data from mobiles to reduce car congestion, while the use of mobiles in emerging countries like Africa and India for healthcare is just at the beginning. The possibilities are endless as live surveillance connectivity sends information to companies to improve dramatically their way of working, but also for society.”
Yet he’s also aware of how data can fall into the wrong hands – the controversy over the US National Security Agency and the whistleblower Edward Snowden, for example – and the dangers of allowing private companies such as Google or Twitter to pass on private information. Then there’s having data hovering in the clouds, the risks of which no one yet has a clue.
“Of course there are real concerns. That means vendors like us must operate with complete transparency and trust. We need to be humble.”
Let’s hope he has rules for that too.
Pioneers: History of Ericsson
Lars Magnus Ericsson started with a small workshop repairing early telephones
Ericsson devised the single trumpet telephone
Stockholm had more
telephone subscribers than any other country in the world
Ericsson had 1,000 people working around the world – in Russia, China, Mexico and the US
Ericsson engineers invented the first digital exchange
Ericsson signed the first mobile contract to supply Saudi Arabia with mobiles
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