Alright. Good morning everybody. Hope everyone slept well and used their humidifier as you were advised by Scott early on. Welcome to the final day of TPI 2025. I'm Brian Traymont, the managing partner at Wilkinson Barker Nau, and I have the great honor this morning to lead today's fireside chat with Börje Ekholm, the president and CEO of Ericsson Group. Welcome.
We're very excited to have you here.
It's good to be here and welcome to Colorado.
Thank you very much. So you have a place here, I understand, a home. So it's a beautiful state and we're thrilled to be back. Tell us a little bit about how does one become the CEO of Ericsson and what excites you the most about getting up in the morning?
To become CEO at Ericsson? You know, you start planning very early age 8, 9 and you chart the path out. No, not really. You know, I actually thought I had retired. I used to be CEO of another Swedish company before. And we used to live in the US for many, many years and so we decided to move back and actually move back to Colorado. So I'm a resident in Baile Valley. So that's why I can say welcome to Colorado. It's less than two hours away from here. So I thought I was living the great life in the mountains. I love the mountains and I hope you do as well and don't suffer from altitude sickness. There is one way to prevent that: drink not wine, not booze, but water and start a few days before you come here. Then you'll actually be fine. Anyhow, so I was living my own life. I was a board member of Ericsson in those days and we were going through severe troubles. We were falling behind on technology, losing market share, and ultimately not profitable either. So I guess was asked to become CEO. It was not an easy decision because I loved my life here but still decided that technology is too exciting to pass by and connectivity is too exciting of an opportunity to pass by. So I said okay fine, I'll join. So that was almost nine years ago now. So I've been CEO for a number of years, focused on turning around the company. So when you say what excites me, it is actually that part. I'm a big believer in ubiquitous connectivity. And we can often look back and say, think about the consumer 20 years ago, we were still wearing a digital camera, a phone was a luxury product used by very few. Today, the consumer has largely digitalized on the cellular 4G network. Very few people have a camera, very few people have a photo album, very few people have a fax machine. If you recall, all of these things have now moved over to become smartphone centric. I think that was the first step. Next step is to make truly coverage ubiquitous. So we're going to digitalize enterprises. We're going to leverage new technology like AI. If that's going to scale, we need connectivity. So connectivity is front and center. So I like that technology part. What I didn't realize when I took the job is that it's also front and center in geopolitics. But maybe you're going to ask about that as well.
I will indeed. Just a step back. The fax machine reference was funny because my doctor just asked me to fax something. So apparently they still have those fax machines, inexplicably. What do you see as the biggest challenges facing the company? This is a broader question than something we had talked about in advance but I think it's interesting for context just as you think about the landscape.
Yeah. No, I mean, first of all, I think we are, as one of, I guess, an increasing share of Western companies, facing our biggest and most important competitor in China, and the Chinese competitor is very strong. I would say they are hyper competitive. And that to us, we need to stay at the forefront of technology, technology matching or leading them. If we don't do that, our reason to exist is very limited. So we need to have that focus on always being first with innovation, driving new thinking and the way we approach the business.
You obviously have a big presence in the US, putting aside your home, but as a company, tell us about the role of Ericsson in the US marketplace and how that fits into the company's vision.
Yeah. So, we're a truly global company. We sell in more than 170 countries, call it 180 or something like that. We have people on the ground in 150 countries. So we're truly global. But I would say our most important market is the US. It's for a number of reasons. It's a large market, but it also has front-runner customers. And we need, if we're going to lead on innovation, we need to work with front-runner customers. It's the only way for us to actually drive innovation. So that's important. Besides that, it's of course also depends on the Western partners we have. So we work with a large number of tech companies in the US in very close partnerships in different parts of the business to build that Western ecosystem. So for us, the US as a technology hub is also critically important to drive our business, I would say.
And in general, you touched a little bit on the Chinese companies and Huawei in the competitive landscape, but how is the business evolving? You mentioned focusing on the business segment, for example. Just how do you see that playing out over the next three to five years?
Yeah, I would say connectivity, you know, if you think about the world, we often talk about it as data is the new oil, and data doesn't really have a value unless it is connected and you can do something with it. So the connectivity part is actually a critical part of the full digital stack. We often talk about compute, we talk about storage, we talk about data centers, etc. That gets most of the attention. But if you don't have the connectivity layer underneath, it's going to be pretty much useless. So the connectivity part in that stack is critical. But I would say, given that we have basically developed technology faster than data traffic has grown over the past 25 years, and we're actually developing, you know, the capacity of a network goes up faster than Moore's law because we add spectrum and leverage the technology. So the reality is we're growing faster. So we have seen a very flattish market, and we expect that market to continue to be flattish. So I think we're in a bit of a conundrum here where yes, connectivity is critical, but it's actually a little bit flattish outlook. Is there reason for hope that it will what will move it off flat? I think there are reasons for optimism. You know, the reason why it's flat is actually driven by, think about it. The consumer use cases have driven a lot of the traffic in the radio network. And those use cases today are based on downlink, they're based on video, and relatively limited usage of the capabilities of a network. What we see when the world migrates over to 5G SA, we are actually getting completely new type of use cases. That's when we get low latency, we get much higher uplink, you can prioritize uplink, and we can see that on new applications coming. And here, it's again mentioning China. China has built the world-leading 5G standalone network, with probably around 4 million base stations. That's more than 10 times as many as in the US. To understand the density of their grid, and they are now starting to build new applications leveraging the capabilities in the network. So think about the drone economy there. We can actually have 3D positioning in a 5G network. That is leveraged in that. We start to see it in humanoids, we start to see it in robotics, and think about a factory. There are probably 30 to 40,000 enterprise networks in China. There's probably 2,000 in the US. And that's driving factory automation today. Self-guided vehicles, the simplicity of designing a robot when you put compute centrally in a site or in a data center and almost nothing in the robot. It's almost a mechanical construction. It gets a lot cheaper so you can deploy many more robots, and we're starting to see that being developed in China today. And that's something I think we need to take seriously in the West to actually drive the investments in the digital infrastructure and the digital stack.
So yesterday, Commissioner Simington touched on this fact that the Chinese have led us on the business applications in particular. How did they get ahead of us? Because this has been much discussed in policy circles. If you have a diagnosis for that,
I mean, to think about China, it's an impressive country in many ways, and they're hyper competitive. But what I think is also, they make strategic priorities. If you take telecom as one example, they made a priority back in the '90s of saying telecom is a critical horizontal layer in the economy and we need to make sure that we have a domestic vendor base. So what they did, they spurred innovation. You had probably, I don't know how many, but I would say call it 50 startups in telco, and they started to fiercely compete among each other and consolidate up until there were two left. And when they had gone through that journey, of course, the best survive.
Right. So they drive, when you think about industrial policy, one needs to recognize China has an enormous scale domestically, and when we talk about technology, it's of course you have to lead on technology, but you also have to be first to scale. So China drives that first to scale very forcefully. And you can see that in other industry sectors as well, being batteries, being solar panels. Of course, in telco, you see it in devices.
For sure, you see it across the board. They're actually leveraging that scale, and when you start to get that scale, you build the local ecosystem that becomes very competitive and you drive innovation in the local ecosystem.
So supporting, so when we talk about Huawei as our main competitor, it's part of a much bigger ecosystem that actually supported. So continuing on the China theme for just a moment. It's obviously one of the rare things that unites Washington Democrats and Republicans, Biden acolytes and Trump acolytes, particularly the strategic threat posed by ZTE and Huawei. What is it like to compete with them, and is the playing field level or what does that look like?
You know, one can always complain about the world, but that rarely helps you. So you need to focus on what we can do. So what we do, we work on: let's make sure we have the technology. Let's make sure we make enough investments in technology to be able to compete. For example, there has been a big debate in years back about Open RAN, for example. We're all in on Open RAN for the simple reason that that's our way to leverage innovation in the Western ecosystem. If we can leverage that innovation, then we have a bigger ability to compete with Huawei. So we need to always focus on what we can impact and less on the complaining part.
It's probably good advice for us in life in general. So, policymakers have pursued a number of initiatives designed to thwart the role of Huawei and ZTE in Western networks. That's included banning their equipment in the US, rip and replace. Those are very linear, and then we have things where we are concerned about our competitiveness internationally and do things like the spectrum pipeline for example. There is obviously strong interest, and you've touched on this, in trying to develop globally harmonized spectrum bands so that our market share can compete more effectively against the scale of the Chinese and their at least commercial allies. How important is Western leadership on these issues? We've heard a lot about WRC being in China and what that means or doesn't mean and the implications of that. But just maybe broadly talk about policy approaches and the importance of Western leadership here.
I think it's critically important. We have to start in, I think why it is important. Well, first of all, why is licensed spectrum important? We rarely talk enough about that. But if you need to ensure security, reliability, availability of a network, you really need licensed spectrum. It's very hard to do in unlicensed because you simply don't know what devices are going to come into the equation, so to say. So licensed spectrum is critically important, and securing a spectrum pipeline is very important for a country. Again, if you think about the use cases, disregard the consumer for a moment and say, let's say we can solve the consumer issue, that's a best-effort requirement. But if you're going to have a humanoid or a robot or a self-driving vehicle that's going to be relying on connectivity, it has to be truly reliable. You can't allow milliseconds of interruptions. And therefore, the next generation of automation in the economy, whether it is using AI or it's using other means of automation, it's going to require reliable connectivity, and that requires spectrum. And having that spectrum pipeline is thus a competitiveness of a country. And that's why I think it's important for Western countries to be deeply — I know the discussions about the WRC in Shanghai and the sensitivities of that, and I can understand that, but I would go all in much rather and make sure there is a Western strong representation. Actually, I do believe the US has historically been a leader of spectrum. Think about 4G, for example, was very well managed in the US and actually put the US at the leading edge here on platform companies because they could develop on top of that 4G network. So repeating that in 6G, I think will be important.
And well, okay, let's pivot. We're gonna do some other—let's talk about our Western allies and the Western ecosystem, if we can talk that way. Lots of talk in Washington about trade and tariffs. How are you looking at the tariff issue, and how should we be thinking about it from a telecom and tech policy perspective?
Yeah, you know, this is a truly fluid situation, very much uncertain. What we do, we actually — the geopolitics is nothing new. This came a few years ago. It was pretty clear. So we decided to build a factory in the US. So we have manufacturing operation in the US. We built that, started it up 2020. So we feel that we have a fairly flexible supply chain trying to manage whatever the tariffs are ultimately going to be. But I think that's the — you know, I often say the world falls down in two buckets: one you can impact and one you can't impact. And don't focus too much on the one you can't impact. And this one will have its own course.
