Ericsson head Hans O. Karlsson returns to Thailand

     But talking to him, as relaxed and has modest as he seems, it’s important not to forget that he has a lead role in the world’s largest mobile systems and telecommunications services provider. And he has held that role in many countries around the world, making him a leader in one of the world’s largest and most competitive industries.

     And Hans has come to Thailand with a very definite mission, “Above all other things, I want to see Ericsson in Thailand prosper,” he says resolutely and then continues, “I also hope to have, with my team here at Ericsson and my family, fun while I’m here.”

     He refers to his colleagues at Ericsson very much like they are part of his family. This is no doubt due to his long and faithful service to the company. Displaying a distinct resolve and deliberate character, Hans joined Ericsson just out of university, and has been with the company ever since, starting with them in 1985. Fourteen of those nineteen years with the company have been outside of Sweden, taking him to Asian, African and Latin American markets.

     Hans transferred his role from the Philippines to here between May and August of this year, taking over for Lars Bjorkenor, who was formerly president and country manager. Before his position in the Philippines, he was president and country manager of Ericsson in Oman. While he was in Oman, he also concurrently occupied the vice president for customer solutions and services position for all Ericsson market units in the Middle East. He was in Omar for a total of three years. Before Omar, he was based in Indonesia for over four years. Besides being based at Ericsson’s headquarters in Sweden, Hans also spent five years with the company in India and elsewhere.

     Coincidentally, it was during his stay in India that Thailand was experiencing a boom in the telecom industry and Hans was called on to assist in the rapidly growing market here. As a result, he made frequent trips to Thailand, and this is when he became acquainted with the operations here as well as the woman that would later become his wife.

Ericsson in Thailand

     Ericsson has a long and established history in Thailand’s telecommunications industry. The company delivered its first telecom equipment to Thailand in 1908, when it installed the country’s first telephone exchange. It is now the largest supplier in Thailand, with its role split among several major telecommunications businesses, including: mobile telephones (through Sony Ericsson), cellular networks, fixed networks and defense systems.

     And Thailand is one of the focal points for the company in the region. “Headquarters in Stockholm views this as an extremely important market for us. We have a long history in Thailand and are pushing very hard to adapt and grow in this constantly changing market. It is important because there is a lot of growth and growth potential here,” Hans explains.

     In Thailand, GSM-based systems are the bulk of the infrastructure operating in Thailand, including the networks operated by number one and number two AIS and DTAC. But Ericsson’s real advantage lies in the fact that it is the only supplier to offer all second and third-generation standards, including the next generation WCMDA, EDGE and CDMA2000, while holding a 40 percent market share in the GSM/WCDMA market. This gives it a strategic position in all markets, being able to move in all directions that the market does.

     When asked what skill sets he is bringing to Thailand, his response is characteristically modest, but he does give an outline of his experience that is relevant to his post here. Probably most importantly, his Asian experience is extensive, as mentioned above, including work in Thailand, the Philippines, Indonesia, India, Japan and Singapore.

     Another important factor is his experience with Ericsson’s global repositioning, which includes a shift towards telecommunications services to adjust to a rapidly changing market as well as its push to position itself to complement the strengths of the handset provider Sony Ericsson. “Ericsson is currently in a process of repositioning itself within Thailand, something that it has done in many markets around the world, and something that I’ve been a part of in several markets. I’m here to assist in that,” he adds.

     Part of this repositioning and adopting of new strategies doubtless involves the shift of focus from Thailand’s urban areas to the upcountry. Hans explains, “While the growth in Bangkok is saturated, there is a large potential in the upcountry. That is where we have less of a hold on the market, and where we will be focusing our energies. This makes markets like Thailand more important in many senses than more consistently developed markets like the US or Europe.”

     This is partly due to what Hans refers to as the “leap frog” effect, “In areas where the infrastructure is behind the curve, like many areas outside of Bangkok, there is a lot of potential to go from the current infrastructure setup and jump ahead, leap-frog, to the latest technology, without going through the normal evolution process that happened in developed areas. In fact, there is most likely going to be initiatives in Thailand to leap from the current infrastructure to the latest technology, for example the latest in CDMA technology, supplying high-capacity networks to customers outside of Bangkok.”

Ericsson’s around the globe

     Headquartered in Stockholm, Ericsson began operating in 1876 and now has operations in 140 countries. They provide systems to the world’s ten largest mobile operators. This means that roughly 40 percent of the world’s mobile calls are made through Ericsson equipment.

     The company offers a full range of telecommunications equipment, from handsets (through Sony Ericsson) to infrastructure equipment and chipsets for mobile phones. It is not only the leader in hardware, but is also the world’s largest telecom services company with over 15,000 service professionals worldwide. Ericsson currently employs over 50,000 people in 140 countries, over half of that number outside of Sweden. Sales for the company worldwide last year were around 670,000 million Thai baht.

     Although many have seen the merger with Sony to form Sony Ericsson as a sign of corporate troubles, the company’s mobile phone division is still a leader. Despite fierce competition in the handset market, Sony Ericsson was this year awarded Best Handset at the 3GSM world congress.

     And always innovating in the infrastructure business, the company continually puts out new technology that drives the market by creating new services for users. “Push to talk” services, which allow users to press a button to talk to another user like a walkie-talkie – a service which Ericsson says fills the gap between an SMS and a traditional voice call, is a prime example of this. This is one more way to utilize the current infrastructure to both make mobile phones more useful, but to also drive market growth and increase revenue for operators.

     Another area where Ericsson has recently come into the forefront is the mobile phone chipset business – the “brains” that make mobile phones work. “During our merger with Sony, we decided to keep our mobile phone chipset business separate. And it is actually where we’re now putting a lot of focus. We produce chipsets for most of the major brands, with around 60 percent of the top handsets on the market operating on our hardware.” This operation is based in Lund, Sweden.

     These are some of the areas that suppliers like Ericsson compete for market share in the aggressive telecom marketplace. But probably the most well known battleground is the push from generation to generation, or “G” to “G.” This process is the organic development of services to meet both consumer demand and to accommodate the competition of companies.

     When asked what is driving the adoption of new technologies Hans explains, “The adoption of new technologies in infrastructure, or moving from generation to generation, 2G to 2.5G and now 3G, for example, is quite simply about speed.”

     Bandwidth in the mobile phone market is analogous to the drive for more bandwidth on the internet. Bandwidth means more data at faster speeds, and while quite convenient in itself – getting the same information in front of you quicker – it is also important for driving the growth of the market. With more speed available for users, developers have more opportunity to develop content-rich applications, like downloadable video games, that are more useful for the consumer.

     Probably the prime example of this operating within a marketplace was the initial increase in bandwidth on the internet that allowed for the transition from text-based websites to graphical websites. This transition completely changed what the internet could be used for and spurred the development that made it was it is today. While a low bandwidth, text-based internet could do all of the things the current one does: email, searching for information, e-commerce, paying bills, sending short messages, etc, it would not be as user-friendly, and would never have developed as rapidly or grown to cover as many services.

     As the early architects of the internet infrastructure did, companies like Ericsson are laying the groundwork for what will become the next necessary part of many people’s lives – data-enabled, content-driven mobile networks. These networks are already present in most markets, at varying stages of development, but have yet to build up the momentum of services and users that the internet has.

     With the introduction of the SMS, mobile networks became data friendly. And while the SMS is still probably the single biggest data use of mobile networks, especially in the vibrant youth markets, other data applications have sprung up along the way. WAP (Wireless Application Protocol) has been around for years, allowing users access to a basic internet-like framework of information websites and services, including sites with graphics. While WAP is in essence the internet for mobile phones, it has been slow to become a fixture in people’s lives. This is no doubt due to the slow speeds at which it originally operated at, and the fact that content suppliers have to develop WAP sites separately from their normal websites.

     The other major factor that is slowing the adoption of mobile-based data sites is the fact that phones prove a problematic interface for web applications. Limited screen size, operating system speed, available memory and a limited keyboard mean interacting with the network is awkward, at best.

     On the speed side of things, major infrastructure suppliers are pushing for the adoption of more bandwidth, hence the progression from generation to generation. In terms of the user, however, there is no difference in user experience whether the system being used is GSM, GPRS, EDGE or one of the CDMA-based technologies. The only difference to the person using the mobile phone is how fast content reaches the phone.

     There is more difference for operators, however, because increased bandwidth in the mobile infrastructure can mean more data or more room for voice calls, depending on how the bandwidth is utilized. This is a secondary driver in the adoption of new technologies. Even though the data capabilities of new network systems may not be utilized by end users, the extra capacity can be used to handle more network subscribers for voice calls, in essence increasing the usability of any given network.

     This dual role of extra bandwidth is a driving force behind network evolutions. In fact, for example, GSM, GPRS and EDGE are simply upgrades of the existing GSM infrastructure. GPRS (General Packet Radio Service) changes the way the existing GSM network sends, receives and transfers data to and from mobile users. In a sense, it’s a “tune up” of the network that increases capacity (by 4 to 5 times). Although GPRS has increased the usefulness of services like WAP, it is also used to increase the capacity for voice calls over the same network.

     EDGE, another intermediate technology, often called 2.5G, is an advance on GPRS systems. The acronym is a good indicator of that, standing for Enhanced Data rates for GSM Evolution. It piggybacks GPRS-enabled GSM networks to again increase capacity, offering a 10 to 20-times increase over standard GSM networks.

     With EDGE, users are now able to utilize high-bandwidth services, including graphics-heavy and video applications. EDGE exists in Bangkok today, adopted by all major GSM operators, although services that utilize this capacity and people using them are still relatively limited.

     In contrast to that, true third-generation CDMA-based technologies, WCDMA (Wide-band Code Division Multiple Access) and CDMA 2000 1X are a technology fundamentally different from GSM-based technologies. What this means for operators is that the transition to CDMA technologies requires the licensing of new frequencies on which the networks transmit information, in contrast to GSM systems, which have been upgraded without the need for new licensing.

     The need for new frequency licenses slows down the adoption in some markets, as the licensing requires the cooperation of governments and other relevant industry bodies. “With the formation of the NTC (National Telecommunications Commission) in August (2004), the licensing for 3G systems in Thailand are now underway. We should see full 3G systems operating within next year,” Hans explains.

     But there is the lingering question of how much 3G will change people’s lives. In the development of the personal computer, its foothold depended on the development of “killer aps,” or killer applications. A killer ap was something that originally made the personal computer indispensable. Probably the most obvious killer ap for the personal computer is the word processor. The word processor forever changed publishing and desktop publishing by giving users what amounts to the ideal typewriter, allowing for effortless revisions, formatting and correction before a document is published. The spreadsheet is another milestone for the personal computer, giving similar flexibility to the use and manipulation of financial records, accounting and other data.

     In terms of the web, the internet’s most notable killer application is email, which forever changed the way in which humans communicate for personal and business matters. The web browser, and graphics-rich websites are what gave us what’s now known as the internet, similarly indispensable in many people’s everyday lives.

     What will be the killer ap for mobile phones? Hans suggests that it’s not a single application, but the idea of the mobile phone centralizing the internet, email, voice calls and all other forms of electronic communications. “Mobile phones will become the ‘digital Swiss army knife.’ They will combine the phone, digital camera, personal digital assistant, email and web browser.”

     And of course, this is what we see already, in various forms. But we have yet to see phones that truly do all of these things well at the same time. Some mobile phones have PDA operating systems and functionality, some have PDA touch screens that allow for a more accommodating user interface and many have cameras, but generally, phones that offer that much functionality are still large and awkward to carry around.

     But even if the functionality is there, content is still lagging behind in mobile applications. In Bangkok for instance, it is possible to get data over the network at EDGE speeds, but there is a glaring lack of content. At present, the bulk of multimedia data moving across networks are for fun and focused on the youth market, things like ring tones and logos used to decorate the screens of mobile phones.

Hans and the future

     Not sure how long he will be based in Thailand, he says that the posts are usually three to four or more years, given the time it takes to readjust to each new location. But he suggests that on the personal side of things, adjusting to life in Thailand has been a pleasant affair.

     His six-year-old son Vincent has lived in both Indonesia and the Philippines before coming to Thailand. When asked if his son has had any adjustment problems, he suggests little. “He seems to like it here, as he liked it where he lived last. His life is usually centered around school as that’s where his friends are. And he likes it here.” Hans laughs, “And he seems quite adept at finding girlfriends.” He is also fortunate enough to be raised polyglot. “He speaks Thai with his mother, Swedish with me and English at school.”

     And his wife Sirinuch is doubtless adapting well to their new posting. She was working with Ericsson in Thailand at the time Hans was traveling here from India during a telecom boom. And that’s how their romance began. They were married in 1992, and she then left Ericsson to join him in India and later back in Sweden.

     When asked what he likes about Thailand, “The people, of course. They’re really incredible, friendly wherever we go,” he continues, “and the food is extremely good and inexpensive.” These answers seem to come out of everyone that moves here from abroad, but are repeated for very good reasons.

     But, giving some more depth, he says he also admires something that he has noticed from his years of experience around the globe. “I’m really amazed by the Thai entrepreneurial spirit, which seems much stronger than in the other countries I’ve worked in.” He goes on to suggest that the Thai entrepreneurial spirit is something that can turn almost any situation into an avenue for prosperity.

     So it would seem that Hans is particularly well suited to Thailand, both personally and professionally, and it would seem, given his experience around the globe, that he should be able to achieve his goals of seeing Ericsson in Thailand prospers while having fun at the same time.

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