The President for Europe and Latin America of Ericsson, Jenny Lindqvist, speaks to EL MUNDO during the Mobile World Congress with a clear message: "Europe needs to take action now." This message resonated numerous times last week at the event, but few people have Lindqvist's perspective.
Ericsson is one of the largest investors in innovation in Europe (one of its major centers is in Malaga) and also has telecommunications operators as its main clients, perhaps the sector with the poorest health and most in need of a strategic shift in the continent. While business is booming in the United States, Lindqvist sees the gap widening between China, India, the country led by Donald Trump, and Europe, hence it is not enough to have just a community response, but an urgent response is necessary.
The main theme of the Mobile World Congress has been the need for a European technological resurgence. Ericsson has been advocating for it for years. Do you think there will finally be a change?
There is a certain consensus on what needs to be done. The right things have been said to us, but we need to act very quickly because we are falling behind, and the gap is widening.
It seems that there is a difference between ideas and putting them into action.
It's a dialogue. This January, we had an event in Brussels with ASML, SAP, Nokia, the technological producers of Europe. We came together because we believe we have very strong assets in Europe, but the problem is that our clients in Europe are not investing.
In your latest results, North America was the region with the highest growth in the company. Is Ericsson's growth in Europe challenging without strong operators? Exactly.In that sense, is the development of 5G in the continent happening fast enough?
No, and perhaps it is our biggest concern. We look at 5G and investment in the technological sector in general, and Europe is falling behind the United States. We have an investment gap in infrastructure, but also in innovation and double-digit development for years, but now it reaches up to 70% in the technological sector. And if we look at real 5G - the one that is not mixed with 4G as is still happening in parts of Spain - we look at the leading nations like the United States, India, and China, and once again, they all have 90% coverage. Europe on average is at 45%, and one of the reasons is that we do not have the right framework for clients.
Do European operators have trouble justifying their investments?
Looking at all operators in Europe, 60% do not have a return on the capital they invest.
It also seems that operators struggle to convince customers to pay more for having 5G.
For me, a challenge is that since we do not have real 5G in Europe, we do not see new services. Currently, we buy broadband connectivity on our mobile, but the opportunity that 5G gives to consumers is to buy other innovative new services that do not exist today. The problem is that these cases will not be created in Europe if there is no investment.
You have changed your strategy to offer these use cases and create new lines like industrial services. What is the reason?
For us, it is a key issue. We are focused, of course, on creating high-performance connectivity networks, what we call programmable networks that allow using part of the network to create consumer services. We also see a new major market in the world of APIs. We use networks to create these applications on them and improve, for example, fraud detection in a bank. This year is an important topic for us.
You are leading with operators Aduna, a joint venture to exploit this market.
Yes, in fact, last year in Barcelona, we launched the first of these applications in Spain. What we did half a year ago was to present Aduna, an initiative with many operators globally. The benefit is that all developers who create an API can connect it with all operators in the country. It is a project on scale, which I believe is a common theme for Europe and something we do not have right now.
Are developers attracted to this project?
It is still early, but I would say that Europe has a good chance of staying ahead in this technology. We need, of course, to invest in 5G, but there are many European actors, and I think we will see how it takes off quickly.
Are you concerned about the growing tension between Europe and the United States and a possible impact of Donald Trump's measures on your products?
Many things are happening in the geopolitical scene. The United States is a very important market for us both because of its size and because it is ahead of Europe. My major concern as the president of Europe and Latin America is that the technology has its eyes there, and there is this investment gap. Europe has to close it and put technology at the center to support the industries that are already here. But, of course, we are monitoring what happens in terms of risk and supply chains.
But your focus remains on Europe.
The key is to call Europe to action. We are a European company, most of our development is here. We also have a part in Spain, which is a very important market for us. We need Europe to also help us by prioritizing the technological sector, and I am not necessarily talking about government aid. We have to make sure that the market rules are correct. For example, in the possibilities for consolidation within a market to have fewer operators but healthier ones to invest. There are also very high regulatory barriers. We have had the Draghi report, the Letta report. We have the right direction from the Commission and the Member States, but it needs to be executed quickly...
There is a lot of talk about aid, but there is also this feeling that European governments are not buying European technology.
In terms of public funds, we believe that Spain is a very good example of how to organize them. We had a merger in Spain and a new major player was built to have scale, but the recovery funds have also been used to ensure there is 5G coverage in rural areas. I do not think public funding is completely necessary, but Spain is a good example.
Spotify, Ericsson, Klarna... Sweden seems like an exception in the EU. What have they discovered that the rest do not know?
Sweden is ahead of some parts of Europe in certain aspects, but still behind the leaders. Sweden started very early with 4G, and applications like Spotify or the cloud were created in those countries. This is one of the reasons why we are concerned about 5G. It is important not only for the old European industries but to create new sectors that we have not seen yet. And those companies are not being created in Europe. They are being created in places with real 5G like the United States, India, and China. That is why we need an industrial strategy in Europe. The race is now, innovation is happening now, and if we do not act fast enough to create value, it will be created elsewhere.
Trump is criticizing diversity and inclusion policies. What is Ericsson's viewpoint on this issue?
I do not know the specific details of what is happening in the United States, but I can tell you about the work we are doing in Europe and Latin America. For us, it is crucial, and we have many initiatives, from teaching children how great the technology sector is, whether you are a woman or a man, to ensuring that we attract more diversity. It has been proven to have a positive impact.