Ericsson is boosting 5G investments in the United States, with plans to open a new R&D center and produce 5G radios in the country later this year.
The strategic moves will enable Ericsson to operate closer to customers and meet operator’s growing appetite for 5G products, the Swedish telecom equipment giant said Friday.
“The United States is our largest market, accounting for a quarter of Ericsson’s business over the last seven years,” said Ericsson president and CEO Börje Ekholm in a statement. “To serve the demand of these fast-moving service providers, we are strengthening our investment in the US to be even closer to our customers and meet their accelerated 5G deployment plans.”
As part of its R&D push, Ericsson expects to bring about 380 jobs to the U.S. The vendor’s 5G design center in Austin, which opened in 2017 and focuses on core microelectronics of 5G radio base stations, will employ 80 people. A new software development center, opening this year, will employ more than 200 software engineers, according to Ericsson. Starting next year, both facilities will contribute 5G products and software features into the vendor’s portfolio. Another 100 engineers will be hired by the end of the year as part of Ericsson’s push to increase investment in AI technologies to accelerate automation.
During the fourth quarter of 2018, Ericsson will start manufacturing next-generation radios in the U.S. – at first with a third-party partner. Ekholm told Bloomberg that St. Petersburg, Fla.-based manufacturing services company Jabil Inc. is the production partner, and during this time Ericsson will decide whether to build its own production facility in the U.S.
Ericsson’s announcement comes as U.S. carriers ready for 5G network buildouts. Verizon intends to initially deploy 5G fixed wireless residential broadband service in four cities during the second half of 2018, followed by mobile services in 2019. T-Mobile plans to bring 5G to 20 cities this year, while AT&T said it will be the first to roll out mobile 5G services in the U.S., starting with 12 markets by the end of the year.
The initiative also comes as Ericsson builds on recent momentum, after struggling as the market for 4G equipment matured and operators weren’t ready to invest in next-generation gear. In July, Ericsson reported its first quarterly profit since 2016. The company had previously slashed thousands of jobs and overhauled its management team during a prolonged downturn in the segment.
“It’s been tons of hard work in the company, but it is rewarding to see that hard work now paying off,” Ekholm said on the company’s earnings call.
In the U.S. Ericsson faces competition from rival Nokia, as China’s Huawei has been blocked out of the market due to security concerns. Late last month the Finnish wireless infrastructure supplier inked a $3.5 billion 5G equipment deal with T-Mobile – its largest 5G partnership worldwide.
