Telefonaktiebolaget LM Ericsson (publ) (ERICB) Earnings Call Transcript & Summary

Hello, everyone, and welcome to today's update. I'm terribly sorry about the delay. There were some basically technical problems here. Hopefully, it will be worked now, and then you will be able to hear me in the beginning, and then you will be able to hear our CFO, Carl Mellander; and then our Head of the Networks, Fredrik Jejdling. So the setup is that Carl will start with some discussions point together with Fredrik Jejdling. And at the end of today's discussion then, we will open up for a Q&A. [Operator Instructions] And please focus the questions around topics within the Network business. So -- and with that, I would like to hand over to you, Carl, please.

Thank you, Peter. And before we move on, given technical difficulties, please confirm that you hear me, Peter? Good. Okay. Fantastic. Great. Sorry again for this, but let's go from now on immediately into the content. And first of all, Fredrik, great to have you here to talk about Networks. And okay, let me see if this works now. It seems that we still have a sound problem. There must be something very strange going on in the networks today, not in the Networks business as such, but in -- okay. So today, Fredrik and I will discuss what is going on in the Networks in Ericsson, including such factors as the market growth in different geographies, but also how we handle the development within ORAN, virtualization. We will also discuss a little bit around, of course, the impact of COVID and what has changed, if anything, in the Networks strategy, how we are tailoring product portfolio and some of the new items that we are launching right now. And hopefully, we will get to a really good Q&A, as Peter was saying also, sooner rather than later. And I can tell you that we still do have some technical issues here. And so hopefully, we will get onstream very soon. Let me see if we have Fredrik with us.

Yes. Can you hear me, Carl?

I can. And exactly, I can. Fantastic. Very good. So Fredrik, great to have you here. And finally, it seems like stuff is working for us. But I wanted to dive in then, Fredrik, and to talk about the market and different geographies. And now we've all seen Dell'Oro's latest report. They're upgrading the growth for 2020, that's already a fact, but also the outlook for 2021. And we saw 10% globally now is the expectation, 12% North America, 9% Europe, for example. And what's your view here on this increased prediction? And how do you see this pan out in the different geographies, Fredrik?

No, thanks. And I do sincerely hope that you can hear me and apologies from my side as well. We are 23 minutes into it, but we'll do the very best out of it. No, look, I think 5G, we're about 22, 24 months into 5G, Carl. And I think as a technology, it is the fastest-growing generation of all technologies. I mean, that's typically the case. 4G was faster than 3G. When it comes to 5G, it's largely driven by the fact that it is happening across multiple continents at the same time. So you have a 4G started really in the U.S. with a select number of customers, and then it evolved. Here, we have both China and U.S. and other geographies happening at the same time. That is one factor for stepping up quite significantly. The other one is that there is a multitude of an ecosystem developing much quicker than it did for 4G. And ultimately, that combined with the handset availability drives the technology, so to speak, in the early phases. So I would say, in general, we see a quicker uptake of 5G for that reason. Now if we then look at the various -- and so -- but I think it's fair to say that it's a fairly early on into the technology of 5G and we see, of course, mobility broadband case coming into play as a start. That's typically what we're used to. And the consumer segment constitutes a major of the revenue and the traffic today. But it was designed for industries, 5G, and that is also happening now. We see the utilization opportunity happening and growing much faster than the mobile broadband case. And that's why we designed 5G to secure that opportunity. So I would say that on the back of that, we see then a general -- I would say, a general upwards adjustments of the various in terms of sort of forecast, to your point then, Carl. And we saw about 16% growth in 2020. And if you take away China from that for a second, it will be about 6%, 7% growth, and we grew about 10% in that market. And then you see 2021 growing about 10% expected. And I think it is for the 2 reasons that you need an alternative for 4G for consumers. And we also see a longer tail end than on 5G on the basis of now starting to see the results of building digitized infrastructure based on 5G and it become a critical infrastructure. Now maybe a couple of points on the markets. And North America is driving -- driven by an early high-band penetration compensating for or supporting the mobile broadband use case. We see a bigger uptick now on the back of the C Band or mid-band coming into the U.S. right now. And we see North America growing about 12%, and Europe is growing a little bit. And the good news in both is Europe's growth precisely expected 9%, I should say. But in both these markets, we are taking market share, which, of course, rewarding for us on the back of investments we do. China slowed down a little bit 2021, a massive build-out, I would say, during 2020, a little bit north of 10. And the other markets are India and Japan, Taiwan, they're coming through. And Korea, we built about a year back. So it is a technology that promises both the mobile broadband case, but the tail end of the technology is extended with the industry use case, I would say.

I mean that's great. It's -- I must say, it's, of course, very encouraging for us to see how 5G is really picking up speed in more and more geographies. Still, as you say, it seems like we are only in the beginning, actually, of the cycle. And of course, the enterprise side of 5G, we haven't really seen translate into so much business yet, but that's, of course, a big part of the entire case. Also, I think now we have 1.5 years of pandemic and the impact of that on the global economy and on our society. And of course, and we have seen how important connectivity is now during this period, more than ever before. So I wonder, Fredrik, when you look at the strategy for Networks then, has it changed coming out of the experience from this pandemic time in 2020 and so on? Any changes that you have seen in your priorities or strategy going forward?

No. I think in times like this, Carl, I mean the health and well-being of our employees that have, to a very large extent, been working from home, including Networks, and we've been -- we're trying to look at the positive experiences from that. Of course, we have manufacturing and hardware development personnel being on site. So we try to make their environment safe there. In terms of immediate factors, there is, of course, elements on the supply chain that we need to plan for. Lead times are longer. There have been lockdowns. And both in service delivery as well as in planning for supply and manufacturing, we had to -- on extended lead times where we are buffering up the inventories. And we're also working with dual designs not to sit in one geography with critical components. We work very, very heavily on that. So that becomes more of a short term. But I would say, Carl that, if you look at it, connectivity becomes an even more component of our daily life. And of course, COVID and the recovery beyond COVID will largely be supported by investing in infrastructure, in the critical infrastructure that 5G constitutes. Now from a strategic priorities' perspective, if you look at it because, of course, we are here for the medium-, long-term planning. And I would say that short term, we have the same priorities as we discussed actually back -- some of you might have been on Capital Market Days back in 2017 when we talked about investing in technology for facilitating a performance and cost leadership for our customers. We work on spectral efficiency, cost-efficient solutions driven by ASIC integrated circuit investments that we do. So that we will continue working on. We will continue to selectively expand market based upon that competitiveness with our customers. And with better technology, we would also get a better cost structure ourselves, and that allows us then to take this market. Now then, of course, our paradigm is to make sure that -- we made sure that 5G could be run on 4G equipment very early on. And that paradigm continues. So when we look at use case expansions that 5G offers, we want to do that with the most cost-effective way for our customers. So those 3 priorities, we stated them a little bit of variation in 2016, '17, and we're still continuing there. Longer term, though, if I can just say 2, 3 things, Carl, is that for us to be successful long term as Ericsson, as an industry, we need to make sure that 5G becomes the enterprise connectivity platform. That's something we're working very hard on, as you know, and we talked about that Capital Market Day last year on making that digitizing enterprise. To do that, we need to densify and make sure that 5G becomes the critical infrastructure on the back of COVID, but also for providing the 5G user experience that mid-band also offers. And thirdly, it has to do with in a world where architectures are driven in possibly a bit different ways, we need to make sure the standardization, evolution of networks are harmonized over time. So that's the third aspect we're working very hard. That will maybe impact medium, long term for us.

Right. So in essence, this -- the experience from this year has deepened basically the strategy that was set out. And it's proven even more relevant, I guess, for our customers and for us. And of course, the very big part of the turnaround of Ericsson has come out of Networks, not only, maybe I should say, but of course, it's a major part. And it really comes out of the -- all the investments we have done in technology, to regain world leadership, technology leadership and so on. And if we talk a little bit, given what you said on strategy now, a bit more on the product side then, what is it that we win business on, would you say? Can you elaborate a little bit on the products and benefits they bring to customers?

Yes. No. Ultimately, that's what we're for. And that's what we do in the market. And I think a basic foundation, as I said, have been our investment for technology leadership. And I must say technology leadership could be slight self-serving and, in the eyes of the beholder. And ultimately, it's really only when our customers rank us technically commercially #1, that's when I can -- that's when me and my team discuss some level of technology leadership because then we've done something good. Otherwise, you could be a bit self-admiring kind of a thing, but we focus on that. And to that point, then, we have seen that we've been awarded then by 86 out of about 162 live networks in 5G. So we believe that if you look at what we've done and the growth we are currently at around 15% in Q1, clear for any currency, et cetera, it means that we have achieved a position of -- a leading position on 5G. Now, why is that then? Well, a couple of areas where we have focused and that we will take forward, by the way. And that is our choice of architecture and linked to that then our development we now call Ericsson Silicon System on a Chip or whatever sort of mainly you want to apply for it. And that allows us to build very efficient mid-band radio portfolio and baseband portfolio, allowing certain functions to be up in the radio head. And that means that we get an uplink performance that is up to 10 dB higher than competitors. And by putting that in play, you dimension a network to sell edge performance and the uplink performance related or translates into lesser sites and better performance on the edge. So that, together with further integration means that we also now launched a 6419 product, as we call it, and it weighs in at 19 kilos, and it has the power requirements of our customers and bandwidth requirements. So I think that is based on architecture, it shows, and proactive investments in ASIC capabilities. We acquired Kathrein a couple of years back, and that was the ambition to look at the site and make sure that we can integrate passive active antennas and reduce the site pressures to drive down costs for our customers and build better equipment for that. And then we're working a lot on our industry, let's say, the digitalization of our industries and the extension of service delivery to that, which becomes further completely automated and digitized flows, and that drives the business leadership with our customers. So this is how we take forward. We've invested about SEK 10 billion in R&D if you look at run rate 2020 over 2016. And for that, we doubled our operating margin for about SEK 15 billion to SEK 30 billion. So it has had a positive impact on our P&L as well.

Definitely. One item here that you didn't talk so much about. But what I think or where I know customers are very eager and also the financial community, and that's around energy efficiency. Of course, and it has to do with the entire sustainability agenda of the world and know us as a company and our customers. And I know you're -- we have -- we're investing significant money there as well to break the energy curve and so on. And what's your reflection there? What do we bring to the market? And how do the customers receive?

Yes. No, thanks, Carl. Thanks for putting that on the table. I think that our ability to drive and/or design energy-efficient product is very much a design criteria, primary design criteria for us. And when you build integrated solutions like we do with System on a Chip, it allows you to optimize the performance of any type of product, it being a radio baseband for energy performance. And that means that it's, of course, environmentally sustainability important, but it also offers an attractive TCO profile for our customers, of course. So if you compare them, and we measure this in different ways and forms, both in a way of relative to competitors. I mean in the sequence of how we introduce products on the market and we see that we will achieve around 30%, 35% efficiency within ERS over radio system-related portfolio over the previous generation. And then the target that we want to be 10x more energy efficient per transferred 5G over 4G, so generation over generation then. And we have -- we should be northbound of that now. So -- and if we intake the 6419 product I was talking about, then we achieve about 20% energy efficiency. And internally, over the previous generation, that's our fourth generation of Massive MIMO product as such. And that's why we have such a high cadence to get down into a attractive customer cost and performance proposition. But I would also say, Carl, that, I mean, this is, in a way, our -- what I described before now and then when we talk about the energy efficiency part, that's history. There are shaping trends that we, of course, look at when we try to define a portfolio is attractive for the future as well. And for us, it's very much around geo supply chain. We talked about COVID being resilient in a world with longer lead times. That applies also for reasons like geopolitics, where we need to make sure that we can deal with any type of supply flow depending on any sort of bifurcation of the world in the sense that we need to be resilient to supply in any type of market. So that's on top of COVID and we have with the latest development around the surge in demand for semiconductors. We're also working very hard on making sure that we have enough inventory and buffers to deal with the various tougher demand situations. I think that's important. The second part, which is important for us to work with this, what I spoke about before, new growth vectors, make sure 5G becomes the critical infrastructure. And the third one, I would say, will be open as a cloud, where we launched a Cloud RAN platform end of last year. And we hear a lot more about that in the next period of time, I would say, and that's important for us. It's a very promising technology for us for different use cases. So these are just some of the things that we need to -- for us to stay relevant, we cannot only look backwards. We need to look into and adjust and be ahead of the curve when it comes to other external impacting factors as well.

Thanks. That's great, Fredrik. And now you touched on a couple of things that are among the frequently asked questions, I would say, that I also get, including semiconductor, a global shortage, you addressed that. Also the ORAN, maybe just -- and we should round off very soon to allow for questions. But maybe just one, when it comes to Open RAN virtualization and so on, sometimes there's a little bit of confusion perhaps around these different concepts. Can you quickly guide us a little bit, sort out the differences and how we are actually addressing the different areas?

Yes. Yes. No, it's a good question, Carl. And sometimes it's also even -- it is slightly confusing in the market, and the terms are used interchangeably. I mean, Open RAN, and it's more of a -- it's not a standard, but it's industrial term, including various aspects, including cloudification, automation and northbound in terms of orchestration to manage. But it also includes, call it, an Open RAN internal interfaces. So it's a lot of flavors to Open RAN. And the ambition for it is to allow separation and disaggregation of hardware and software with open interoperable interfaces. What the market is looking for then is supply chain diversity, solution flexibility and other capabilities, et cetera. Now we've been very active in developing and participating in what we call the virtualization through Cloud RAN. And as I said before, we see that as a very promising technology. And that, by the way, disaggregates hardware and software. And it allows also for an orchestration, standardized open orchestration management interfaces, call it a northbound, that we're very much participating on. And we believe as technology deployed in various assets, across various services, various open private clouds, public clouds, et cetera, it is a technology that offers a lot of evolution. So I would say we've been part of the principle of openness and increasingly open architectures. And again, Cloud RAN is an evidence of that. But as a leader over the past 145 years, we work with our customer, continue to innovate and respond to what they want, which is typically our high-performing and energy-efficient secure networks and in some cases, integrate the solutions or what's here and now that can offer that. There are other technologies where [ toolset ] really becomes something with the urgency of 5G to be rolled out, that needs to be done on existing technology, which will ultimately form then a critical part of national infrastructure, as I said before.

Exactly. And so that's good to know. We are at the table. We are pushing development there as well and invest our own resources, of course, also in emerging technologies. While at the same time, we have more than 80 live networks, now powered by Ericsson equipment, generating revenue for operators today. So we shouldn't forget that as well. But that's great. I think given the fact that we started so late, I think now we open up for questions and answers. And Peter, please take it from here. Thank you so far, Fredrik. Let's hear if there are questions. We heard you for a second, then you went on mute, I think, Peter. Now you're on mute.

We can't hear you, Peter. I hear Carl.

Can you hear me now?

Yes. Now we hear you. When it rains, it pours, as they say.

And I guess this was more a simple issue with the mute button.

I can't hear, Peter.

Okay. That's strange because I'm not muted. Let's see if I can -- you can hear the audience. So let's start with the Q&A here. And I think I have the first question here from Frank Maaø from DNB. Frank, can you hear me?

Yes, I can.

Good, Frank. And see now if it works, let's -- so Frank, please, you are on the line. So you can ask a question.

Okay. Well, Ericsson recently disclosed an additional risk factor to -- or related to the bond program relating to China. I'm not expecting you to comment on that. But could you please remind us of what you have -- what your comments have been in the past when it comes to the profitability profile of your sales in China what -- so that investors can gauge a potential risk of potentially losing market share, partially or entirely in the country? I mean that's my first question. So if you could comment on that, whether it's marginally positive but gradually increasing or whether or not it's closer to group levels at some stage here in a couple of years, that would be excellent. And then I'm referring to gross margins, actually. And secondly, on ORAN, if you could comment on whether or not you see these reference designs for radios that have come out of Qualcomm, Marvell and [ Exynos ] over the past half year as something that's kind of shifting or accelerating the Open RAN or ORAN space going forward with potentially more kind of disruptive radio alternatives coming in and with reasonably good specs that can be deployed.

Shall I start, Carl? Or do you want to go?

Yes. Yes, exactly. Thanks, Frank. I think if you take the ORAN piece, I can -- if you like, I can also answer the China question. Please go ahead, Fredrik.

No, I can start there with ORAN. And you're right, there is a multitude of reference designs coming out on the market. We should have seen that there is a time-to-market aspect of this and the readiness of these type of solutions. And if you look at the LoRa, they look at around 15% by 2025 of total volumes being ORAN. So there is an aspect of time here, and that goes back to the point that we have a 5G technology that constitutes critical infrastructure that we believe needs to be built out right at this point in time. So that's on the ORAN part. And as I said also that when we look at ORAN, there are elements here that we are engaging with our customers on and that is the Cloud RAN part of it, where we look at disaggregation of hardware and software being an important part. I think also over time, there is an aspect here of making sure that standards in interfaces are harmonized over time, to my previous point, that's important that we keep this industry together for global competitiveness. And we all know what constitute the basis of 8 billion connected devices. That has to do with 1 standard, 1 technology that everybody can scale and participate in. And by the way, 3GPP offers that today. So that's on that point. Then China, of course, Carl, shall I hand it over to you, and you can take that?

No, yes, I can do it. And I -- thanks for the question, Frank. We -- when it comes to specific profitability per region and so on, and you know that we don't really go into much detail. But what we have said, just to remind everyone, is that in the beginning of the 5G era in China for us, we had challenging margins and even losses. We communicated that. Of course, we had a business case to turn that around, and that we also delivered on. So the contracts that we are delivering on are generating profitability and are on track on our own internal business case. So that's all good from that point of view. In China, I mean, from a top line point of view, as you know, then probably, it's about 8% of our total group turnover. So let's see. And I mean, we communicated this risk. We wanted to say that the risk has increased given signals we pick up in the market, including what's stated in Chinese media and so on. That is not to say that something concrete has happened or that we have additional information. We will see how the upcoming tenders actually develop over time.

Great, Carl. Thanks, Frank. We will move to the next question. And I think that one is from Aleksander Peterc at Societe Generale. Aleksander, can you hear me?

Yes, I can hear you very well. Can you hear me?

Great. Yes. So go ahead, Aleksander.

Excellent. Excellent. Can we just come back a little bit on the Samsung settlement, if you could tell us what is the current IPR run rate beyond the second quarter with the patch-up? So what is the run rate that we should model going forward? And how much is still there to be resolved in terms of ongoing IPR renegotiations or disputes? Can we model at any point in the future, a return to that SEK 2.5 billion per quarter in IPR or not?

Thanks, Aleksander. Yes. I take that as well, and Fredrik, and let's see if there are additional questions on networks now that we have Fredrik here. But on the IPR, yes, the run rate, if we look at the contracts now then it's -- you get -- if you use the numbers provided, you get to around SEK 6.6 billion. Then we have a couple of renewals ahead of us, as you know, under negotiation, and they will then help close the gap back towards the SEK 10 billion level again. And there's also a currency aspect, though, and that's, let's say, with the currency change of around 10%, that represents about SEK 1 billion of that of the SEK 10 billion actually downwards. And the final point to mention there is this one particular variable contract we have on IPR, where volumes for that device manufacturer have gone down, and that impacts our revenue. But long-term, of course, our ambition is to get back to the SEK 10 billion level and monetize our patent portfolio as good as we can. And so I think that what we can say, the Samsung agreement creates a good platform for the upcoming renegotiations on renewals as well.

Can I have a quick follow-up? Can I have a quick follow-up on Networks as well, please?

Yes.

Yes, yes. So did you see any impact from what's going on in India on your development in second quarter? And my understanding was maybe that was one of the regions that was going to underpin growth quite a lot with a lot of rollouts in the current quarter. So did you see any impact there? Or is it business as usual for you guys?

We do see an impact given the rather sort of tragic situation we are in India at this stage. So the pandemic situation lockdown is impacting rollout services and it slows down some of the ongoing projects. But it doesn't impact the overall strong belief in the future development of the Indian market. But in the tragic set of events evolving there, although slightly better now in the last few days, it has impacted our rollout. And so yes, there has been an impact.

We will move to Peter Kurt Nielsen at ABG. Peter Kurt, can you hear me?

I can, Peter. Just 2 quick questions, please. As you mentioned, initially, market focus for market growth has been raised quite significant, including a quite significant lift for North America, which is, of course, interesting. Can I ask, did you have any indications for seasonality here as to when this large incremental sort of growth is -- will come on? Looking particularly towards the end of the year, anything you can guide here because it is quite a significant uplift? And then may I just ask, it sounds like Brazil is getting ready now for 5G spectrum auctions. How do you feel you're positioned to gain a part of those contracts in Brazil?

It's hard to judge exact seasonality on -- within the year, to be honest. It depends on the C band auctions have been completed. And of course, there is preparation for rollout now with all the major operators in the U.S. And what we see as an external growth, as we said, is about 12% through the LoRa. And it is on the basis of all the 3 preparing a mid-band rollout for better performance. So that is very much there on the basis of mid-band spectrum being available. And so that's North American market. How that will fall between quarters? That is, again, a little bit different. It's -- U.S. is -- as all 3 operators teaming up, of course, we need to make sure that our service delivery capabilities and the whole flow out to the market available. But we guide overall that we, of course, want to beat the market. And we have a -- the market in itself indicate about a 12% growth. That's probably -- between quarters, it's hard to say, to be honest. It's -- we look at it a bit more sequentially and long term to build the business there. Brazil, also very important. I look quite positive on our abilities to gain significant market share in Brazil. Now that is, of course, to be concluded. And -- but we have very good and strong relationships in Brazil, and they've worked very close to our operators and customers there. So hopefully, we'll see the fruit side of this throughout the year here.

Thank you, Fredrik. Thank you, Peter Kurt. Then we'll actually move to the last question of this session as we have to conclude this at 3:00 sharp. So that one is from Francois Bouvignies at UBS. Francois, can you hear me?

Yes. Can you hear me?

Yes, we hear you perfect.

My first quick question is on Fredrik, your remark around the 5G in the -- you said that it's early stage of 5G. Now I think we can agree that 5G has been stronger than expected in the -- maybe in '21, and the interest has been very high. Why you still think it's early stage in 5G or any data point you can give to prove this? Because we could think that 5G maybe is more fit to rural instead of the urban at least, and maybe you can see a first phase. So my question basically is how you see the phasing of investment of 5G going forward after a first phase that is quite strong. And the second question, Open RAN. And like you said, it's very confusing you hear a lot of things, and Rakuten is talking about 30% to 40% cost saving in terms of network. What's your view on the benefit on the cost side for your customer to adopt Open RAN? Beyond the readiness, what do you think the architecture can save to your customers?

Sure. So if we look at why I mentioned 5G being early on, that's more linked to the fact that it actually was accelerated to start with. If we really look at non-stand-alone, it was accelerated. So we actually launched 5G probably about a year earlier than we expected for the reason of bridging the mobile broadband case and facilitate offload for 4G for that. So in a way that is why we launched with non-stand-alone 5G early on. Then, as I said before, also, we designed 5G to connect to people with things and things with things. And those sort of type of use cases, we believe, will extend the cycle of 5G investments in the market and as a matter of fact, the reason for becoming the critical infrastructure available with enterprise and mobility use cases. So the technologies for providing that are linked to stand-alone. They are linked to the 5G core that then can facilitate end-to-end network slicing, for example. And also the type of technologies we're deploying right now and see -- by the way, very good results always. We trial those in various type of industrial use cases. So in a way, what we've been, 22, 24 months into 5G, it's largely been driven by fixed wireless by mobile broadband and partly delivery fixed wireless access. And now we're stepping into the use cases in a very positive way for which 5G was designed. So that's why I say that it's been still in the early phases what we actually ultimately design 5G to take care of with the networks. So I hope that answers the first question. On 5G versus ORAN, and again, we -- there is no doubt that if we build any integrated purpose build System on a Chip that you're going to get the better performance and get the better cost profile in the network. Now what we are looking about, if we look, for example, at the introduction of Cloud RAN, that offers other opportunities. While there might not be sufficient on certain parameters on power consumption, for example, it offers the introduction of reutilizing a lot of hardware in the network. So we believe that there are barriers, and that's why we sort of forward lean on Cloud RAN, that there are applications in the network call it then more hybrid oriented, where these type of technologies like Cloud RAN and integrated solution will live side by side. And it's also dimension against what kind of use case you will actually deliver. There are complexities in the macro networks that require certain type of processing but thereby certain system on chips. Well, for example, in industry application, it may make a lot more sense to reutilize for cost-efficient existing product and installed base of servers or public cloud or whatever kind of edge solution the enterprise may have. So it depends. And the only thing we can say is that we work with all these type of technologies to make sure that our customers get over time the best performing, most cost-efficient network. So it's likely to take care of a couple of these type of technologies over time. And that's -- again, we drive certain aspects of Open RAN, where we believe we will have a technology difference for our customers. And we discuss architectures in very detail with our customers. And a lot of -- just final part here, a lot of the automation and orchestration and management function, they actively support, which will give those type of performance advantages that typically the ORAN community will talk about. And those are, technically speaking, a one-on-one interfaces going up into an open standard to manage and operate up our network. So again, as you said, it's a complex grade of components of this. We decide for what we believe will get the best performance and architecture for our customers, and that's what we focus on. It includes Cloud RAN. It will include the integrated solutions as well. And over time, we will work with those 2 components. I'll commit to meet our customers' requirements. That's the most important thing for us.

Thank you, Francois. We are on the hour, and I would like to thank Carl for moderating this session and Fredrik for answer all the questions, both from Carl as well as during the Q&A. And again, I'm terribly sorry for the technology. Sometimes, the technology is not on your side. But hopefully, next time, we will be a bit on the lucky side of this. So please, thank you very much for listening today, and have a great day.

Thank you.

Thank you, guys. Thank you all.