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

Good morning, good afternoon, and good evening to everyone. I'm happy to introduce this session over the new Ericsson Mobile Report. My name is Patrik Cerwall, heading up Strategic Marketing in Ericsson, also being responsible for the mobile report the last 12 years now. And together with me today, I have Richard Möller, who is the Chief Analyst here at Ericsson, and I will introduce him as we go along and talk about a lot of the numbers that we have this time around. Later, we will also hear from Hai Thoo, Vice President, Mobile & Voice Engineering from Singtel. We were honored to have him joining us for a part where we have collaborated on an article together with Singtel. We'll come back to that. Let's continue and just to dig deep into the Mobility Report and the big numbers and the changes that we have done this time. As always, we start with the overall picture on mobile subscriptions in the world. And you might have you been around and seen this presentation before. You recognize this slide, which is basically an update on how the technology is progressing when it comes to subscriptions in the world. So right now, we are around 8.3 billion subscriptions in the world. We have just passed 1 billion 5G subscriptions in the end of last year. We're expecting that to go up to 1.5 billion in the end of this year. Basically, meaning then that we have 500 million new 5G subscriptions in the world happening this year or adding on this year. At the same time, 4G is continuing to grow, and we are projecting it to peak this year at 5.2 billion. So a dominant technology right now. But by 2028, it will be 5G. That would be the dominant technology. So it's a slow transition towards 5G as the dominant technology. But in many markets, 5G will soon be the technology of choice. End of 2028, we're talking about 4.6 billion 5G subscriptions, and this is a change from what we said just half a year ago. So now I introduce you, Richard Möller. And please give your perspective on the changes that we have done, how does the market look like and how we changed the forecast on 5G particularly.

Thank you, Patrik. We have made an adjustment on the 5G forecast, basically 3 regions that affect the forecast. Firstly, we've changed our view on 5G subscriptions in China, adopting closely the regulator's view, which changed the subscriptions by some 80 million in 2022, and that change carries through the forecast period. We've also somewhat delayed the forecasted growth in Latin America due to the general economic conditions more than anything else, and we've also slightly decreased the growth that we forecast in Southeast Asia. All in all, not a very large adjustment. We're still talking about huge growth.

Yes, exactly. And this growth is maybe easier to also look at when we see the growth per region. We have seen all markets going towards 5G. Of course, it varies a lot between different markets right now. In terms of uptake, we see both in Northeast Asia and in North America. I think we've seen stronger growth in North America than we expected before. Can you comment a little bit on North America and what we're seeing there?

Yes. As you said, the growth has been even stronger than we anticipated last year. And that's mainly down to the very strong competition in that market where 5G is a central part of being a competitive landscape, so to say, and that really drives the subscriptions uptake.

But one of the big news or messages in the release this time is India. And we have to talk about India because they launched 5G services in October last year. And already now, there's a lot of uptake on value subscriptions. By 2028, we expect 57% of all subscriptions in India being 5G. It's the fastest-growing region right now when it comes to 5G subscriptions uptake. What is this? It's a phenomenal uptake that we are expecting here.

It is. And of course, that's a challenge to forecast as such. But we've seen what India did with the launch of 4G. Again, fierce competition really driving the market and building the uptake and lots of work on creating entry-level phones. That's relatively speaking, entry level, that contains new technology. So we think this is going to be a huge growth.

And Europe is -- if you look at Western Europe here, it's a little bit behind when it comes to uptake on subscriptions. What are we seeing in Europe right now?

Well, we are seeing Europe kind of lagging behind in terms of subscription uptake, and that's related not only to economic conditions, but also that the regulators in some cases have been a little -- had a little later timetable for frequency auctions, delaying the rollout of 5G. So Europe is lagging behind a bit here. But we think that over the forecast period, it will catch up, so to say. But again, Europe is behind right now.

And then we have a number of regions that are in the early days of 5G and that we'll start to see more of that coming up when it comes to Latin America or Africa and also Southeast Asia, as you know. Of course, it varies a lot between market to market, and so just because the region looks smaller or that hasn't developed. There are countries that are very advanced, of course. But if we continue and talk more about the economic situation. Because when I was down in Mobile Congress in the early of this year, the biggest question I got was, where is the money? Is anyone making money of 5G? And what we did was updated this study that we did together with -- basically analyzing a lot of data from operator service revenue. What you can see here is our take on it. When you look at the top 20 5G markets, the ones that have the highest enough -- high subscription penetration. So if you take all these markets and look at the subscription penetration in these markets, it's the orange line that goes up now to over 20%. So average 20% 5G subscription inflation in these markets. The blue line here represents the wireless service revenue, the -- complying basically of all the operators, average in -- among all the operators in these markets, and you would see the names of the markets in the bottom. So we have weighted them equally. So even big countries and smaller countries, all are weighted equally here. And what we've seen is once subscription level came up to around 7%, 8% in these markets, then we have seen upwards trend also on service revenue, which correlates very well with the 5G subscriptions uptake as well. So the last 2 years, we've seen 7% in total, so 3.5% per year basically. We don't know whether it will continue or not. But it is interesting, of course, to see what is driving this. And the growth in revenue coming back to the industry, of course. And I do get questions sometimes whether this is inflation-driven or not. I would argue that it's probably not. We saw a lot of inflation in different segments during 2022, which was in food or energy prices, but I [ wouldn't ] argue that communication prices hasn't gone up. There are some focus on places where operators have managed to increase price. But usually, that is not really the driving force here. But it's rather than that operators are managing to use 5G as that compelling event of upgrading consumers' bucket sizes offering new services and so on. And talking about new services, we have also included a study where we have gone again back to 310 operators' webpages, looked at all the different offerings that are available and tried to look at the evolution of these offerings and what is actually happening when it comes to service strategy. Buckets continue to, of course, be the dominant pricing model. It is used by almost everyone in some way in form. But on top of that, many are also having an unlimited offering. That has -- so basically 1/3 of all the operators we looked at had an unlimited offering. Then we've seen service-based offering increasing to a high level that a couple of times we looked. And that is more of selling than streaming services, could be it music, it could be video as a special offer where you sell it by the hour or you sell it as a video pass or something like that. I won't go through all of these. But as you see, there is an increase also in device-based IoT, smart purchase, fixed transactions are going up. We will come back to that. But I want to add one thing, and that is a trend that we've seen when looking at these offerings. It's content aggregation, operators that are able to become almost like a hub where consumers can not just buy a mobile phone and a subscription, but also then basically click in what type of streaming services they want. And that is more and more operates our offering in becoming this hub, which I think is a very good step of actually being relevant to the consumer in the market. And actually, I'll be able to talk for that type of content hub or content aggregator role, which when new services come on top of 5G would probably be a very good place to be. We also see a number of operators that are charging a premium or charging difference in the prices on 5G just because of 5G is actually going down. Now we see around 22% doing that. Most operator now, more trying to get operators to enjoy the better value that 5G gives and with higher bucket sizes, they manage to get consumers to actually go for a bigger package or a bigger offering and thereby increasing the revenue. But if we continue and look more into the fixed wireless access, we have seen -- and this is a regional picture. We have seen it's quite varying how the adoption is, but we have more than 100 service providers offering fixed wireless access over 5G, and over 80% of fixed wireless access in the regions North America, Western Europe and Central Eastern Europe and Middle East and Africa. So quite a diverse set of regions, but many are going for fixed wireless access. The way operators are offering fixed wireless access has also changed a little bit. Some are doing -- using more the volume-based offering, where you actually sell buckets of data rather than an unlimited setting. But that with 5G is changing. So there's more and more that are actually doing -- offering fixed wireless access, what we say a speed-based or quality of service based, basically in the same way you sell a fixed program in connection with an unlimited usage but with the [indiscernible]. So that is more popular in, as you see, here in North America, but it is growing in other markets. So it varies a little bit. But looking at fixed wireless access, Richard, if we go back to the forecast here, we are -- haven't really changed our forecast in terms of number of connections. What can you say? We are introducing the first time here a regional split of fixed wireless access. Can you please comment on what that gives us?

Yes. Well, well similar to many other cuts here, you will see that Asia Pacific is the largest region. But of course, there is a difference that here, it's actually India that drives the [ APAC ] part with very ambitious goals for fixed wireless access. And that's also one of the key reasons why we increased our forecast in November. While China is not seen as a major fixed wireless access market. So this is really a different picture compared to the usual one.

And we see 5G fixed wireless access connection being the dominant one very soon and it grows rapidly. If you look at another segment here, it's the IoT part. We are seeing -- continued seeing an uptake on broadband IoT, which is more bigger IoT devices, which require a little bit higher bandwidth, but it's continued to be rolled out in a lot of different markets. And of course, this might change a little bit. We know we've recently seen also from a standardization perspective, this new standard called RedCap, reduced capability. I know Richard, this is maybe putting you on the spot here, but we haven't really included those forecasts. But can you say something about which segment would we see Redcap maybe impacting.

We would consider it as one of the broadband segment here. So it is actually a little bit between the broadband and the massive IoT segment, offering greater flexibility between battery life, reach -- and geographical reach and bandwidth. But we will see the part of the broadband IoT, and it will likely become a significant part of that segment. But it's still early days to see where it ends up, but it has a good potential there.

And we do state in this slide here, so that IoT devices connected via 2G and 3G are in slow decline. And I forgot to ask you on the previous slide, but how do you see some setting of 2G and 3G networks across the globe? And as IoT devices, what keeps them running so to speak?

It varies between markets. If you look at Africa and Sub-Saharan Africa, it's still the handsets and the price points, the battery life and robustness of the handsets that are major factor in keeping the 2G networks alive. And of course, in many other countries, there is not a lot of 2G handheld devices left. There is really the IoT device that keeps up and migrating or sunsetting the network, then it becomes a case of how do you handle those IoT devices.

So let's move over to traffic, which is, of course, then in terms of mobile network traffic or network in exabytes per month is what we actually count here. This graph we have had since the start of the reporting back in 2011. And as you can see, the growth continues. Right now, we are on a year-on-year growth of 36%. The black line here is basically the year-on-year growth, which have come down after some real spikes in the beginning of 2019 and even in 2017. But of course, with bigger and bigger base, the year-on-year is kind of expected to decline a little bit. But what can you say about the uptake of traffic in the world and the year-on-year growth, especially going forward maybe?

Well, going forward, we expect the slightly downward sloping growth rate to continue. So we will most likely have a situation where the growth in gigabytes -- added gigabytes each year is larger than the added gigabytes previous year, but still the growth rate as such will probably continue to decrease.

And here, we look in the future on the traffic side, we are adding -- we have both of the 2G, 3G or basically, it's 4G data on the bottom here, where we have 5G on top and then fixed wireless access over there. Here, we say that all mobile data growth within 5 years would come from 5G. So 4G will stop growing. Is that what you're saying? And then how do you see fixed wireless access that also grow with 5G now -- 5 years from now?

Yes. It would be a combination of the high-end users transitioning first to 5G, what we're seeing today, decreasing the growth of 4G. And by the end of the period here, it will be the kind of lower-end use of, sort of, say, that remain on 4G and the bulk of the high traffic ones will be on 5G. The same will most likely to be true for fixed wireless access.

And we also state about XR-type services, which is an extended reality. It could be augmented reality, virtual reality or combination, of course. And we do talk about an initial uptake of services. But our -- what do we see? We know we have an article also, which I will come back to that talks a little bit deeper on that. But how do you see XR impacting our -- this forecast up to 2028?

There is some XR in the forecast, but it's still our view that it will be a limited share in this workout period. Of course, the timing of the take-up is very difficult to estimate. It's still very early days, but we think that the major part of it will occur after 2028. Well here, we are talking about a global population. So when we say that we see a major uptick, we really -- we need to see it as a mass market phenomenon. So early days. We have already, of course.

Yes. So looking at the data growth per smartphone, which, of course, then can include some of the tethered traffic over XR on top of what you do with your smartphone. These are the different regions. We're right now averaging -- already the average around 16 gigabytes in end of '22. I think we have 20 gigabytes on global average right now -- or we will do that. We'll reach that in end of 2023. But what to comment on this maybe is, again, India. I know some reports a couple of years ago, we probably didn't expect India to continue to lead the regions in terms of smartphone usage. What has changed in our view here on smartphone usage?

Well, in simple terms, history has quarters that a market like India with very fierce competition can drive huge traffic flows. And it's also evident that the assumption that at least I had many years ago that we will have a closer connection between, say, GDP per capita and traffic volumes for subscription, no longer holds true. It's all the factors that determines. And there will, of course, be access to content, the popularity of video content, availability of that -- the availability of fixed networks in the homes that we manufacture. But it's clearly not only GDP, [ what is GDP ].

Yes. And I guess there is also a lot of variation. Now we talk about average traffic. And within those numbers, it varies, of course, between different types of users. And therefore, the forecast in itself becomes sensitive to those variations. But if we look at -- we actually did some measurements in both the European service provider and North American service provider, where we looked at how much the share of subscribers and the traffic that actually generated. And here, you can basically see that if you just take the light users, those represent a subscriber share of about 60% in both these networks while generating around 5% of the traffic. On the other hand, you have the other scale, the extreme users, which are very few, but they generate almost 40% or even more than 40% of the traffic. So this, of course, how do you, as a forecaster take all of that into account in terms of looking at how the sensitive would be in the forecast?

Yes, that's a tricky question, and it's -- it really shows that the averages are just averages. And of course, when you weigh everything together, you will end up with an average, but that really says nothing about the individual subscriber as such. And if you look at these, I mean we -- these numbers we will have -- at the extreme, we will have some fixed wireless access subscribers that consume maybe 1,000 gigabytes per month. And on the other hand, we have a large shareholder population also, subscription population, that really use quite moderate data amounts. And this also, in a way, mirrors the situation between operators and between markets. So in some markets, there is very high data traffic. And in the neighboring market, there may be quite low data traffic due to tariffs or cultural traits. So there really is a huge variation beyond the abilities that we talked about.

Good. We will move on and talk a little bit on the population coverage. We have added a little bit more information in our population coverage charts where we looked at the different regional splits as well. We are splitting out here, both 5G in total and 5G mid-band. Basically, population coverage for 5G, including low-band, including basically mid-band, also high-band, of course. But if you look at the 5G mid-band itself, you see that population coverage in the world is around 30% right now. But it varies quite a lot with North America being on 80% of mid-band and China around 90%. We have other markets which are lower. Europe, around 15% of 5G mid-band, which varies a lot. And of course, mid-band is important because that's where you get the more higher speeds and more 5G capabilities coming right. And of course, connected with stand-alone and connected with good performance, then that, of course, changes the performance of 5G. But what can you say, Richard, about the -- again, the comparison here between regions, both on total, but maybe more on the mid-band side?

It's very evident that in some regions, we are still in early days when it comes to 5G rollout for high capacity. And we can see that the U.S. where there's strong competition around this, and the frequencies have been made available in a timely way. And in China, where decision-making is a different process, more [indiscernible] way, but really the rest of the regions are -- still have a long way to go in mid-band coverage.

And we do see around [ 35 ] networks being launched with stand-alone, [ 240 ] overall in 5G. So of course, the more you get more stand-alone coming up, the more experience can actually improve. But it's also connected, of course, to devices. So let me go to the device side. Here, we basically talk about both the shipment, but also the technology itself. And there's a lot of abbreviations here. We probably need to go into the report to dig deeper into this and get all the abbreviations correctly. But it basically talks about carrier aggregations in many different forms, especially for stand-alone where you can get -- we are also seeing device manufacturing talking about in 2024, having a 6 carrier aggregation between FDD and TDD for stand-alone, but also for uplink between FDD and TDD. So there's a lot of innovation and a lot of new types of combinations coming up, and here you also see the RedCap device capability. But overall, the smartphone shipment dropped even though the high-end segment has been resilient. What does this mean for 5G? We're talking about the -- still a growth of 500 million 5G subscriptions this year. How does that combine with the smartphone shipment being dropped, Richard?

Well, it ties in with the expectations here, given also that some of the smartphones will already be replacement devices. Well, of course, the smartphone shipment volume is a key to subscription penetration. So if there's a further drop, then that will affect the forecast. If it goes better than expected, it will be time to increase the forecast, but really quite big swings in this last couple of years.

It is, it is. But it's an impressive amount of 5G smartphones being launched with more than 80 so far in 2023, almost 900 in total. So of course, the share amount of different models to choose from held when it comes to the uptick of 5G. And with that, we will leave the forecast. And now if you have questions, please, I see some of them are coming into the Q&A. Put them there and ask more questions. We will have a Q&A at the end of this session. But now I will move over and welcome Hai Thoo here, and we're very honored to have been able to work together with Singtel on an article exploring differentiated services with 5G networks. So Hai Thoo, welcome, and please, please take it away.

Thank you. Yes. Good morning, good afternoon, good evening. And thank you for joining us and joining me in this particular segment and session. First of all, I want to thank Ericsson for featuring us in these issues and also for the partners, the 5G partnership, over the last 24 months. Yes. Just getting a bit into the journey, the whole Ericsson and Singtel 5G stand-alone journey and achievement over the last 24 months. We launched the 5G stand-alone network in May 2021. That is almost 24 months ago, and that's been really the first 5G assay network in Singapore. And we have gone on then on a very aggressive rollout over the 12, 14 months and actually achieved nationwide coverage, which is in the Singapore regulator's destination, more than 90% -- 95% of the country. And this Singtel and Ericsson had jointly achieved this in July 2022, and that is 3 years ahead of the commitments or the requirements put up by the Singapore regulator, IMDA. And having a nationwide 5G network was really the starting point for us. And shortly -- and that also coincides with the opening up of the Singapore's market due to post COVID, the COVID has subsided in Singapore at that point of time. And the first major international event at that time was the Formula 1 Singapore in September 2022. And we actually took the opportunity. We were piloting, we are experimenting on network slicing, and we took the opportunity to implement network slicing around the Formula 1 circuit. And that was really a world first in the live network on a commercial basis. And since then, we have gone on to pilot, to implement, network slicing on various major events like what you see in November, the FIFA World Cup in Qatar. We made network slicing available to people who subscribe our in-house video streaming service, which you can stream live forecast matches on a dedicated slice, guaranteed quality of services -- quality of service. And we do see differences in terms of quality. The images were such sharper even at counter basis. And that has been our -- we have since then gone on and did various implementation through network slicing. And then we have crossover, we have commercial customers with growing network slicing. Okay. So as we deploy 5G and then we were looking forward to a lot of -- we were drawing some lessons from what happens in the previous generations of mobile network. And in the -- and one of the moments that we actually picked up was when we transit from GSM to 3G, and that was the introduction for the first time. There was some form of data through the secure network, but 3G data -- 3G was really the first time in industry going into mobile data in a big way. And we were struggling to find use cases for mobile data at the point until the iPhone moment with the touchscreen and the conceptualization of mobile apps with one application, having one function. And then it really helped mobile data to go and usher in the era of LTE or 4G. And as we ramp up on the 5G network, we are at the beginning of 5G, deployments of 5G and certification, there was much talk about use cases to [ block ] high bandwidth through low-latency, high-density ability to connect with many devices. But I must say that the market kind of trailed behind the technology, again, in this particular instance. And this is where we start to look at a new potential, new value -- unique value addition of 5G, and there's network slicing. And this is only -- we are able to only do that on the 5G stand-alone network. And this is where we found that there will be potential -- a lot more potential use case as found in this slice across the consumer, enterprise and even at public sector. We map out some of the use cases that can be fulfilled in the next 1 to 2 years and some further years, things like autonomous vehicle that requires a lot of other regulations involvement, smart energy, smart city. These are some of the application that's further down the horizon. Now on -- further on more network slicing, we are looking traditionally in mobile network. It has always been supported. It has always been powered by the consumer segment drive the vast majority of the usage. And that's how mobile network since GSM has been supported, through GSM 3G, 4G, and that has allowed us to gain economy of scale. But as we amount on 5G, we start to see that the potential incremental value may come from the business segment, from the B2B or even from B2B2X. So -- and this is where we see that we can transform, we can form economy of scale, where you have a lot of user in one network into economy of scope. And that is where you have a lot of different applications, different logical network through network slicing. You can have now multiple -- you have economy of scope, you have been multiple usage on the same network. We can create multiple logical network, multiple applications. Customized purpose, fully-built network for specific industry or specific organization for specific use cases. And this form of network implementation also allow us to be very focused on our investment. You actually build on customized network base on a specific network slice or specific traffic segment. And you do not have to invest huge capacity, huge server or licenses for the entire network for a specific user. Instead, you are able to now purposefully build or customize the network base on network slicing based on certain network traffic. And this is how we initiate almost like a marketplace to design and customize 5G then work according to use cases to network slicing. And it's almost like a market, a supermarket where you can pick and choose some of these network features. We have -- over the last few years, we have piloted on relative priority. We have piloted on radio partitioning. We are now piloting and working on emission control access priority, minimum rate or even cybersecurity. We have, in fact, announced earlier this year in end that you see that we have created a slice on network cybersecurity. And really -- and also through Paragon, we are beginning to test out this concept of customized, specialized network to -- network slicing. And we believe that in the coming months and years, this is going to be a important unique value proposition of 5G, where we can drive incremental value for our customers and drive incremental value for the industry. Yes. With that, yes, I come to -- just a very quick sharing about Singtel and Ericsson's partnership on the 5G stand-alone network and our adventures in network slicing. Thank you.

Thank you very much, Hai Thoo. That was very interesting and insightful. Thank you. We'll come back with the Q&A soon, and maybe there are some questions for you in there as well. But let's just finalize the presentation part. I just want to say a few more because this what Hai Thoo presented from our collaboration with Singtel of one article, we have 3 more articles in the report. Very much continue to focus on these topics on traffic, traffic handling, quality of experience and also related to possible scenarios for AR going forward. So I would really encourage you all to have a look at that just to give you a snapshot of what these are articles, the deep ties actually is about. Let me just say a few words on those. First of all, we have one article that talks about how traffic happens in itself drive network evolution. We have analyzed the patents of different locations in North America and Europe, especially between urban areas and rural areas and dense urban areas and dense suburban areas. And if you compare the dense urban areas with rural areas, you see the traffic demand can be up to 1,000x larger. So when we talk about traffic in general, we have to have that in mind that traffic may spread a lot. It varies a lot between what type of area we talk about and where the growth is. We're also seeing uplink performance becoming more critical. We talk about that also in the article because of the different services that are coming up, but also the fact that 5G rollout is far from complete. Are the mid-band only deployed around 25% of 4G sites globally? We look at these different deployments in 2 markets in EU and U.S. and also then compare how many of the sites have actually been upgraded with [ NRFB ].How many percentage of sites, total size have been having a mid-band? Or how many are in mid wave? and which is then more prominent in the U.S., example? And that you can see then how it varies between the denser and the urban and the rural areas. So that, of course, is -- it's an interesting article if you want to understand a little bit more challenges in dimensioning and working with traffic across the network and how that relates to different population areas. The next article is more digging deeper into XR or AR, I would say, and how -- what happens when AR will come in a big way. We've all seen recently the announcement from Apple about new types of AR assets. That's, I would say, a starting point of many more devices coming up. But we have all the scenarios here and then used our own research department to look at what would actually it mean or what would it take to handle a lot of new types of XR traffic in the network. And it's very clear that it could actually mean a doubling of traffic in 2020 -- or 2030 than what we basically are saying today. We don't have it as a forecast, but it's a scenario depending on how much it actually picks up. But it is an area which we are looking very closely, too, to see how the uptake will be and then how that means. But it would require new spectrum, additional spectrum to support, but also probably an increased strong our radio access network density. So please look into that article as well. And the last article I want to pitch is one that we have worked with our colleagues in North America and looking at mobile quality of experience and how networks are ready for new services. Here, it's very clear that we have been used to measuring performance based on either bars on the phone or looking at speed tests and looking at download speeds only. But when we go into more advanced streaming services or XR services, also gaming, experience might be difficult to measure just by download speeds. So here, we introduced based on acceptable -- accepting or standardized models in different industries, how we could actually work on introducing the old mean opinion score type of measure by basically using the right models to actually evaluate experience rather than just one of the KPIs. I think this is an interesting starting point for discussion for what is experience, what is -- what type of content do we expect in our networks, and does consumer expect, and how can we measure that going forward. So with that, I think we'll round up the actual presentation part. These are the top key highlights. And this time, it's also part of the press release. If you've seen that, the 1.5 billion by end of this year, 7% growth in top 20 markets in the last 2 years and the fact that we have 100 new service providers offering fixed wireless access over 5G. But as you've seen, there is tons of more figures and numbers in the report to dig further into. And with that, I will open it up for going into some of the Q&A. So please continue to ask questions, and I will welcome Richard and Hai Thoo back to meet, and I'll see what type of questions we have here.

Thank you for giving those. Richard, I will start with one question for you. When do you expect broad availability of 5G stand-alone in Western Europe? We were talking about stand-alone in Western Europe, but it's a little bit behind. What's your view on that?

I think it's probably a couple of years away if we're talking wide availability.

Yes. So I guess, I mean, we are seeing a lot of interest in a lot of new type of use cases. Of course, that requires 5G stand-alone. That actually will improve that, but to have availability everywhere, of course, that takes time to build up that type of our capabilities. It links very much into the mid-band discussion as well. And Hai Thoo, I think we have a question here from [indiscernible] deployment of network slicing today via multiple static slices rather than your SP and dynamic slice. Something you can elaborate on?

Yes. Today, the way that we were one of the first to really venture into this 5G network slicing. And in fact, we have planned to implement dynamic network slicing to network organization, looking at network assurance, but we were very eager to embark on this pilot. And actually, we went on a static slice, and this is really non-SP. It's is where it applies to the entire slice, to the entire line of the user. So it's not application-specific at this moment. But we are certainly looking at dynamic network slicing, but looking at [ ISP ]. And we are, in fact, looking at many other features. Like what I said, almost like a supermarket, picking and choosing the various features to rack on to this network [ slicing ].

Thank you. Next question here is maybe I can -- need to report that telecom revenue growth is connected to 5G. Do you think that there will be no growth of the telecom revenue without 5G, given inflation trends in all round? And -- yes, I mean 5G is a compelling event of actually being able to offer something more, and we have seen a good correlation. We cannot prove the causality between 5G subscription uptake and revenue uptake, but it's correlates very well. And I think inflation in itself is more of a pressure on cost for operators, I would say, right now. But we would -- we don't see so much increase in prices on communication. But -- so I don't see inflation actually impacting that right now. We'll continue. There is a question here from [indiscernible]. Is there a negative correlation between average gigabit per month use in a country versus penetration of fixed broadband? That's Wi-Fi in homes. When you have a lot of WiFi, does that fill over to how gigabyte per month use work? So basically the country with good fixed broadband, do they have less gigabyte per month usage ?What do you say, Richard?

Well, let's say that I try to find proof of that idea because I think it's eminently not to look at it that way, and I'm sure there is such a relationship. But on the other hand, there is various other reasons, so many differences between markets and data traffic. So that's kind of overshadows that correlation or at least makes it difficult to prove. So we have several markets with very high fixed penetration in the homes and still very high data traffic volumes, and we also have the reverse. So I've not been able to prove it, no.

Thank you. There is another network slicing question here, more general. But maybe, Hai Thoo, you can please help me with this. It says from [indiscernible], how does 5G network slicing address the challenge of delivering customized and different services across the right industries while ensuring efficient resource allocation and network optimization? I guess in general, the value in network slicing among industries. How do you look at that?

How -- so I think the network slicing, the features is -- for the first time in the history of this industry, we are now able to -- particularly on the radio, which is where the resource is very scarce and limited. It's always that. And for the first time in the history of the industry, we are now able to set aside -- we are able to set aside resources. We are able to provide specific customization for specific industry. So I think this is something that is truly unique. And for the first time, we are able to achieve that. And this is where we think that you can bring about -- you can almost see 5G as a general purpose technology. It's a technology where now it become ubiquitous, become available. You can start to put multiple kind of enterprise operation on it. The CTO, the CFO for the first time is people go to the point and say that we can now leverage on 5G network to run mission-critical operations. And that's something that it wasn't possible, and that is why there is always a limitation when it comes to mobility. But for the first time in the industry through 5G network stand-alone, network slicing, we now are able to put on enterprise mission-critical services on.. And there's also a question on whether 5G is about efficiency or about growing revenue, and I think the answer is always hard to predict the future. But I think the answer can be both. Like what I said, you can now move from the economy of scale to economy of scope. We can now do a lot more on the network than before. We can now build multiple logical network for different purposes. And that drive efficiency. You are able to now make -- do more with less. But at the same time, when you do that, you need to create value for your customers. In this case, apart from the consumer, what we mentioned, there's also the incremental value can be coming that we can create for the enterprise customer or enterprise customers' customers. And that's the B2B2X model. So -- and when you start to create value for your customer, and that's where the market will reward you with increased revenue and EBITDA and better ROIC.

Thank you, Hai Thoo, very good. And I think there is one question which you may be willing to clarify a little bit. It says from [ James ], I'm encouraged about your saying XR will contribute significantly to mobile data usage. To date, there hasn't been a globally successful smartphone-based XR platform. Very few smartphone manufacturing interested in making more and so on. But I guess we didn't say that it will impact the forecast up to 2028, really. But can you clarify, Richard, a bit because, of course, the amount of data in networks across the world is huge. So it would take a bit to actually impact your forecast, wouldn't it?

Yes. With billions of huge smartphone, the average traffic of upwards of 50 gigabytes per month at the end of the forecast period -- a large population of XR users to really make a dent in that curve, I say. And a big dent in that curve [Technical Difficulty] really expected until after the end of the forecast period.

Exactly. And there was one more question. Might be interesting. When will we see an outlook for 6G services in your report? Richard, I don't know if you have a good answer to that. I think we're still waiting for the standardization to say when 6G will come and so on. But what's your view?

I mean we are getting close to that. Keep reading the coming additions.

Exactly. Keep reading, you will get it. And then there is one more question here. Do you expect future augmented reality use to drive outdoor data or mostly indoor? If I start there, I think that when we look at the different types of use cases that we see today on XR, they could be -- a lot is indoor, but it's more with navigation things in airports or malls, but it could also be outside. So I think it's a mix of that. But of course, driving data traffic, I would assume that most of that would be outdoor AR traffic. Or what do you say, Richard, how would you see that impact?

Yes, that's our expectation. If we split the XR and AR and VR, we will expect to see the VR part mostly indoors and perhaps in homes and industries. And AR relatively outside and in specific industries.

And now we're getting close to the end here. So I'll ask you, Hai Thoo, is there anything more you would want to add, given a lot of the questions that you see? And -- or other things that you have thought about doing that. So I'll give you the last word here.

No, I suppose that we are still -- we have a peek into what the capability of 5G. But I always like to use the quote from this William Jameson, that the Street finds its own use for things. And sometimes, the market will teach us what -- how to make use and leverage on the capability of 5G. And you kind of look forward to that, and you need to stay open minded to embrace that.

Thank you, Hai Thoo. That was a very good ending quote there. And thank you, Richard, for joining. And I will say thank you to all of you that have joined this webinar. It will be able to be looked at on-demand afterwards. But thank you again, and have a good rest of the day.

Thank you.

Bye-bye.