00:00Tell me about the China exposure you have.
00:03You have supply chain there, you have consumer,
00:06and competition is really what you have from China.
00:09What did you make of the relationship between US and China
00:11that we just saw overnight?
00:13Thanks for having me. That's a great question to ask.
00:16Very hard to answer, actually.
00:18We like to do that in journalism.
00:20No, I know, I know.
00:21But I think there is, you know, China is started out
00:26as I often look at the old telecom movie from China, right?
00:30It actually started out as being a prioritized sector in China.
00:34So they had almost 100 vendors, if you go back 30 years.
00:40They consolidated into really two
00:42that became fierce competitors in over a decade.
00:47Huawei being one key one.
00:48Huawei, of course, being the biggest.
00:50And they started out being, of course, low cost
00:53and fairly simple.
00:56Today, they're, of course, a phenomenal competitor.
00:59And it's the one that we benchmark ourselves with
01:02and say that's the one we need to beat, actually.
01:05We need to win on technology.
01:07We need to win on cost position.
01:09So for us, the competition with China is front and center
01:13and has been.
01:14And I do believe that for the rest of the world
01:17to compete with China, you need to lead on technology.
01:20But you've been outspoken in the past,
01:22sort of pushing against this idea of sort of a focus
01:27on your own country and banning in Sweden.
01:29They pushed out Chinese competition.
01:31And you actually at the time said that's the wrong thing to do.
01:33In the U.S., that is your key markets now are the U.S.,
01:37the Japan, there are other nations.
01:38How do you think about China being excluded?
01:41And should they be?
01:42You know, the way to think about China is actually it's multi-prone.
01:47So if you take telecom, again, it's a scale game.
01:51They have scale in their domestic market.
01:53That's a market you need to be in.
01:55But more importantly, what was also clear is that
01:59given the development in China economically and use case-wise,
02:05you saw data consumption grow much faster in China
02:08than anywhere else in the world.
02:09That led them to lead on or demanding certain technologies
02:14ahead of the rest of the world.
02:16So unless you're on the same development curve as they are in China,
02:21we're not going to be able to bring those solutions globally.
02:25So if we take in our case, we have what's called massive MIMO.
02:29Basically, it's a way to increase capacity in the radio network.
02:34They needed that earlier than in the rest of the world.
02:38And therefore, if you're not there when that happens,
02:42you don't develop the technologies at the same pace as they do in China.
02:47So I think it's a much more interdependent world.
02:50You need to think of the world as being interdependent.
02:54And you're dependent on geopolitics, tariffs, inflationary pressures,
02:57the Strait of Hormuz again front and centre today.
02:59How are you managing that?
03:00You know, we actually took a decision a number of years ago now
03:04to say that we have three home markets.
03:07So that was recognising the US because it's a front-runner market.
03:14Big India in those days was big.
03:17Today it's starting also to be front-runner on technology.
03:21Japan, Japan is very big in telecom and also an early adopter of telecom.
03:26So we said that's markets we need to win in.
03:29To make sure that we combat the scale of China.
03:33So we did that.
03:35Then we said we need a flexible supply chain in order to manage any disturbances.
03:40So we built a factory here in the US.
03:43How big is your manufacturing now here in the US?
03:46We manufacture a large portion of what's supplied to the US
03:50is manufactured here in the US.
03:51So we built that in 20...
03:54We commissioned it about 2020.
03:55So we were ahead of the really supply constraints in that sense and the tariff issues.
04:02So we've been able to use that manufacturing footprint, R&D footprint,
04:08to actually manage a bit of the geopolitical exposure.
04:12Now we look at the markets today and extraordinary ramp higher on the back of AI.
04:16AI is the excitement in your area as well.
04:19Look, you've got competition with Nokia who has got a strong relation with NVIDIA
04:23and they've gone big into data center.
04:25Briefly, how are you thinking about the AI opportunity?
04:28We think of the AI opportunity as a massive opportunity for us
04:31for the simple reason that AI will ultimately move out to the physical world.
04:37Call it industrial AI, physical AI.
04:40And that's going to require inference at the edge of the network
04:44to manage the latency requirements, etc.
04:47And then connectivity will be needed.
04:50So we will start to enter a world where everything has to be connected.
04:56So when everything is connected, you can't connect them with wires.
05:00It just simply doesn't work.
05:02You're going to need the terrestrial cellular network
05:05to provide the backbone to scale AI.
05:09So I think of AI, yes, it's going to fundamentally change the economy.
05:14It's going to be a driver of productivity.
05:16It's hugely positive.
05:18And for us, it will be a benefit
05:20because we will see a new type of traffic coming in the network.
Comments