Michael van Rooyen:
0:00
My guest today was so interesting that we had to break it into two parts. Here is part one of that interview.
Ian Ross:
0:07
I think we are going to get to the point where we’re going to look at the cost of putting a modem connected to a 5G network is less than dropping a copper cable.
Michael van Rooyen:
0:17
Today I have the pleasure in having a chat with Ian Ross, who’s the head of private cellular networks for Australia and New Zealand at Ericsson. I’m a big fan of LTE and I think we in Australia haven’t seen the full force of LTE being adopted by customers, and today’s going to be a very interesting conversation with Ian, who basically lives and breathes the space. Ian, welcome. Thank you, g’day. How are you? I’m very well, very well. Thanks for meeting me today in cold Melbourne. I know you’ve been traveling a bit all over the world, but I’ve flown in today and it’s certainly colder than I expected.
Ian Ross:
0:44
Yeah, we agreed as well.
Michael van Rooyen:
0:49
Thank you. Thank you For those who are listening. Before we get started, do you mind just sharing a little bit about your background in the industry technology or other background and what led you to your role as head of profitability at Ericsson for ANZ?
Ian Ross:
0:57
Yeah, look, absolutely. Someone described it the other day similar vintage as me. I’d been in the industry for a quarter of a century and that was a bit of a concern when people start talking about their careers in centuries. But look, it’s a long established career in ICT, worked with many vendors and integrators over the time, a range of different technologies, but I’ve always been at the forefront of new tech and particularly how it’s applied to enterprise to create value and to drive innovation.
Ian Ross:
1:21
My career evolved into bringing new technologies to market and trying to bring new service to market and monetize them, and I found myself in an area where my skill set and interests really revolved around technology market development, recruiting channels, recruiting customers and driving that new step forward. So 10 years ago I found myself asked to rejoin a tier one global vendor. They had a mobile core that was selling successfully to carriers around the world, but a mining house had decided to build a private LTE network and has shown the world that mobile technology is just not for carriers, it’s for enterprises. So I took the opportunity and suddenly found myself immersed in the area of industry All new use cases, new problems, new, exciting things. It’s been an absolute ride, just not dealing with the traditional ICT problems. You’re dealing with OT buyers solving operational issues.
Ian Ross:
2:13
The opportunity came up at Ericsson. Ericsson was looking at taking their mobile leadership and moving it into enterprise. They’d had a few goes at it previously but were really starting to double down, and so it was a great opportunity to look at Ericsson’s leadership in 4G and 5G my background enterprise and really start to see what this market could do with potential. Wow.
Michael van Rooyen:
2:31
Private seller for Ericsson Private seller and, as you said, you touched on a great point there, which is LT has always been established by the carriers and, of course, particularly Australia. It’s been locked up mainly by the carriers for, obviously, customers and population use. And then being able to use it in a private format is probably what people don’t understand or have never thought about. People are certainly not in the industry. It would have been interesting to see how that first customer did that. There would have been a lot of concerns and problems.
Michael van Rooyen:
2:59
But I mean, look how well the networks are working for us everyday users and if I think about the ability to continue to deliver those services, as I said at the beginning, there I don’t think we’ve seen the tipping point of of how much we can do with this technology and of course, for some people who are listening, because whilst we’re you’re talking in half decades or quarter decades, I should say sorry is some of our listeners probably don’t know Erickson. Obviously some of us will do from the, the old tedium days and and core, but people just use their phone, they don’t think about the back end. Yeah, and of course Ericsson has such a long history in carriage and telecommunications etc. Well, I think we’ve been in Australia for 134 years, oh wow yeah it’s funny enterprise.
Ian Ross:
3:33
People don’t really know who we are and what we do. The the technology provider behind their mobile networks. You know 1g, 2g, 3g, 4g and now 5g, but they keep thinking of us as son Ericsson, the maker of mobile phones, of course. So once you get over that, it’s like, yeah, we actually do design and manufacture all the mobile equipment that runs mobile networks in this country. You can’t make a mobile call in Australia without it going through Ericsson technology somewhere. Wow, so it’s, yeah, it’s the hidden achiever.
Michael van Rooyen:
4:02
Obviously you work with carriers and certainly Heritage has been in that space and working with PrivateLT specifically. Can you give us some insights on the data consumption? Are you seeing this 10 times, 20 times, 30 times, over the time you’ve been seeing this? Is this just a huge trajectory of data consumption? Yeah, it just keeps skyrocketing.
Ian Ross:
4:19
I think everyone’s always spoken about the internet fueling massive data growth, but it’s just been moving dramatically to mobile. Over the last few years the growth in the transition from 4g to 5g has been astronomical just not for us, but also for the industry, you know. I think we’ve seen rates of growth four times what they were with 4g. We’re hearing stories around networks around the world building up and adding users faster than any technology before, so it’s a definitely exciting area?
Michael van Rooyen:
4:43
Look, it certainly is, and I guess off that the space has rapidly evolved. As you said, we started kind of 1.2, gprs and all these things and you’ve been through all the life cycles, and then there’s this rapid adoption of 4K streaming video. Everyone wants to connect to these Apple Vision, that’ll be the long-term play, all this high-speed stuff. And with that evolvement, what are you seeing as the most significant trends in the sector?
Ian Ross:
5:05
Look to me and look it might be a biased view, but I actually think the most significant trend has been 5G for industry. When we think about mobility, we think about 5G. We think about mobile towers, we think about phones and tablets and watches. But when you move beyond that consumer view of the world and we start to think around, well, what can 5G really do? 5g has been designed for massive scale and machine-to-machine communication, so it’s really been designed for industry. And that’s when we see the 5G potential of 10 to 100 times increase in speed, the ability to connect a thousand times more devices being five times more responsive, driving automation, digitizing things, improving safety, driving productivity, improving efficiency, making businesses in Australia a greater comparative advantage on the global scale, and I think that’s the real big change that is being driven by mobility Right.
Michael van Rooyen:
5:58
So people have been always saying the mobile phone is the thing they think about in the G space let’s call it that. But 5G was really, as you said, built for industry. I was interesting talking to the guys at Cisco the other day and they have their observability platform and they’re talking about how they’re working, even in that space, to do observability from cars and, of course, new connectivity. But on that, are businesses as yet getting the transformation that will give them and what are some of the other key benefits that organizations could get out of it from an enterprise point of view, I see many organizations at various stages in their digitalization journeys.
Ian Ross:
6:32
Some of them are completely involved in automation and radically changing how they conduct themselves. Others are simply trying to connect workers better and provide a better quality connectivity. And I think as organizations go on this journey, they start to realize there’s more and more different things they want to connect. And as businesses digitalize more devices, they’re moving more data. That data is more critical to day-to-day operations. It’s not sending emails, it’s controlling a production system, it’s responsible for environmental outcomes or for safety control, and that data ultimately has to be lower latency. So I think organizations, as they move through their digitalisation, are starting to realise that the tools they’ve had at their fingertips previously aren’t as capable to handle this new frontier they’re driving towards as they were previously.
Ian Ross:
7:16
We’re seeing Wi-Fi as a great technology, but when you start to put multiple applications on Wi-Fi or you want to start to provide pervasive connectivity options across a wider area, it becomes a very expensive technology to roll out at scale and what we’ve seen in the field it becomes somewhat unpredictable under load. So if you’re looking at a critical control system or a monitoring system, something that just not observes but controls, you need a high level of deterministic performance. You need that predictability. You need that throughput. Rolling out computer vision and AI takes a huge amount of uplink throughput. When we look at SCADA and other systems, everything now is about massive sensor scale and digital twins. I speak to oil and gas companies. They have a vision of half a million sensors on an offshore platform.
Michael van Rooyen:
8:01
Half a million, half a million On one of those offshore plants out in the middle of the sea, basically if it has a temperature, if it vibrates or makes a noise.
Ian Ross:
8:10
they want to be able to put a sensor on it and bring it back to a digital twin for their simulation. Wow, Now, that’s aspirational. That requires an order of magnitude change in the cost of these sensors, but that’s where the industries are going.
Michael van Rooyen:
8:20
Right, wow, wow, half a million sensors. That’s incredible, and that just goes to show the power of it again, right? I mean, if you’re trying to deliver that as a Wi-Fi, nothing wrong with Wi-Fi. As you said, it’s been around for a long time, it’s serving its purpose.
Ian Ross:
8:31
It’s a great technology, it’s accessible, it’s well understood, but as the networks get more and more complex and more demanding, the fundamentals of the technology can’t keep up. Yeah, of course, and that’s where we see mobility and these 3 all your technologies really coming to the fray. Because don’t think of it as a network, think of it as a technology, and it helps businesses start to realize these advanced use cases that are invariably wireless. If you’re looking at drones or remote control equipment or even connected tightening tools, this is what we’re seeing a huge level of adoption in Europe and the US. Screwdrivers they’re connected via 5G. Wow Right, they self-calibrate, they provide full traceability, but they need connections, of course, and they struggle when you’re over traditional wireless technology, yeah, and that’s a good point.
Michael van Rooyen:
9:20
So if I think about taking the traditional RF and I’ll talk 802.11, so traditional wireless that people are used to trying to deliver, half a million sensors is just not going to be sustainable power, a number of access points network to support that, as opposed to being delivered by cellular. Which leads on to a really good point Everyone’s familiar with and I guess it’s important for people listening LT. They go to a carrier, they buy a service, they buy a SIM card and they pay for data and data plans are getting better. But just so we can just walk through this a bit more, so people can understand your role really as private seller there, do you mind explaining what private LTE is and how it differs from public networks? I know technically it’s not that different, but just for people listening, so we get that context of this and what the main advantages are for enterprise. Yeah, look absolutely so.
Ian Ross:
10:04
I said before, when we think about cellular technologies, don’t think about it as a network. I said before, when we think about cellular technologies, don’t think about it as a network, think of it as a technology, a wireless technology. So private cellular networks they’re dedicated, site-specific networks that use cellular technology but for the purposes of a single business, for an enterprise. So you think of a carrier network. You’ll have cell towers across a landscape. They’ll have the network core providing voice services and SMS and the sorts of things we use day to day, and we as consumers buy them. We buy a SIM card, we subscribe to our monthly plan. A private selling network uses the same technology but it’s really shrunk down to be right size for industry. It’s an enterprise that, within their boundaries, has their own radio spectrum that they transmit on. They have their own radio towers and radio sites and these could be large towers, they could be on ceilings inside a warehouse, they could be on light poles across a port. They have their own network core, not as big as running a nation’s network, but they have their own cell network core that sits in their comms room on site and then connects to their secure application workloads in their data centre and they’re responsible for running the infrastructure. So they own it, they operate it, they control access. They have their own SIM cards with their own network codes, their own encryption keys. They become their own carriers.
Ian Ross:
11:21
There’s multiple triggers to why they would look at a private network. Sometimes it is they need a network in a remote area where no public network exists. So are you going to extend a public network or are you going to build your own? In some situations it’s around design requirements that the technologies are rolling out. The applications they’re using may need to have coverage in very deep and dark areas of their facility and the public network doesn’t go there. Or they might have a critical uptime need. They want to design for five or six nines uptime and you’re not going to get that as an SLA from a carrier network. They might have operational needs that they want to control maintenance and upgrades in their time, on their scale, or if they just simply want operational independence.
Ian Ross:
12:01
The important thing with private networks is they’re air-gapped from the public network, so whatever happens in the public network doesn’t impact the private network. These networks are all sometimes used for performance, and we see this particularly in automation, where you’ll have particular applications that need a certain level of throughput or a certain level of packet loss, automation and remote control, and those levels of performance simply unavailable as a public service where they can be guaranteed but you can design for them in a private network. And I think, the final areas around security. The enterprise wants to control emphatically who accesses the network, who has the rights to connect their devices, what devices can connect, or simply to ensure that all data remains on site and nothing leaves. Many organizations say look, I have a critical data flow, I do not want to leave my premises, so I want to be able to connect it via wireless, connect it to applications in my data center and not have it go out to a public network. So many different scenarios and reasons why businesses look towards private cellular. There is no one reason.
Michael van Rooyen:
13:03
I mean, as you just ran through there, it ticks so many boxes. I’m happy you touched on the security aspect, right, because inherently people again in the tag of wireless people think oh well, there’s some security vulnerabilities. And you touched about securing what’s connected in their work. When we think about from an 802.11 point of view, there’s quite a bit of work and I think the industry is going to do a bit of work in the authentication space and that’s that traditional radius authentication but that’s more device authentication With cellular. Even the way it’s built from the foundations it’s secure inherently from the start. I guess on the flip side of that is the devices you talk about connector screwdrivers and others are they relatively cost effective? Is there a balance on the other end of the scale?
Ian Ross:
13:41
It does change with time. What we do see in this space, particularly with industrial devices, that quite often they’re engineered to a level of standard above consumer, so they appear expensive. That quite often they’re engineered to a level of standard above consumer, so they appear expensive, but you don’t have your mobile phone operating up to 85 degrees 2G vibration, right. So that level of engineering design does bring an element of price premium. But we do see with all mobile technologies that it does ride a cost reduction curve over time and we see an expanding ecosystem of 5G devices entering the market for industrial applications. But there’s also different standards of devices. So there’s the high-end, high-performance devices that are designed to deliver gigabits worth of performance. Then we’re moving into your IoT devices and your reduced capability devices that are coming out for 5G and they’re really going to drive that sensor sort of evolution.
Ian Ross:
14:30
Are we going to get down to the point where the 500,000 sensor vision is going to be an economic reality? I’ll remain an informed skeptic on that one. Fair enough, but I think we are going to get to the point where we’re going to look at the cost of putting a modem connected to a 5G network is less than dropping a copper cable and that’s actually what’s driving the evolution in the US in manufacturing that organizations look at the reconfiguration of their production lines or their facilities. They look at the number of cable drops they need to do. They have a number of around $1,000 US per drop and they start to realize that a few hundred dollars spent on a small modem plugged into accessible power. It becomes a very dynamic, very flexible, very agile form of connecting anything.
Michael van Rooyen:
15:13
Wow, if I think about manufacturing, car manufacturing alone the way they reconfigure the factories to build different cars. We just see cars come out of the factory but they have the process of retooling that kind of factory to run 20,000 of this car, then they retool it and that all comes at a cost. And if I think about even storage facilities, reconfiguring storage for optimization there’s always these plans for logistics Off that. So there’s plenty of reasons to do private cellular many, many benefits for the customer. On the other side, what are some of the biggest challenges organized face when they deploy private LTE or 5G networks and how can they overcome these?
Ian Ross:
15:45
Yeah, look. I think the biggest challenge has probably been around the complexity of these solutions. Historically, the advantage of Wi-Fi is it’s been seen as a simple technology. Lots of people understand it. It’s very familiar, well understood when we start talking about 3GPP and different acronyms and different approaches and what is ultimately a technology that’s been designed for national scale and security. It is a more complex and involved technology. Many of the early leaders in this space have struggled to get that expertise into their business and retain that expertise.
Ian Ross:
16:15
The way that what’s happened with the industry over the last couple of years is, I think we’ve realised that the target end users of these technologies aren’t experienced communications technicians like you have on a mine site. They are pulling cables on a factory floor or in a warehouse. In many instances the business doesn’t even have IT capabilities in-house. It’s all outsourced.
Ian Ross:
16:37
So what we’ve done as Ericsson and, I think, as a general industry trend, is there’s been a lot of work in taking the advantages and the innovations that 5G technology has and bring them to enterprise, so that complexity that has plagued these systems previously has now been replaced by systems that are highly automated. So we’re using orchestration technologies to automate the configuration deployment. We’re using automation technologies to simplify the ongoing lifecycle management. So now a multi-element private 5G network is as simple to upgrade as applying a new version of iOS to your mobile phone. It’s pushed out to the network, you schedule it, it schedules the upgrade, it’s all touchless. I think a lot of the work in the industry, and particularly where Ericsson’s been focusing, is to make this incredibly powerful technology much easier for enterprises to adopt and to use day-to-day.
Michael van Rooyen:
17:30
Absolutely Knowing the challenges we’ve had in that space. You just touched on a good point about upgrading similar to an iOS upgrade. If I think about the challenges and I won’t name the vendors, but the challenge of aligning backend infrastructure to firmwares, to new devices it’s actually quite a complex challenge. I’m impriming that someone somewhere thinks oh well, they’ll just replace everything in one go or the lifestyle. We know the practicalities. You and I have spoken a bit in the past, but one of the biggest things that always stands out with private cellular and cellular as a whole is really the frequency or the spectrum that’s available. That’s the biggest challenge for us right in this area.
Ian Ross:
18:05
Yeah, it is, and it’s a challenge, but it’s also one of the biggest advantages. Fair enough, what really is great about Private Cellular is it operates in licensed spectrum bands. Where you have Wi-Fi, that is, in shared spectrum, you can’t control what access points are broadcasting. Where, in a cellular world, you have to transmit with a license from a regulator. And so the ACMA in Australia, which means it’s your own little patch of radio spectrum in your area. No one else can use it and if they do, you have a recourse through the Telecommunications Act. So it does add to that security message that if you’re starting to put more and more digitalization strategy onto a wireless technology with Wi-Fi, you don’t really know if it’s going to be there tomorrow in terms of interference and performance. Where cellular technology you do have that certainty. But to do that you do need a spectrum license and this is why globally, and particularly in Australia, we’ve seen that the early adopters of this were mining houses and oil and gas companies. They have operations in relatively remote areas where they’re unpopulations. There is a lot of demand for spectrum, so there is spectrum free for them to be able to acquire a license to run their networks Right.
Ian Ross:
19:11
Okay, the ACMA, I think is being quite forward in what they’ve seen the use of these technologies in Australia and over the last 12 months, opening up spectrum licenses for enterprises at different areas. I think last year they opened up a huge amount of spectrum in the 5G bands that enterprises can apply for. They don’t need billions of dollars to do it, You’re buying it in like 1.8 by 1.8 kilometer blocks. That was for remote Australia and they’re in the process of allocating to metro and regional areas. So once that allocation process is complete then it will move to what’s called an over-the-counter regime. So if you’re an organization wanting to explore private cellular, you can now engage a third-party coordination company. They can work out what spectrum you need and then make an application to the ACMA and if the spectrum’s available, they’ll send you a small tax invoice and once you pay that tax invoice, the spectrum’s yours, oh right, and is there a timeline on that spectrum?
Ian Ross:
20:06
Typically pay for it annually. It’s called area-wide licensing. You buy these blocks based on what you’re trying to do with it. It’s quite flexible. It’s been designed to be multi-technology. Yes it works in the 5G bands, but you don’t need to use it for 5G. I have to represent Ericsson and say we’d love you to use it for 5G everywhere, Of course, but yes, no it’s an annual license renewal.
Michael van Rooyen:
20:26
Look, that’s clever, right. I mean, at the end of the day, the technology is there. Obviously the biggest inhibitor was spectrum that are processed so you can, as you said, have security, have your own frequency, know that no one’s going to interfere with you. Because you want that low latency, you want that reliability, knowing that you obviously talk to your global counterparts. Is this something that overseas have done for a while, like the us? Europe and australia is just not playing catch-up but really saying, okay, this does work and what we need to do to support the country.
Ian Ross:
20:50
Yeah, it’s funny. I think it’s positioned Australia as one of the leaders in this space. Okay, wow, the mining house that triggered all this, at least from my little lens of the world, was Australian-based Right. But what we have seen is in other markets around the world where industry spectrum has been more widely available, so they probably leapfrogged Australia a little bit in terms of spectrum access. We’ve seen these networks take off. So in Japan, in France, germany, in the US, with the Citizens Broadband Radio Spectrum, cbrs, it’s democratised access to spectrum and has opened up a whole range of organisations. So we see verticals that are really resonating around manufacturing. Manufacturing is not cars and white goods. Manufacturing, I think, is the fourth largest vertical, very big in food and beverage, pharmaceuticals, minerals and tobacco. The example you gave before around reconfiguring car production lines food and beverage production lines get reconfigured at a far more accelerated rate because we’re quite fickle as consumers, right, we don’t want to buy the same flavor of Tim Tams.
Michael van Rooyen:
21:49
We always need something different, right.
Ian Ross:
21:50
So we see manufacturing oil buy the same flavour of Tim Tams. We always need something different, right? So we see manufacturing oil and gas offshore, offshore refineries mining is a given Utilities. Wind farms actually are a very interesting area, particularly on offshore wind farms, because it’s pretty dangerous to go perform inspection and service on those turbines, of course. So they’re looking at coverage for safety, but also for drones for remote inspection.
Michael van Rooyen:
22:12
That’s cool. That’s cool. So many use cases.
Ian Ross:
22:15
Everything’s automating in container ports, particularly as a means of competition. So in Europe we see that all the countries and all the major ports are so close together. It’s all around. How do you move as many tier users you can as quickly as possible? These sorts of networks are being used to drive automation there. The idea is consistent connectivity throughout the entire facility, not patchy. So people look to 5G for that and I think, more locally, we see agribusiness as an interesting area. Agriculture is quite advanced in terms of digitalization but also quite limited in terms of access. Like all industries, they’re looking at connecting, securing, deploying the technologies.
Michael van Rooyen:
22:51
That’s fascinating. That’s fascinating. Touching on some of those examples, and I bet a lot of people wouldn’t have thought those four different industries are really straight business. Everyone thinks of mining, but there’s interesting data points you give there and other industries Off that, without naming any customers. Can you give examples of use cases where a business has successfully, or an enterprise has successfully delivered LTE and what the impact was to their operations?
Ian Ross:
23:14
Yeah, look, there’s a few. There’s a food and beverage provider in Brazil. It’s actually a public case, so we’ll just call it out by name Sure.
Ian Ross:
23:21
On their KitKat production line. They saw the need to drive digital quality. So they rolled out what were called hyperspectral cameras. These are cameras that see beyond the visible spectrum and they’re using them to detect missing wafers in KitKats what? So? I’m pretty disappointed when I miss a wafer. So it’s good that they’re doing this. But those cameras generate a gigabit per second of throughput. So they roll a camera technology out on a food and beverage production line without pulling cables everywhere, and probably that capacity we can’t Exactly. And then they’re using it for AGVs, so they’re autonomous guided vehicles to supply the stock in and out. They need 50 millisecond latency Again. So you’ve got a device that’s mobile, needs to remain connected, needs low latency in that connection. And this is where cellular technology comes in, because if you don’t meet that 50 millisecond target, then things stop. So that’s a great example.
Ian Ross:
24:11
There’s a port customer of ours in the UK that has decided to automate all their boom gates. So rather than having security guards at every single entry point in the port, they now brought it back to a single security operations center. All the boom gates are automated, but as the trucks of the containers enter and leave the port, they’re using cameras and computer vision to read the serial number of the containers, to create a real-time manifest of all the containers in the port. Wow, but those cameras are also surveying the containers and doing a damage assessment. So now they can determine if a container is all banged up when it leaves the port. Is it a result of treatment in the port or was it banged up when?
Michael van Rooyen:
24:47
it came in.
Ian Ross:
24:48
Wow. So some great examples there of just different industries. One of our clients has got a roadmap of new initiatives that will take them out to 2030. People don’t normally think that far out. No, they’re just looking at everything. It’s a little bit of crystal ball on science fiction towards the 2030 end, but they’re looking at remote control trucks moving to automated trucks and drones doing shore inspection and UAVs doing propeller inspections of vessels. Once you have the ability to access virtually unlimited, pervasive, dependable connectivity, you can start to exercise your imagination.
Michael van Rooyen:
25:20
I mean, just give me two customer examples that are phenomenal. I’ll be making sure one of my KitKats now check for the wafers Hopefully they’re from Brazil and that data analytics, that video analytics right, that’s what’s driving this right. It’s just impressive. I hope you enjoyed part one of my discussion with Ian Ross. Listen in next week for part two.
