By Kim Yoo-chul
LG-Ericsson plans to spend more cash to boost its business in Korea as it seeks to exploit a growing market for telecommunications-related equipment driven by the popularity of smartphones and other mobile Internet devices.
LG-Ericsson is a joint venture between Korea’s LG Electronics and Sweden’s Ericsson, and operates a research laboratory in Anyang, Gyeonggi Province. The company is involved in developing telecommunications equipment and network technology.
``We are planning the most significant investment, here, for further growth,’’ Mats H Olsson, president of LG-Ericsson China and North East Asia division, told reporters in a news conference in Seoul on the occasion of the company’s first anniversary.
Olsson, also a senior vice president of Ericsson, said Korea remains a top-priority market for the company as its tech-savvy users continue to be a demanding test bed that pushes telecommunications operators to adopt more advanced technology.
``The venture’s lab in Anyang will be expanded three times further in terms of overall size,’’ Olsson said, although declining to reveal specific financial figures.
He said that Ericsson has been closely communicating with Korean government officials since President Lee Myung-bak met company executives on his visit to Sweden two years ago.
That was also when Ericsson promised to invest around 2 trillion (about $1.86 billion) into its Korean business operations and research and development (R&D) activities.
The arrival of so-called fourth generation (4G) mobile Internet technologies, led by the Long Term Evolution (LTE) standard, will provide a crucial opportunity for LG-Ericsson, Olsson said.
The country’s three mobile carriers ― SK Telecom, KT and LG Uplus ― plan to have their LTE-based mobile services running in full force by mid-2012, and have been investing massively to create an ecosystem for the new mobile standard.
The carriers, which will begin their LTE deployment by the latter half of the year, say that the technology enables faster and more stable communication than rival mobile-WiMAX, which is critical in supporting the increasing number of data-centric devices such as smartphones and touch-screen tablet computers.
Ericsson is also aware of Samsung Electronics newfound aggressiveness in LTE-related technologies and business strategies, Olsson said.
Samsung is also rolling out LTE-based phones to enjoy a ``first-mover’’ advantage and this could help companies like LG-Ericsson sell more of its LTE network equipment.
``We got 618.5 billion won in revenue, last year, which was a cut from 1.1 trillion won revenue in 2008. But LG-Ericsson reaped 283 billion won only in the first quarter of this year, which is quite impressive,’’ said LG-Ericsson CEO Lee Jae-ryung.
``The other strategy for sustainable growth is having a balanced revenue structure between carrier network-related businesses and enterprise-related businesses. We will make half and half soon to beat the industry’s cyclical nature,’’ said the Korean executive.
LG-Ericsson has no big questions that the current 3G-based mobile technologies will be phased out from the market and the executives agreed WiMax will lose out to LTE as the dominant mobile broadband standard, globally, and the current tech will only be survived as a ``niche’’ technology.