Transcription
Tell me about the China exposure you have. You have supply chain there. You have consumer, and competition is really what you have from China. What did you make of the relationship between US and China that we just saw overnight?
Thanks for having me. That's a great question to ask. Very hard to answer, actually.
We like to do that in journalism. No. I know. I know. But I I I think there is you know, China is is started out as I often look at the old telecom movie from China. Right? It actually started out as being a prioritized sector in China. So they had almost a 100 vendors if you go back thirty years. They consolidated into really two that became fierce competitors in in the over a decade. Huawei being one, q one. Huawei, of course, being the biggest. And and and they started out being, of course, low cost and and fairly simple. Today, they're, of course, a phenomenal competitor, and it's the one that we benchmark ourselves with and said that's the one we need to beat, actually. We need to win on technology. We need to win on cost position. So for us, the competition with China is front and center, and has been. And I I do believe that for for the rest of the world to compete with China, you need to lead on technology.
But you've been outspoken in the past, sort of pushing against this idea of of sort of a focus on your own country and banning in Sweden. They pushed out Chinese competition, and you actually, at the time, said that's the wrong thing to do. Yeah. In The US, that is your your key markets now, The US, the Japan, there are other nations. How do you think about them China being excluded, and should they be?
You know, the way to think about about China is is actually in the it's multipronged. So if you take telecom again, it's it's a scale game. They have scale in their domestic market. That's a market you need to be in. But more importantly, what was also clear is that given the development in China, economically and and use case wise, you saw data consumption grow much faster in China than anywhere else in the world. That led them to lead on or or demanding certain technologies ahead of the rest of the world. So unless you're on the same development curve as they are in China, we're not gonna be able to bring those solutions globally. So if we take in our case, have what what's called massive MIMO. Basically, it's a it's a way to increase capacity in the radio network. There, they needed that earlier than in the rest of the world. And therefore, if you're not there when that happens, you don't develop the technologies at the same pace as they do in China. So I think it's a much more interdependent world. You need to think of the world as being interdependent.
And you're dependent on geopolitics, tariffs, inflationary pressures, the Strait Of Vormuz again front and center today. How are you managing that?
You know, we we actually took a decision a number of years ago now, to say that we have three home markets. So that was recognizing The US because it's a it's a front runner market. Big India, in those days, was big. Today, it's starting also to be front runner on technology. Japan. Japan is very big in telecom and also an early adopter of telecom. So we said, that's markets we need to win in to make sure that we combat the scale of China. So we did that. Then we said we need a flexible supply chain in order to manage Yeah. Any disturbances. So we built a factory here in The US.
How big is your manufacturing now here in The US?
We manufacture pretty I mean, a large portion of what's supplied to The US is manufactured here in The US. So we built that in '20 we commissioned it about 2020. So we're we were ahead of the, really, supply constraints in that sense and the tariff issues. So we've been able to use that manufacturing footprint, r and d footprint to actually manage a bit of the geopolitical exposure.
Now we look at the markets today and extraordinary ramp higher on the back of AI. AI is the excitement in your area as well. Look. You've got competition with Nokia who has got a strong relation with NVIDIA, and they've gone big into data center briefly. How are you thinking about the AI opportunity?
We think of the AI opportunity as a massive opportunity for us for the simple reason that AI will ultimately move out to the physical world, call it industrial AI, physical AI. And that's gonna require inference at the edge of the network to manage the latency requirements, etcetera. And then connectivity will be needed. So we will start to enter a world where everything has to be connected. So when everything is connected, you can't connect them with wires. It just simply doesn't work. You're gonna need the terrestrial cellular network to provide the the backbone to scale AI. So I think of AI, yes, it's it's gonna fundamentally change the economy. It's gonna be a driver of productivity. It's hugely positive. Yeah. And for us, it will be a benefit because we will see new type of traffic coming in the network.