Ericsson

Bulletin April, 2011

Volume 1 Issue 3
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INSIDE THIS ISSUE

News

Getting ‘passionate’ about HD voice

Badoo launches mobile payments In the UK with Ericsson
Ericsson scoops 2nd "Product Of the Year" award from Electronic Products China
Reviews

Operator opportunities in the internet of things

Success Stories

Nurturing Networks
Ericsson Reports
st
Ericsson reports 1 quarter results
Page 2 Ericsson Bulletin

Getting ‘passionate’ about HD voice

Apr 29, 2011
Voice quality never stood in the way of the mobile phone’s nearly universal adoption,
but when it improves, consumers want to talk more often – or for longer periods.

That’s the experience so far with Orange’s subscribers in 11 markets, explains Alex
Nourouzi, HD Voice Marketing Director with Orange Group marketing.

Nourouzi says that, in the year since Orange received the 2010 GSMA Best Mobile
Technology Breakthrough Award for its high-definition (HD) voice offering, users have been
talking on the phone longer and actively looking for HD compatibility when buying a new
device.

"It appears we are not the only ones who are passionate about voice quality – our surveys
show that our customers are too," Nourouzi says.

Nourouzi says that Orange hopes more operators will become passionate about voice quality
– the operator is now preparing to offer HD in all of the countries it serves. And it’s also
important to realize that true HD voice quality requires Adaptive Multi-Rate Wideband (AMR-
WB) codec, noise reduction and improved device acoustics. By combining those three
elements, operators will be able to deliver true HD voice services across international
markets to their customers, he explains.

Citing customer surveys, Nourouzi says: "Our customers are happy with HD voice. It reduces
background noise and the voice becomes recognizable. There’s a feeling of proximity. The
‘telephone voice’ disappears, and it relieves the fatigue associated with longer calls.

"The results seem to indicate that those who have HD-enabled phones are spending more
time on calls."

Nourouzi says that Orange’s surveys show that customer satisfaction increases when
consumers get a chance to use HD. "We find that, once people experience HD, they are
inclined to switch to a mobile phone that offers it," he says.

People have learned to cope with poor audio quality for so long that Nourouzi says there is
no "pent-up demand" for better sound. "But as soon as customers hear an HD demo, they
are impressed," he notes.

It’s a classic case of people not realizing what they want until they are presented with an
attractive option, he says. "It’s similar to the experience of seeing HD television for the first
time. When people go back to their own TV, they think it doesn’t look quite right."

HD voice requires activation of a new speech-coding algorithm in the phone so that the
frequency range of the audio signal is expanded. This greatly improves the voice quality. For
example, fricative consonants such as f’s and s’s become distinct.
Ericsson Bulletin Page 3
Support for the new AMR-WB speech-coding technology needs to be implemented in mobile
networks. Additionally, background noise filtering can be used to enhance the quality even
more.

Nourouzi says the growth of HD voice presents an opportunity for device manufacturers to
improve the acoustics of their phones. Doing so enhances the experience of HD voice.
"There has been some compromise in terms of the size of speakers as phones get smaller,
but it’s starting to come back on the agenda," he says.

"Orange is becoming more demanding about the quality of device acoustics."

Page 4 Ericsson Bulletin

Badoo launches mobile payments In the UK with

Ericsson
Apr 20, 2011
The social networking site Badoo is now offering premium services that users in the United
Kingdom can pay for using their mobiles. The payment solution is provided by Ericsson and
its IPX mobile payment service.

Badoo.com is a location-based service for people looking to chat, flirt and meet other people
nearby. The social network uses a “freemium” business model, where users can register,
create a profile and upload unlimited images at no cost. Premium features such as ‘Super
Powers’, gifts and featured profiles can be paid for via a range of methods including
credit/debit card, PayPal or SMS.

Badoo is available in over 180 countries, has more than 114 million registered users and is
growing rapidly. It is currently the 2nd largest Facebook Application (behind CityVille)

Bart Swanson, COO of Badoo, says: “Providing consumers with a mobile payment method
for premium services is vital for the success of any freemium based business, by making
purchases simple with SMS, we expect more of our members to be able to use and
appreciate premium services. Transactions will be charged to their mobile phone bill in the
case of postpaid clients, or deducted from their credit in the case of prepaid.

“IPX’s operator payment services in many countries are also likely to support Badoo as we
look to quickly launch the service in other markets,” said Swanson.

Johan Rosendahl, President, Ericsson IPX, says: “Our direct connections to operators
globally and unrivalled experience in the payments space allows companies like Badoo to
quickly and effortlessly implement secure, reliable mobile payment solutions.”

Ericsson Internet Payment Exchange (IPX) is a global mobile commerce and connectivity
enabler. As a carrier/operator payment broker, Ericsson provides delivery and charging,
using direct billing, premium SMS, Web and online mobile payment. Customers are more
than 1000 successful multinationals reaching consumers with high disposable incomes in
many countries across the globe.

Notes to editors
About Badoo.com
Badoo.com is the world’s largest Social Network for meeting new people locally. First
launched in Spain in 2006, it is now one of the leading social networks in France, Italy, Spain
and Latin America, with over 114 million registered users worldwide and growing.

Badoo has become one of the 130 most visited websites in the world by providing a fun,
useful location based service designed for people to meet other people.
Ericsson Bulletin Page 5

Ericsson scoops 2nd "Product Of the Year" award

from Electronic Products China
Apr 8, 2011

Ericsson Power Modules’ PKM5000D was launched in June 2010 as a flexible, 4:1 input voltage
DC/DC converter. Designed primarily to simplify base station design, the quarter brick, isolated
converter is also suited to a wide range of other applications including ICT, transportation, test
equipment and process control. It offers designers the opportunity to use the same product for
both 24V and 48V systems.

"The editors of Electronic Products China have chosen Ericsson's product, PKM5000D, as a
winner of 2010 Product of the Year Awards. Our editors evaluated hundreds of products launched
in 2010 in China on the basis of significant advancement in technology or functionality, meeting
the requirements of application trends, and ease of system development. The PKM5000D
demonstrated success in its category," said Scott Li, Vice Executive Editor-in-Chief of Electronic
Products China.

The PKM50000D’s industry-standard footprint also makes it easy for designers to upgrade
existing 24V or 48V boards by replacing 2:1 input DC/DC converters with the wide-input module.
No board re-design is necessary.

At the time of launch, the 120W PKM5000D offered 20 percent more power than similar products
in quarter brick format. It also raised the bar for half-load efficiency to 91.8 percent at 27V and 89
percent at 53V input voltage. High MTBF and a host of industry leading control, monitoring and
protection features complete the outstanding product specification.
More than 50 billion connected devices

Operator opportunities
in the internet of things
Getting closer to the vision of more than 50 billion connected devices means knowing
how to address the diverse connectivity needs of a massive number and variety of
devices, while simultaneously facilitating smooth and efficient network provisioning.

M igu e l Bl o c k s t r a n d, T om a s Hol m , L a r s - Ör ja n K l i ng,

Robe rt S ko g a n d Be r n d t Wa l l i n

Drivers for the Ericsson Device
Connection Platform
Estimates from different market ana-
lysts vary in terms of predicted figures –
but they all agree that data usage will at
least double every year until 2015, when
data will outweigh voice 30 times over.
These predictions are based on the con-
cept that anything that benefits from
being connected will be connected.
Consumers are increasingly getting
used to constantly connected devices,
behavior patterns are changing and the
value of connectivity for people, business
and society is becoming more evident.
More than 50 billion connected
devices is a vision where the conve-
nience brought to people’s lives through
the use of mobile networks will be con-
sidered normal and expected; a vast
number of M2M interactions will con-
stantly take place; and a myriad of
new services will raise dependency on
mobile networks and secure a massive
number of connections.
Devices will access mobile networks
directly or through gateways. They
will communicate with each other, be
part of an end-to-end M2M system, as
well as communicating with individu-
als and central control systems. People
will make use of numerous everyday
devices that benefit from M2M connec-
tivity at home, at work, on the move,
in remote locations and elsewhere. The
most obvious examples include: wash-
ing machines, coffee makers, car keys,
ticket machines, fridges, window sen-
sors, and utility meters. In addition,
mobile devices will be adapted to serve
as many other things; such as a connect-
ed wallet, a connection to medical ser-
vices, and an interactive location guide.
In the world of connected devices, we all
benefit from these applications.
In the world of more than 50 billion
connected devices there are fewer acci-
dents due to improved safety, our way
of life is more sustainable due to more
efficient use of resources, we are ener-
gy smart, and healthcare and education
are available for everyone.
Operators have started to realize
that their networks can provide value
beyond existing flat-rate plans. This will
come about by applying differentiated
connectivity packages tailored to meet
the needs of different devices and differ-
ent types of users.
Today’s networks are designed to

BOX A  Terms and abbreviations

3GPP 3rd Generation Partnership Project GSM Global System for Mobile OCS online charging system
ACL access control list Communications OSS Operational Support System
API Application Programming Interface HLR home location register PDC Personal Digital Cellular
APN Access Point Name HTTP Hypertext Transfer Protocol PDP Packet Data Protocol
AUC authentication center IETF Internet Engineering Task Force PLMN Public Land Mobile Network
CDR Call Detail Record IMSI International Mobile Subscriber QoS quality of service
CoAP Constrained Application Protocol Identity RADIUS Remote Authentication
CRM customer relationship management IP Internet Protocol Dial-In User Service
DAE Device Access Enabler IPTV IP TV SaaS software as a service
DNS Domain Name System IPv4 IP version 4 SGSN Serving GPRS Support Node
EDCP Ericsson Device Connection Platform IPv6 IP version 6 SIM subscriber identity module
GGSN Gateway GPRS Support Node M2M machine-to-machine SLA Service Level Agreement
Gn IP based interface between the SGSN MCC Mobile Country Code SMS Short Message Service
and other SGSNs and (internal) GGSNs MNC Mobile Network Code SMS-C Short Message Service Center
Gp IP-based interface between the MNO mobile network operator SSL Secure Sockets Layer
internal SGSN and external GGSNs MSC mobile switching center VPN virtual private network
Gr Interface between SGSNs and HLRs. MSIN Mobile Station Identification Number WAP Wireless Application Protocol
Messages going through this MVNO mobile virtual network operator WCDMA Wideband Code Division
interface use the MAP3 protocol NAT Network Address Translation Multiple Access

E r i c s s o n r e v i e w • 1 2011
deliver and enforce different connec-
tivity packages and types. However, to Figure 1  Device connectivity benefits people, business and society
fully cater for the demands created by
new types of devices and applications, People
innovative support systems will be Lifestyle
Health
required.
Convenience
The fundamental features of such Safety
systems include:
 upport for IP connectivity over private
s
Business Society
networks, as well as over the internet;
Productivity Sustainability
efficient provisioning for a large number Cost efficiency Safety
of subscriptions; Regulations Security
capabilities to create and enforce Assets Social cost
tailored subscriptions with respect
to QoS and charging models; and
mobile network operator and enterprise-
management portals.
To meet the market need for M2M sup-
port systems, Ericsson provides a SaaS
solution – Ericsson Device Connection
Platform (EDCP) – offering operators
and M2M enterprises an initial low-cost Technology
solution for connecting devices and
supporting applications, with the poten-
Openness and simplicity Cost of connectivity
tial to expand and adapt to the growing
needs of the market.

Ericsson Device Connection  olicy control and charging; and

p the device access enabler (DAE) grants
Platform Architecture management and provisioning of access to devices on the internet. The
Functional architecture subscriptions and devices. platform includes a service execution
Figure 3 shows how the EDCP solution Devices are connected to enterprise environment, which provides support
interfaces with enterprises as well as applications through the EDCP and functionality to enterprise applications
mobile operators, providing function- via the operator’s mobile network. For such as a subscribe/notify communica-
ality in three main areas: transparent IP connectivity, the GGSN tion scheme and location services.
device connectivity; supports private IP networks, while The policy and charging control block
handles the various settings for tailored
subscriptions, such as data capping and
Figure 2  Customization of connectivity charging levels. Enforcement of the
parameters takes place in the GGSN
and online charging systems (OCSs).
Revenue per bit Revenue per bit
The latter components also pre-rate and
sort charging information – Call Detail
Records (CDRs) – for each enterprise and
We want this Not this
operator. CDRs are then transferred to
the operator’s billing system according
to a desired control cycle.
Demand curve For operator and enterprise users,
dedicated portals provide access to the
platform for SLA, order and account
management components. The opera-
tor can, for example, create enterprise-
specific subscriptions, set up portals
and monitor SLA reports. Through the
self-service portal the enterprise can
purchase services, order SIM cards,
and monitor real-time/statistical data
Traffic Traffic on devices. The self-service portal also
includes provisioning of subscriptions
into the EDCP components as well

E r i c s s o n r e v i e w • 1 2011
More than 50 billion connected devices

as auto configuration of connec-

Figure 3  Ericsson Device Connection Platform architecture tivity parameters into the devices. All
devices supported by the EDCP are
Enterprise provisioned in the subscription data-
base.
Application Administration The OSS/diagnostics component pro-
vides operational and maintenance
functions, such as alarm handling, as
Service exposure EP service API EP self-service portal well as statistics for SLA reporting. A
CRM

OP portal
subset of status information and alarms

OP API
Specific
Common
functionality vertical SLA, order and account manager is provided to the operator’s network
functionality
operation center.
Provisioning of subscriptions
Service execution Not all of the more than 50 billion
EDCP solution

and devices
environment
connected devices will be equipped
with SIM cards. Figure 4 shows a prob-
Policy OCS
and mediation Billing able scenario in which EDCP interacts
charging with M2M devices via a gateway. The
Device access control gateway, which can be connected to
enabler Sub- OSS/ several different M2M devices, handles
scription diagnostics
data communication over the mobile net-
IP connection establishment and policy enforcement work. Communication protocols used
may be of any type. This example shows
HTTP being used between EDCP and the
Connection over mobile network MNO/MVNO gateway and the IETF-specified CoAP
between the gateway and devices.
Devices and gateways
Ericsson Device Connection Platform
deployment architecture
SaaS offered in a cloud style is a con-
venient and cost-effective way to con-
Figure 4  Ericsson Device Connection Platform interaction with M2M devices via a nect devices and applications. The cloud
gateway model features pay-as-you-grow char-
acteristics, rapid elasticity of system
resources and ease of use. In the M2M
arena there will be many different
devices. Some will send and receive
CoAP small amounts of data infrequently,
EDCP some will send small amounts often
and others will send and receive large
amounts of data often or rarely. What
HTTP M2M devices have in common, howev-
Gateway er, is that they could all benefit from the
PLMN convenience of re-using infrastructure
nodes for M2M services, such as provi-
sioning, connectivity, charging and pol-
icy. The EDCP will be deployed as a SaaS
to support this convenience and will
interface to several nodes, as shown in
Figure 5.
Below are short examples of how
M2M devices
EDCP will support multi-tenant servic-
M2M device es in areas such as provisioning; OSS;
charging; and accessing devices from
the internet.
To handle the use of the subscription
database (HLR), which is shared among
customers, for its own or MNO-owned
IMSI series, the EDCP will typically
have its own HLR/AUC and interface to

E r i c s s o n r e v i e w • 1 2011
SGSN via the Gn/Gp/Gr interface. The
different MNOs share the EDCP but use
their own radio and core networks for
sending messages to the platform.
When the M2M device is equipped
with an EDCP SIM card, 3GPP messag-
es such as Attach and Authentication
messages, which will be routed via the
IMSI number to the EDCP HLR and pro-
cessed according to standard 3GPP meth-
ods. When the M2M device issues a PDP
context activation message, that mes-
sage will be routed to the EDCP GGSN
via the MNO-controlled SGSN by a DNS
lookup of the Access Point Name (APN)
derived from the M2M device plus the
EDCP IMSI number.
For MNO-owned IMSI series, the rout-
ing to EDCP HLR will additionally be
based on Mobile Station Identification
Number MSIN (plus the ordinary usage
of MCC and MNC). Operators will need
to configure their networks to route
messages to EDCP HLR for specific rang-
es of IMSI.
Tailored subscriptions
The envisaged more than 50 billion
connected devices will differ greatly
in functionality, ranging from smart
meters to real-time video-surveillance
cameras. A smart meter, for example,
might report a kilobyte or two of data
every other week or so, in which case
accuracy is vital – as it determines costs
reflected on the subscriber’s bill – but
bandwidth and latency are unimport-
ant. On the other hand, a video-surveil-
lance camera constantly requires a lot of
bandwidth (uploads of between 120kbps
and 2MBps depending on the video qual-
ity, and even up to 10MBps for very high
quality, such as is required for telepres-
ence). Both smart meters and video-
surveillance cameras are, for the most
part, stationary, whereas other applica-
tions are mobile and require constant
connectivity. Vehicle-tracking devices,
would for the most part be on the move
and as such, a fleet management appli-
cation would require constant connec-
tivity. These examples show that both
devices and applications involved in
M2M have very different connectivity
requirements.
One size no longer fits all
The conclusion is that one size does not
fit all, which is illustrated in Figure 2.
Figure 5  Ericsson Device Connection Platform general deployment
Enterprise
DNS
M2M
(VPN)
DNS
EDCP
(Admin)
CRM
SMPP D Gn/Gp
SMS-C MSC
For an MNO to be competitive in the
world of more than 50 billion devic-
es a platform, such as EDCP, is need-
ed. EDCP provides the means to create
tailored subscriptions and offers the
possibility to fine-tune and tailor sub-
scriptions for specific devices and appli-
cations. Differentiated tariffs go hand in
hand with tailored subscriptions, add-
ing the requirement on such a platform
to provide the functionality to rate a
tailored subscription with a differenti-
ated tariff..
Tables 1-2 show some examples of
tailored subscriptions and correspond-
ing differentiated tariffs.
These examples show the multitude
of parameters that can be tuned when
designing tailored subscriptions. The
different subscription parameters are
controlled and enforced by the different
parts of the EDCP architecture.
The policy and charging control block
uses the 3GPP-standardized interfaces
Gx and Gy, based on the Diameter pro-
tocol, towards the GGSN that enforc-
es these policies. The Gy interface is
used to control usage (such as number
of bytes, number SMSs, and voice min-
utes), ensuring that a device stays with-
in the caps specified by the MNO and
allows or denies access depending on
time and location. The Gx interface and
M2M EP
(IP) (Admin)
Billing
EDCP Billing
Gr
SGSN
HLR profiles are responsible for policy
control parameters such as mobility
and bandwidth. The DAE controls SMS
wake-up and finally the SLA, order and
account manager controls the configu-
ration of the device.
The realization of the tailored sub-
scription is truly distributed on many
nodes.
Ericsson Device Connection
Platform web portals
EDCP provides one web portal to the
MNO and one to the enterprise, where
Ericsson manages the MNO accounts
and the MNO manages the enterprise
accounts. The EDCP web portal pro-
vides one single point of access to cre-
ate tailored subscriptions, realized by
different nodes, and ensures data con-
sistency.
The MNO web portal is multi-tenant
and offers the tools to design tailored
subscriptions and manage their enter-
prise portals. The enterprise web por-
tal supports the enterprise to manage
the M2M SIM cards and monitor device-
usage of the EDCP communication
services.
The objective of the EDCP web por-
tal is to be the M2M one-stop shop for
management of M2M communication
aspects provided by EDCP, tailored by
E r i c s s o n r e v i e w • 1 2011
More than 50 billion connected devices
A screen from the user’s view of the Ericsson Device Connection Platform
Figure 6 
demo portal
MNOs, and used by enterprises. The
portal, which is built on the concept of
self-service, is automated as far as possi-
ble, minimizes the need for help desks,
support and sales personnel thus low-
ering opex costs for MNOs and enter-
prises.
EDCP supports the operator in cre-
ating tailored subscriptions and dif-
ferentiated tariffs, managing enter-
prise customers and controlling SIM
cards, as well as facilitating follow-
up on agreed SLAs. With EDCP opera-
tors can allocate resources such as APN
and SIM cards to its enterprise custom-
ers in a straightforward manner. The
portal provides the operator with the
functionality to ensure that credit lim-
its and other thresholds, such as data
caps, are enforced. If a given threshold
is exceeded, the operator has the option
to increase charges or limit band-
width.
Figure 6 shows the demo version of
the EDCP portal. Listed on the left are
E r i c s s o n r e v i e w • 1 2011
tailored subscriptions created by the
operator. The panel on the right illus-
trates how a tailored subscription can
be defined.
The enterprise part of the portal will
include all the necessary tools to admin-
istrate, manage and monitor devic-
es that use EDCP services. Enterprise
functions such as ordering SIM cards,
connecting SIM cards to a tailored sub-
scription, device management and
viewing data or SMS consumption will
be supported.
EDCP also offers APIs that can be
used by the MNO or the enterprise. The
APIs provide portal functionality that
the MNO and enterprise may use to
integrate that functionality into their
platforms, systems or portals – instead
of or in combination with the EDCP web
portal.
Device Access Enablement
Mobile devices – in other words, any
device connected to a mobile network
– reside on a logical IP radio network
or APN, several of which can coexist in
the same radio network. An APN can be
connected to the public internet or a pri-
vate network. In both cases the connec-
tion point is the GGSN. When connect-
ed via the public internet, devices can
connect to any available server on the
internet, whereas devices on a private
network can only connect to servers on
that network.
There are a number of limitations
associated with connecting devices to
a private network. In most cases, com-
panies or enterprises implement secu-
rity measures on their private networks
to limit access to authorized users and
devices. Consequently, establishing a
connection between an operator and an
enterprise requires the exchange of net-
work topology knowledge and involves
tedious manual work for both parties.
The enterprise would require a VPN-
capable router, a RADIUS-server and
the competence to configure and man-
age them both. As a result, lead times
are often measured in weeks and the
number of APNs that can be provided is
restricted. Connecting devices via the
internet overcomes these challenges
and is a less expensive option – unless
security is a priority. Additionally, con-
necting devices via the internet implies
that they can be accessed from any oth-
er connected device – phones, comput-
ers, notebooks, tablets, cameras and so
on – via the DAE.
EDCP will connect and share devices
via the internet and shared intranets in
a secure way. It will ensure that it is pos-
sible to identify, address and communi-
cate with devices as if they were attached
to the internet via a fully-fledged serv-
er position in a manner that is trans-
parent to the device and the enterprise
server. Consequently, EDCP will add
value to the existing M2M domain with-
out requiring any change or update on
the device side or the enterprise server.
Because the number of connected
devices will be enormous, it will not be
possible to assign a unique public IPv4
address to each. While this issue will
eventually be solved when IPv6 is fully
deployed across networks, servers and
devices, an interim solution is needed to
uniquely identify connected devices. An
APN is usually connected to the internet
via an operator NAT. Each device will
have a private IP address that is unique
on its APN, but not globally. Such an
address has no meaning on the internet.
When a device on the APN connects to
a server on the internet, the NAT trans-
lates the source IP address to that of the
NAT itself and temporarily assigns a
source port on the internet to which
the contacted server can reply.
NAT deployment works for device-
initiated connections. However, it does
not work for connections initiated on
an internet server. If devices do not have
unique IP addresses, there is no way for
the servers to initiate a connection to
them.
EDCP’s access-enablement function-
ality solves the addressing issue using
standard internet mechanisms – by
using the internet host name. Devices
connected to the EDCP will automati-
cally be assigned a hostname that con-
tains the device IMSI. The host name
will be published together with the IP
address of the NAT on the DNS. By using
a standard domain name lookup, a serv-
er application can retrieve the IP address
of the NAT and use it to initiate a connec-
tion to the device. Identifying the specif-
ic device to which a connection should
be forwarded will be resolved using nov-
el mechanisms for which patents are
currently pending.
DNS and hostname publishing,
together with novel forwarding mech-
anisms, will remove the demand for
tedious device and application pro-
gramming to support network-initiat-
ed access to devices.
tivity models appropriate for different
business scenarios:
single enterprise to multiple device;
multiple enterprise to single service; and
multiple enterprise to multiple device.
The DAE will support IPv4 and IPv6 on
both the device and enterprise side, as
well as supporting any transition meth-
od between the two.
Ericsson Device Connection
Platform application support
M2M devices will, in many cases, pro-
duce data that an M2M application
needs to interpret and take action upon.
For example, an M2M device sends to
indicate that the current temperature
is 47C. An M2M application receives
the information, interprets it and takes
some action. Depending on the nature
of the data and of the corresponding
action, the data exchange between
device and application can occur syn-
chronously, which requires a real-time
connection, or asynchronously. In many
cases, M2M devices will produce data
that can be consumed by the applica-
tion at a later point in time. For exam-
ple, the data supplied by an electrici-
ty meter to a billing application can be
communicated at any time, the only
Table 1: Smart meter subscription
APN type: Private
Mobility: No
Roaming: No
Bandwidth: 10kbps
requirement being that the informa-
tion is accurate. Communication during
off-peak hours is cost-effective in such
cases. On the other hand, it is vital that –
in the event of an accident – data be sent
from a vehicle to an emergency-services
application immediately. Asynchronous
communication requires a mechanism
for interim data storage. A later release
of EDCP will have a solution for secure
asynchronous device-application com-
munication.
Today, M2M applications are typically
hosted and executed on the premises of
an enterprise. Alternatively, M2M appli-
cations can be deployed and executed
in the cloud. Cloud providers, includ-
ing some mobile operators as well as
public providers, offer execution plat-
forms suitable for many M2M applica-
tion types. In a later release, EDCP will
have an M2M execution platform that
can be deployed in private, hybrid or
public clouds. This will provide the
mobile operator with the ability to sup-
port EDCP initial offerings such as tai-
lored subscriptions and enhanced provi-
sioning, as well as an execution environ-
ment for M2M applications. Enterprise
M2M applications can benefit from well-
known cloud characteristics, such

By supporting different authenti- Usage: 5kb/month

cation mechanisms, the EDCP access Tariff 1: 00.00-05.00, Monday-Friday, X1 cent/kb
enabler can provide device and server Tariff 2: 00.00-05.00, Saturday and Sunday, Y1 cent/kb
authentication. For devices, single sign-
Tariff 3: 05.01-23.59, every day, Z1 cent/kb
on mobile access network authentica-
tion procedures are used, which means Automatic device configuration: No

that all existing devices using a mobile SMS wake-up: No

access network can transparently ben-
efit from EDCP. For server-side applica- Table 2: Video surveillance
tion authentication Access control lists APN type: DAE
(ACLs) or SSL-based authentication is Mobility: No
used.
Roaming: No
Additionally, EDCP access enable-
Bandwidth: 5MB/s
ment offloads the installation and
execution of security packages on the Usage: 350 GB/week
device. When server-side applications Tariff 1: UL< 500kbps , X2 cent/MB
require a secure connection, the DAE Tariff 2: 500 <UL <5MB/s, Y2 cent/MB
implements the security requirements
Automatic device configuration: Yes
on the server side.
SMS wake-up: No
The DAE will provide several connec-

E r i c s s o n r e v i e w • 1 2011
More than 50 billion connected devices
as its support for a pay-as-you-grow
model and rapid elasticity of system
resources.
EDCP will use the SIM card, a mobile
operator asset, to ensure that data pack-
ets from enterprise-owned M2M devices
will be routed to the correct instance of
the M2M execution platform, executing
corresponding enterprise M2M appli-
cations.
The M2M execution platform can also
be deployed outside EDCP in a public
cloud environment, where EDCP will
use a secure VPN connection to inter-
face with the cloud provider. The rout-
ing principle from device to applica-
tion will still be the same as when the
cloud platform resides inside the EDCP
domain.
Conclusion
Ericsson Device Connection Platform is
an important step towards realizing the
vision of more than 50 billion connected
devices. It provides tools for actors, such
as operators and enterprises, to handle
provisioning in a self-service way. It also
delivers methods to tailor subscriptions
to meet the varied connectivity require-
ments of the massive number and vari-
ety of connected M2M devices. The
device access enabler function in EDCP
solves the issue with find and connect
in a world of NATs and firewalls, and
at the same time shields M2M devices
from unsolicited usage. EDCP, offered as
SaaS, is a way to re-use nodes and func-
tions between several business domains
and different mobile operators.
Solving connectivity challenges is the
natural first step towards achieving the
vision. The next step will be to offer solu-
tions for application support – in other
words, to develop, install and execute
M2M applications in a more cost-effec-
tive and convenient way.
E r i c s s o n r e v i e w • 1 2011
Robert Skog
is an expert in the
service layer at Ericsson’s
Business Unit Multimedia.
After completing an M.Sc.
in electrical engineering from the Royal
Institute of Technology (KTH), in
Sweden, he joined Ericsson’s two-year
trainee program for system engineers.
Since then, he has worked mainly in the
service layer area with everything from
the first WAP solutions to today’s M2M
solutions. In 2005, he was awarded the
prestigious Ericsson Inventor of the
Year Award.
Berndt Wallin
joined Ericsson in 1986
and is an expert in media-
handling architectures.
Apart from a two-year
period of mobile-phone development at
Research Triangle Park, North Carolina,
US, he has worked for the last 15 years
with speech- and media-processing
products such as transcoders, echo
cancellers, media gateways, messaging
and TV systems. For the past year he has
led the Ericsson Device Connection
Platform development program. He
holds an M.Sc. in electrical engineering
from KTH, Sweden.
Tomas Holm
is a system manager
and has worked with IMS
since he joined Ericsson in
2005. During the past
year he has been responsible for cross-
area system issues in Ericsson Device
Connection Platform. He has vast
experience in IT software develop-
ment, having held various roles at
several companies and holds an M.Sc.
in computer science and engineering
from KTH, Sweden.
Reference
ITU Internet Reports 2005: The Internet of Things. 2005, 7th edition,
http://www.itu.int/pub/S-POL-IR.IT-2005/e
Miguel Blockstrand
is a senior product man-
ager for connected devic-
es and industries. He has
20 years’ experience in
telecoms and is currently responsible
for the connected devices portfolio of-
fering within Business Unit Networks.
Most recently, he has been responsible
for the Mobile TV and IPTV network in-
frastructure portfolios within Ericsson.
Prior to his current engagements in the
TV area, he held several senior
management positions within R&D,
Marketing and Business Development.
He was involved in the first deploy-
ments of GSM, the Japanese PDC
mobile system and WCDMA. He holds
an M.Sc. in mechanical engineering
from Chalmers University of
Technology, Sweden.
Lars-Örjan Kling
is an appointed expert
in IP technology at
Ericsson’s Business Unit
Networks, currently
engaged in the 50 Billion Connected
Devices R&D program with a focus on
technology strategies. He joined
Ericsson in 1980 to work as a computer
architect. Following this, he was active
in many areas including multi-process-
ing, high availability, mathematical
specification methods and neural
computing. In 1997, he entered the
datacom area where he had the role of
chief architect for router data plane
design. Later engagements included
areas such as deep inspection, media
streaming and internet-caching tech-
niques. He holds an M.Sc. in electrical
engineering from KTH, Sweden.
 success story

Zitius, Sweden
Fiberstaden, Sweden

Nurturing
networks
How an audit assessment offers insight into the
capacity and stability of network performance
Health
check
Customer Profile
Zitius is Sweden’s leading fiber-to-the-
home open access network operator. As
a neutral service broker, Zitius provides
networks to the utilities, municipalities
and property owner markets across its
country-wide customer base. Zitius assists
in every step of the broadband process,
from deployment to ongoing operation and
development of service.
Website: www.zitius.com
Founded in 2006, Fiberstaden AB is
owned by the municipality of Hudiksvall
and is responsible for the operations of
Hudiksvall City Network, which connects
60 cities and small villages in an open
access broadband network. Fiberstaden
actively works to extend the network and
increase the selection of user services.
Website: www.fiberstaden.se
Recognizing a growing demand
to improve the Hudiksvall open
access broadband network, Zitius
and Fiberstaden decided to use
an independent party to audit the
current network. Together, they
chose Ericsson to carry out the
assessment.
During earlier engagements Zitius,
Fiberstaden and Ericsson have
worked together to provide the
municipality of Hudiksvall with
an advanced fiber broadband
solution, including DSL to remote
residential subscribers. The DSL
network solution offers an innovative
communications environment
for residents, businesses and
enterprises in the region. Currently,
Ericsson is involved in a managed
services engagement with Zitius
and Fiberstaden.
For this project, Ericsson acted
as an independent and unbiased
auditor, delivering results to all three
companies through the Broadband
Access Network Optimization
Service. Ola Friis, CTO, Zitius
explains why Ericsson was chosen
to evaluate the current network’s
health: “Our experience of working
with Ericsson proved that they had
the technological know-how and
service offering that we needed.
They were the perfect choice to
perform an independent audit
of the network.”
Analysis
The audit was performed from
a central data repository, using
the software-based Copper Plant
Manager (CPM) tool from Ericsson.
The tool enabled cost-efficient data
gathering prior to the data analysis,
which was essential to the success
and final outcome of the task.
The network audit provided insight
into the entire performance of the
Hudiksvall network. It outlined the
current state of the DSL network
and categorized the lines according
to whether they were faulty,
unstable, highly unstable or stable.
The DSL part of the line in particular
was monitored and key parameters
were evaluated to assess capacity
and stability.
A detailed inventory of all faulty
lines enabled Ericsson to suggest a
list of coordinated fault prevention
activities that offer the potential
to lower opex. This inventory
knowledge can also enable
operators to correct issues before
potential complaints, resulting in
increased customer loyalty.
Magnus Larsson, CEO, Fiberstaden
explains why the results of the
audit were a success: “The detailed
audit has been a really useful tool.
We’ve been able to differentiate
Ericsson proved
that they had the
technological know-
how and service
offering that we
needed. They were
the perfect choice
to perform an
independent
audit of the
network.”
Ola Friis,
CTO, Zitius

between issues that could be solved
or mitigated using pure line profile
configuration updates and those
that would actually require
truck rolls.”
After the audit was performed,
recommendations were given
on how to improve network
performance and service capacity
and stability. Adam Wiå, Product
Manager, Design and Optimization,
Ericsson says that this sort of
network audit works like a health
check: “Based on the outcome,
an operator can make strategic
decisions on how to act on their
current network and how to invest
in future rollouts.”
Thinking ahead
The Broadband Network Audit
extracted and logged performance
data across the DSL nodes in
the network without the use of
dedicated test probes. The way that
the lines were categorized in the
audit report provided clear guidance
on how to approach the different
network issues.
Ericsson AB
SE-164 80 Stockholm
Telephone: +46 10 719 0000
Email: asq.us@ericsson.com
www.ericsson.com
We’ve been able to differentiate
between issues that could be solved
or mitigated using pure
line profile configuration
updates and those that
would actually require
truck rolls.”
Magnus Larsson,
CEO, Fiberstaden
The CPM tool proved to be useful
for service delivery, enabling remote
collection of data from the DSL overview
network. This was the first time
Customer:
the Broadband Access Audit was
Zitius, Sweden
delivered using the CPM tool for the
Fiberstaden, Sweden
DSL network.
Nicklas Björn, Account Manager Customer Objective
Broadband, Ericsson says: “We > Gain insight into network
always want to improve the standard performance
of our service offering and this > Provide a better service
particular project gave us the first
> Improve network capacity and
chance to look at and implement stability
the Broadband Access Network
Optimization service, which is
great in terms of future product Ericsson Solution
development.” > Broadband Access Network
Optimization Service
Customer Benefits
> Provides snapshot of network
performance
> Clear guidance on network issues
> Network improvement
possibilities
> Lower opex
To find out more about this article contact
Nicklas Björn
Email: nicklas.bjorn@ericsson.com
213 31-FGC 101 0709 Uen A
© Ericsson AB 2011
 FIRST QUARTER REPORT
April 27, 2011

ERICSSON REPORTS FIRST

QUARTER RESULTS
First quarter Fourth quarter
1) 2)
SEK b. 2011 2010 Change 20102) Change
Net sales 53.0 45.1 17% 62.8 -16%
Gross margin 38.5% 38.5% - 36.6% -
EBITA margin excl JVs 14.1% 12.8% - 15.3% -
Operating income excl JVs 6.3 4.5 39% 8.4 -25%
Operating margin excl JVs 11.9% 10.1% - 13.4% -
Ericsson’s share in earnings in JVs -0.5 -0.3 - -0.3 -
Income after financial items 5.8 4.1 41% 7.8 -26%
Net income 4.1 1.3 220% 4.4 -7%
EPS diluted, SEK 1.27 0.39 - 1.34 -
EPS diluted, excl. amortizations and write-
downs of acquired intangibles, SEK 1.52 0.87 75% 1.65 -8%
Adjusted operating cash flow3) -2.1 3.0 - 16.2 -
Cash flow from operations -2.9 2.3 - 15.2 -
1)
All numbers for 2011 are stated incl. restructuring charges
2)
All numbers for 2010, excl. EPS, Net income and Cash flow from operations, are stated excl. restructuring charges. For details see section
on restructuring under Financial Statements and Additional Information
3)
Cash flow from operations excl. restructuring cash outlays that have been provided for

“Group sales in the quarter increased by 17% year-over-year driven by continued strong demand for mobile
broadband and especially for the multi-standard radio base station RBS 6000,” says Hans Vestberg, President
and CEO of Ericsson (NASDAQ:ERIC). “Sales for comparable units, adjusted for currency and hedging, increased
25% year-over-year. Net income improved from SEK 1.3 b to SEK 4.1 b. mainly related to increased profitability in
segment Networks. Cash flow in the quarter amounted to SEK -2.9 (2.3) b. impacted by higher level of work in
progress in the regions and continued ramp up of production.
The increase in Group sales was driven by segment Networks where revenues grew 35% year-over-year with an
EBITA margin of 20%. The strong demand for mobile broadband resulted in five out of ten regions showing growth
year-over-year. Countries with especially strong growth were the US, India, Japan, Korea and Russia. China had
continued good momentum for 2G.
Segment Global Services sales decreased -4% year-over-year primarily due to currency exchange rate effects.
In local currencies Professional Services grew 3%. EBITA margin decreased to 7% in the quarter mainly due to
lower profitability in Network Rollout. Managed Services was flat compared to the first quarter 2010, but grew 11%
year-over-year in local currencies driven by a number of new smaller contracts. Segment Multimedia sales were flat
year-over-year while EBITA margin dropped to -7%, mainly due to product mix. Our joint ventures showed mixed
performance. Sony Ericsson contributed with a profit before tax of SEK 0.1 b. while ST-Ericsson’s loss amounted
to SEK -0.6 b.
Sales in the first quarter were not impacted by the devastating earthquake and tsunami in Japan. Our global supply
chain of components is partly dependent on Japan and we estimate delays in delivery of certain products. We have
taken a number of actions to mitigate the effects to secure that we limit the impact on our customers. These activities
include finding and integrating alternative components in our products as well as increasing volumes with second
source suppliers. Effects will also depend on Japan’s overall recovery but our best estimate is that we will be able
to deliver the majority of these volumes before end of third quarter 2011.
During 2010 we continued to gain market shares in 3G and at least maintained our market shares in 4G/LTE of
more than 50%. While GSM will continue to exist for many years, we will see the bulk of investments shifting to
3G/WCDMA and 4G/LTE. In services we increased the market share and we continue to be the leading provider
in the industry,” concludes Hans Vestberg.

1
FINANCIAL HIGHLIGHTS
Income statement and cash flow
Sales in the quarter amounted to SEK 53.0 (45.1) b., up 17% year-over-year and down -16% sequentially.
Sales for comparable units, adjusted for currency exchange rate effects and hedging, increased 25% year-over-year.

A one-off revenue from the sale of patents of SEK 0.3 b. positively impacted sales and margins in the first quarter.
Reported numbers for the first quarter 2010 exclude restructuring charges of SEK 2.2 b., while reported numbers
for the first quarter 2011 include restructuring charges of SEK 0.4 b.

Gross margin in the quarter was flat year-over-year at 38.5% (38.5%), and
was up from 36.6% sequentially. The business mix from second half of SALES BY QUARTER
2010, with expansions and upgrades, has prevailed in the quarter. This, in 2010 AND 2011 (SEK B)
combination with strong sales in segment Networks and continued 70
efficiency gains, have impacted gross margin positively.

3G volumes in India were high, which affected margins negatively. The 60

negative margin effects from network modernization projects, which we

indicated in the fourth quarter 2010, have partly materialized in the quarter. 50

R&D expenses amounted to SEK 8.0 (7.3) b., an increase by 10% year- 40
over-year. The increase is a result of the planned higher investments in
radio, such as TD-LTE and IP as well as the acquired LG-Ericsson
30
operations. Selling and general administrative expenses (SG&A) amounted
to SEK 6.4 (5.9) b., an increase by 10% year-over-year, representing 12%
20
of sales. This is mainly a result of the acquired LG-Ericsson operations and
a growing number of LTE trials. Total operating expenses amounted to
10
SEK 14.4 (13.1) b.

Other operating income and expenses were flat, SEK 0.3 (0.3) b. in the 0
quarter. Q1 Q2 Q3 Q4 Q1

2010 2011
Operating income, excluding joint ventures, increased 39% to
SEK 6.3 (4.5) b. in the quarter. Operating margin improved to 11.9% (10.1%) year-over-year mainly due to the
volume increase.

Ericsson’s share in earnings of joint ventures, before tax, amounted to SEK -0.5 (-0.3) b., compared to SEK -0.3 b.
in the fourth quarter 2010. Sony Ericsson contributed with a profit of SEK 0.1 b. while ST-Ericsson’s loss amounted
to SEK -0.6 b.

Financial net amounted to SEK 0.0 (-0.2) b. in the quarter. Financial net improved slightly sequentially from
SEK -0.3 b. due to higher short-term interest rates and a high cash position.

Net income amounted to SEK 4.1 (1.3) b. The improvements are mainly a result of increased sales volumes
and improved profitability in Networks.

Earnings per share were SEK 1.27 (0.39) in the quarter. Earnings per share excluding amortizations and write-
downs of acquired intangibles were SEK 1.52 (0.87) in the first quarter.

Adjusted operating cash flow was SEK -2.1 (3.0) b. in the quarter. Cash flow from operations amounted to
SEK -2.9 (2.3) b. mainly due to higher inventories and a payment of SEK 1.1 (0.9) b. to pension funds. Cash outlays
for restructuring amounted to SEK 0.8 (0.7) b. in the quarter. Cash outlays of SEK 2.5 b. remain to be made.

Ericsson First Quarter Report 2011 2

Balance sheet and other performance indicators
Mar 31 Dec 31 Sep 30 June 30 Mar 31
SEK b. 2011 2010 2010 2010 2010
Net cash 48.2 51.3 35.7 25.8 38.5
Interest-bearing liabilities and post-employment benefits 34.8 35.9 40.4 41.8 39.3
Trade receivables 60.6 61.1 57.8 69.4 62.7
Days sales outstanding 101 88 109 133 117
Inventory 32.1 29.9 30.3 29.4 24.1
Of which regional inventory 21.1 18.7 19.1 18.3 14.0
Inventory days 87 74 82 81 75
Payable days 70 62 62 61 59
Customer financing, net 4.2 4.4 3.5 3.1 2.9
Return on capital employed 13% 10% 8% 6% 5%
Equity ratio 53% 52% 52% 51% 53%

Trade receivables decreased sequentially by SEK 0.5 b. to SEK 60.6 (61.1) b. due to the strong SEK and lower
seasonal decline in sales. Days sales outstanding (DSO) decreased from 117 to 101 days year-over-year as a result
of higher sales and strong collections.

Inventory increased sequentially by SEK 2.2 b. to SEK 32.1 (29.9) b. The higher inventory level year-over-year is
reflecting higher level of work in progress in the regions and continued ramp up of production. Inventory turnover
days increased from 74 to 87 days.

Goodwill decreased SEK 1.4 b. to SEK 25.8 (27.2) b. due to a stronger SEK.

Cash, cash equivalents and short-term investments amounted to SEK 83.0 (87.2) b. The net cash position
decreased sequentially by SEK 3.1 b. to SEK 48.2 (51.3) b., mainly due to negative cash flow.

During the quarter, approximately SEK 1.1 b. of provisions were utilized, of which SEK 0.8 b. related to restructuring.
Additions of SEK 1.3 b. were made, of which SEK 0.1 b. related to restructuring. Reversals of SEK 0.1 b. were
made. Provisions will fluctuate over time depending on business mix, market mix as well as technology shifts.

Total number of employees at the end of the quarter amounted to approximately 91,500 (86,500), an increase by
1,200 from December 31, 2010. In the quarter, some 300 individuals joined Ericsson through acquisitions and
approximately 1,000 related to our services business, mainly in Brazil, India and China. Main reductions were
made in countries in Western Europe.

Ericsson First Quarter Report 2011 3

EDITOR’S NOTE
To read the complete report with tables, please go to:
www.ericsson.com/investors/financial_reports/2011/3month11-en.pdf

Ericsson invites media, investors and analysts to a press conference at the Ericsson Studio, Grönlandsgången 4,
Stockholm, at 09.00 (CET), April 27, 2011. An analysts, investors and media conference call will begin at 14.00
(CET).

Live webcast of the press conference and conference call as well as supporting slides will be available at
www.ericsson.com/press and www.ericsson.com/investors

Video material will be published during the day on www.ericsson.com/broadcast_room

FOR FURTHER INFORMATION, PLEASE CONTACT

Henry Sténson, Senior Vice President, Communications
Phone: +46 10 719 4044
E-mail: investor.relations@ericsson.com or media.relations@ericsson.com

Investors
Åse Lindskog, Vice President,
Head of Industry and Investor Relations
Phone: +46 10 719 9725, +46 730 244 872
E-mail: investor.relations@ericsson.com
Media
Ola Rembe, Vice President,
Head of Corporate Public and Media Relations
Phone: +46 10 719 9727, +46 730 244 873
E-mail: media.relations@ericsson.com

Susanne Andersson, Director, Corporate Public & Media Relations

Investor Relations Phone: +46 10 719 69 92
Phone: +46 10 719 4631 E-mail: media.relations@ericsson.com
E-mail: investor.relations@ericsson.com
Telefonaktiebolaget LM Ericsson (publ)
Åsa Konnbjer, Director, Org. number: 556016-0680
Investor Relations Torshamnsgatan 23
Phone: +46 10 713 3928 SE-164 83 Stockholm
E-mail: investor.relations@ericsson.com Phone: +46 10 719 0000
www.ericsson.com
Stefan Jelvin, Director,
Investor Relations
Phone: +46 10 714 2039
E-mail: investor.relations@ericsson.com

Ericsson First Quarter Report 2011 12