Network energy performance is an increasingly prevalent issue for mobile network operators (MNOs) in North America. If 5G is deployed in the same way as previous generations, energy consumption of mobile networks would increase dramatically. This is unsustainable in terms of cost as well as environmental impact. In this digital interview with Kevin Zvokel, the Head of Networks at Ericsson North America, we delve further into what factors are driving this issue, address some of the key challenges faced by mobile network operators and gain insight into Ericsson’s proposed solutions to reducing network energy use.
Kevin Gray:
All right. Hello. My name is Kevin Gray, Publisher of Fierce Wireless, and I'm here today with another Kevin, Kevin Zvokel, the Head of Networks at Ericsson North America. Kevin, thank you so much for joining us here today.
Kevin Zvokel:
Thank you, Kevin. Good to be here.
Kevin Gray:
Great. Okay. So first off here, I just love to set the stage, Head of Networks for Ericsson North America seems like a big all-encompassing title. Can you tell us a little more about your role and additionally your pathway to getting there at Ericsson?
Kevin Zvokel:
Yeah. So again, my name's Kevin Zvokel. I head up the networks organization in North America. And so that encompasses all the Ericsson radio portfolio with transport and all of the services in North America. So network design, network build, and network operations. And so I'm 25 years and a couple weeks with Ericsson, 32 years in the telecom industry. And I really started off as a field technician. And so I started off in the field building radio networks and I've been blessed to be able to work my way up through a great company like Ericsson.
Kevin Gray:
That's awesome. I wonder how often that actually happens out there in our business, but really cool background. Okay. So next up, for today, I want to focus on network energy performance. Okay? So it seems like this is becoming a top issue for mobile network operators in North America as of late. And given your role, I'm sure you're hearing a lot about this from some of the network operators that you work with in North America, right? So can you explain just a little bit more as to what the key drivers are for this issue?
Kevin Zvokel:
Yeah, so I mean, energy performance is a big focus. It's not only for business. Typically, when we hear about topics like this, it's very business, but it's also sustainability. The good news in this topic is that all the tier one operators in North America have already made their commitments to be carbon neutral over the next 10 to 15 years, depending on which operator you're talking to.
I think the thing to keep in mind is, about 90% of all the emissions from the network operators come from the actual power driven to run the networks. And so to achieve carbon neutral, it's important for these network operators to manage the increase in power consumption. As we all know, the increase in traffic is driving these networks harder and harder. So they need to balance that and they also need to purchase renewable power. If you look at their OPEX budget, about 40% of their OPEX budget's made up of the power consumption. And so it's very much financially driven as we drive more and more traffic in the network.
And if that's not enough, I mean, investors in a lot of the network operators, BlackRock, for example, they've come out and said publicly that they're going to hold companies accountable for their progress in this topic. And so I think it's super critical that we all focus on, and I'm glad to hear that we have commitment from the tier one operators. And Ericsson's here to support them.
Kevin Gray:
So that speaks to some of the reasons why this is becoming a top issue and the opportunity for it, right? Now, what are some of the key challenges that are faced by mobile network operators that are pursuing these initiatives to improve their network energy performance?
Kevin Zvokel:
Yeah. There's competing priorities, I would say in the network operators. If you think about, network operators have lots of challenges and they're driven by consumers and, of course, their brand recognition for network performance. And they lack sometimes the horizontal energy policy across their organization that will help them make key decisions in all aspects of the network. When you think about the design equipment choices, when you think about how do you operate your network and make sure you balance that in the right way. And then there's a piece of that that comes on the OEMs, like Ericsson. We need to develop technology that helps them to balance and maximize power efficiency with network performance. And of course, overall it's OPEX and CAPEX. Where do you make investments to drive coverage and capacity in the network and still balance energy consumption? So those choices are very difficult and sometimes competing within the network environment.
Kevin Gray:
Okay, great. And let's get to Ericsson's involvement in all of this, in the next question. Right? What is Ericsson doing specifically to help out all these mobile network operators that are trying to overcome all the issues you just talked about?
Kevin Zvokel:
Yeah. So Ericsson's committed to providing solutions and through increased investments in our R&D, we're building solutions that will break the trajectory of energy consumption. So as data increases, we want to bend that energy curve and to see energy consumption go down, rather than follow the trend up. And so we've developed a holistic approach to secure network energy performance, and we see that in four different distinct areas of our portfolio. So one is around hardware modernization. And so building our hardware with the latest Ericsson Silicon.
Two is intelligent energy savings through software features. And so building intelligence into our software to make networks smarter. Then we look at our services. So number three is really about building networks with precision. So making sure we build cell sites in the right area with the right solution for the right consumers in mind. And four is using artificial intelligence and machining learning to operate networks to make it as efficient as possible so we can avoid truck rolls and to do things smarter.
And as a proof point, we're launching seven new brand solutions and it's led by our dual-band product. And that dual-band product already has proven to be 25% less power needed to support the same capacity. So we're seeing great efficiencies. And we also see that utilizing 5G, our private network portfolio, other industries are leveraging 5G technology to gain efficiencies. And so through mining and manufacturing and utilities across the North American marketplace, we see new industries trying to get more efficient through 5G technology.
Kevin Gray:
Great. And let's talk about the manufacturing set of things there really quick. I've heard a lot about a factory that you all have launched in Texas. Could you actually elaborate a little bit more on that and particularly the role that something like that might play in everything else you were just talking about?
Kevin Zvokel:
Yeah. Thanks, Kevin. I mean, we're committed too to be carbon neutral, our operations carbon neutral by 2030. And so part of that is changing the Ericsson mindset of all of our employees to focus on that common goal. And so a few years ago we decided that we were going to move manufacturing to the US. And so we're going to build 5G right here in Lewisville, Texas. And so we invested $100 million in our Lewisville facility, created 200 new jobs. And recently we're recognized by the World Economic Forum for sustainability and deploying new technologies. Ericsson not only makes commitments, but we put our money where our mouth is and that smart factory is a proof point.
Kevin Gray:
Okay, great. So the last question I'm going to have for you here, this is going to be a friendly softball question. Okay? So what makes you and your position most proud of the work Ericsson employees are doing to keep the networks running as essential infrastructure of our society?
Kevin Zvokel:
There's so many things at Ericsson that make us proud, but the first and foremost is our employees. And it's hard to believe that two years into COVID, we're still working in an environment where many of us are working from our homes. When COVID hit two years ago, the wireless infrastructure network's traffic pattern completely changed. And so, where most of us were able to work from home, the Ericsson field services team were out there maintaining networks and deploying new capacity. And many times over, we were asked by different cities and municipalities to grow capacity into networks so that kids could take their schooling from home. And so for two years running, our Ericsson field services team continue to engage in the field, to keep our networks running and to keep us all engaged and connected.
Kevin Gray:
Wow. That's great to hear, and that's a great way for us to wrap things up today. Kevin, thank you so much for your time.
Kevin Zvokel:
Thank you, Kevin. I appreciate it.