Headline stats from Ericsson’s latest Mobility Report out this week (17 November 2015) which provides an update on mobile trends, includes a prediction that 5G mobile subscriptions will reach 150 million by 2021 – mostly coming from South Korea, Japan, USA and probably China.
Ericsson defines a 5G subscription as one that requires a device capable of supporting LTE Evolved or Next Generation, connected to a 5G-enabled network supporting new use cases. 5G subscriptions will provide enhancements in mobile broadband services, as well as enable a wider range of use cases, for example, the Internet of Things.
The report, Ericsson’s 9th, also reveals a significant increase in mobile video consumption, which is driving around six times higher traffic volumes per smartphone in North America and Europe (2015 to 2021). North America data traffic per active smartphone will grow from 3.8 to 22 Gb per month by 2021; in Western Europe, the increase is from 2 to 18 Gb per month.
Global mobile data traffic is forecast to grow ten-fold by 2021, and video is forecast to account for 70% of total mobile traffic in the same year. In many networks today, YouTube accounts for up to 70% of all video traffic, while Netflix's share of video traffic can reach as high as 20% in markets where it is available.
With 20 new mobile broadband subscriptions activated every second, global increase in mobile subscriptions is another clear driver for data traffic growth. As of now, there are the same amount of mobile subscriptions as there are people on the planet; in 2016 we will reach the four billion mark for smartphone subscriptions alone.
Other headline statistics include the fact that Mainland China will becomes the largest LTE market in the world with nearly 35% of all LTE subscriptions by the end of 2015 with 350 million LTE subscriptions. The market is predicted to have 1.2 billion LTE subscriptions by 2021.
It also shows that Africa is becoming an increasingly connected continent. Five years ago (2010) there were 500 million mobile subscriptions across Africa; by the end of 2015 this number will double to 1 billion. Increased connectivity improves the prospect of financial inclusion for the 70% unbanked through mobile money services starting to take form across Africa.
On the sustainability front, Ericsson believes that by 2030, ICT will enable savings in energy consumption and greenhouse gas (GHG) emissions across all other industrial sectors. The total emission reduction could be up to 10 gigatonnes of CO2e, representing about 15% of global GHG emissions in 2030 - more than the current carbon footprint of the US and EU combined.
Ericsson is predicting that there will be 28 billion connected devices by 2021 of which 15 billion will be connected M2M and consumer electronic devices (this excludes RFID tags and passive sensors). By that date it estimates that 1.5 billion devices will be on cellular subscriptions and 10.7 billion will by M2M devices on non-cellular networks.
In terms of population coverage, LTE covered 40% of the world’s population in 2014 and is predicted to rise to 75% by 2021 with GSM/Edge reaching 95% and WCDMA/HSPA covering 90% by the same date.
Interestingly, users are proving to be very loyal to their chosen device operating systems with 80% of Android and iOS users staying with the same OS when they upgrade.
Mobile Business Trends Appendix
Ericsson has added a new element to the report this year in the shape of a Mobile Business Trends appendix. Patrick Cerwall, the executive editor of the report, said at a briefing to launch the report on 17 November that mobile operator revenue growth has been flattening out since 2004, but data revenue has grown by 34%.
The appendix outlines eight trends that detail how successful mobile operators are using different ways to monetise the explosion in data consumption and growing demand for mobile services. The eight trends are:
Enablement: 1. Migration to smartphones; 2. Data-centric subscriptions
Operators are taking fundamental actions to accommodate the shift to a data-centric world. By promoting smartphones and creating the right portfolio of subscriptions, which allow users to gradually evolve their usage, operators can motivate their customers to become mobile data users and thereby enable further growth.
Extension: 3. Increasing data usage; 4. Connecting more devices
Operators are continuously striving to extend their mobile data revenues. By encouraging customers to increase their mobile data usage, connect multiple smart devices and adopt higher data speeds for better experiences, operators motivate customers to evolve their usage and pay for the data consumed.
Expansion: 5. Monetising content, apps and services; 6. Targeting adjacent industries
Many operators are expanding their business beyond their core services. By embracing demand for digital services, operators use content and apps as a means to differentiate themselves from the competition and to increase revenues. Operators are also addressing new use cases and revenue opportunities by targeting their offering to specific service areas.
Exploration: 7. Two-sided business models; 8. Opening up network capabilities
Several operators are exploring new sources of revenues through innovative two-sided business models or through new applications of current network assets. The evolving ICT industry comes with new uses cases, new value chains and new ways for operators to capitalise on their network capabilities (e.g. billing), which all provide opportunities for revenues from outside their traditional customer base.
Cerwall said Ericsson has identified a number of frontrunner operators, which are well ahead of the pack in successfully monetising data. Frontrunners are seeing revenue increases of 9.6% CAGR, while the rest are seeing no better than 0.6% CAGR – he noted that there are no European mobile operators among the frontrunners.
The full Ericsson Mobility Report, Traffic Exploration Tool, Mobile Business Trends appendix and regional reports for Europe, South East Asia & Oceania (launched November 24th), North East Asia (launched early December), North America, Middle East & North East Africa, Latin America & the Caribbean, and Sub-Saharan Africa can be downloaded at www.ericsson.com/mobility-report