Ericsson’s latest release of its Mobility Report presented a couple of standout headlines.

Among those included early projections for 5G uptake and fairly predictable revelations for global mobile subscription growth fuelled by falling smartphone prices in emerging markets.

But there was also one indicator of where industry growth will almost certainly come from that operators simply cannot overlook.

Mobile data, which the Swedish vendor forecasts to grow tenfold by 2021 in terms of data consumption per user, with “dominant” video set to contribute to 70 per cent of all mobile data traffic, will be the main industry driving force for the next six years at the very least.

With the findings in mind, the company’s head of strategic and tactical marketing, and executive editor of the report, Patrik Cerwall, described T-Mobile US’ latest play to offer free data for video streaming in the country as “a risky tactic”, given the potential for operators to monetise heavily on the opportunity.

Indeed, the rise in expected data usage is ultimately summed up by one of many forecasts made by the company.

By 2021, Ericsson says a smartphone alone will generate 8.4GB of monthly data traffic per user, up from figures of 1.4GB today. Fuelling that will be the uptake of LTE subscriptions, which is forecast to reach 4.1 billion by the end of 2021, a year after 5G is due to commercially launch, up from a projected one billion the 4G network technology will reach by the end of this year.

Frontrunning without Europe
For operators, Ericsson (naturally) provided a few suggestions on how they can lead their businesses towards transformation and capitalise on the rapid uptake of mobile data, as well as exploring ways to improve their share of the value chain.

Of the eight trends highlighted by Ericsson – which include the increasing migration from basic phones to smartphones, a shift towards data-centric subscriptions and connecting more devices (now forecast by the company to reach 28 billion by 2021) – the network giant said there are 20 operators in the chain so far that are successfully leading the industry towards this data heaven of riches.

These 20 so-called “frontrunners” are driving revenue growth from mobile data, in accordance with a study from Strategy Analytics. The study looked into 247 wireless operators globally between 2004 and 2014, which account for 80 per cent of the world’s cellular subscriptions.

While not revealing all of the companies that Ericsson claims are sufficiently cashing in on the data opportunity, Cerwall cited Sprint’s owner SoftBank, Kenya’s Safaricom and Indonesia’s Telkomsel as three operators of 20 that are bucking trends and made the frontrunner grade.

Reiterating its classification in the report, Ericsson described frontrunners as “industry leaders” which, as a group, showed an annual average revenue growth of 9.6 per cent between 2010 and 2014, far exceeding the industry average of 2.7 per cent for the same period. Operators out of this frontrunner category comparatively showed flat CAGR of only 0.6 per cent over the same period.

Expanding on the criteria, a frontrunner is also classified as an operator with annual revenue growth of 5 per cent or higher, non-voice revenue of 25 per cent or higher and positive EBITDA, using fixed exchange rates.

These companies were able to “turn the increasing demand for mobile data services into profitable revenue growth”.

So, bar three, we don’t exactly know who else is stepping up to the mark. But, perhaps more revealing, is that we know who isn’t.

It may come as a surprise, but Ericsson’s list doesn’t include any one operator in Europe.

“Despite relatively high data usage, operators in Western Europe have found driving value for their data services challenging,” read the report.

Cerwall also chipped in, stating the vendor is hopeful that “Europe will turn around”.

“European operators may be working to execute some of the strategies we have highlighted but not sufficiently as required. There are still things holding these companies back.”

What is Europe’s data problem?
So what is holding them back exactly? Is it, as analysts have suggested, a spectrum hangover? Or does regulation at the moment simply not permit these operators, some of them behemoths in the global landscape of the industry, to make as much money from data as they should?

Steven Hartley, practice leader at analyst firm Ovum, told Mobile World Live the most apparent reason for European telcos not being able to monetise on the data opportunity relates directly to the status and nature of competition in the continent.

“Over the years, competition in Europe has intensified so that price was left as one of the few areas on which to compete,” he said. “It’s meant that, as a rival launched LTE, any first move was forced to price match.”

Backing up his point, Strategy Analytics’ study that was used by Ericsson showed Western Europe had -5.8 per cent CAGR for wireless service revenue trends in the decade up to 2014, compared to a global average of 2.7 per cent, and was in fact the only negative global region.

Hartley believes factors related to pricing are also “exacerbated by the nature of competition in Europe around content”.

And outside Europe, the role of the European telco differs from their home markets.

“European telcos have been able to retain more of a role as a content aggregator and distributor,” he said. “In Europe, that role has been seized by the internet players, meaning that European telcos have little opportunity to differentiate beyond connectivity pricing.”

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.