Despite LTE coverage reaching 80 per cent of Europe’s population by 2019, the region’s 4G subscriber penetration will only reach 30 per cent. In North America, by sharp contrast, near-nationwide LTE coverage will reap a 4G subscriber penetration rate of 85 per cent.
This is one of the key findings of Ericsson’s latest mobility report, which forecasts global mobile data and subscription growth – including regional variations – by extrapolating information from over 200 networks around the world.
Patrik Cerwall, Ericsson’s head of strategic marketing and intelligence, partly attributed the huge LTE discrepancy to CDMA operators in North America being keener to adopt LTE than their European W-CDMA counterparts, and that 3G in Europe is already “pretty good”.
More worryingly, in terms of evaluating LTE’s ROI in Europe, Cerwall suggested that the region’s 80 per cent LTE population coverage in 2019 would be pushed more by regulators (attaching coverage targets to 4G licences) than consumer demand.
Now in its sixth edition, Ericsson’s mobility report contained a battery of observations and predictions, some of them perhaps more surprising than others.
The much-hyped M2M market, for example, accounts for only around 0.1 per cent of total cellular traffic. The report predicts, however, that the number of active cellular M2M devices will increase 3-4 times by 2019, from 200 million at the end of 2013.
While the majority of cellular M2M devices today are still GSM-only, that is expected to shift by 2016 when 3G/4G will represent the majority of active cellular M2M subscriptions.
In a statement accompanying the mobility report, Rima Qureshi, Ericsson’s chief strategy officer, expected cellular M2M to take off. “Over time, cellular M2M services and applications related to, for example, intelligent transport systems, will require very short latency in order to be efficient,” she said. “By 2019 we estimate that more than 20 per cent of the active cellular M2M devices will be connected to LTE subscriptions. We also see new device-to-device and M2M applications as a key focus of 5G networks.”
In terms of mobile subscriptions, Ericsson said they totalled 6.8 billion globally by Q1 2014 with 120 million net additions in the quarter alone. Of that number, over 2 billion are mobile broadband subscriptions.
The number of LTE subscriptions stood at 240 million at the end of March, according to Ericsson (around 35 million additions in Q1 2014). LTE subscriptions are expected to reach 2.6 billion by 2019.
Spurred on by multi-SIM adoption and growth in emerging markets, Ericsson expects the total number of mobile subscriptions to reach 9.2 billion by the end of 2019 (80 per cent of which will be mobile broadband).
Mobile data traffic volumes continue to grow, but not doubling per year as seen previously – growth in data traffic between Q1 2013 and Q1 2014 was 65 per cent.
Data volumes, not surprisingly, are being fuelled by smartphone adoption. In two years’ time, in 2016, Ericsson expects the number of smartphone subscriptions to exceed those for basic phones. By 2019 the number of smartphone subscriptions is anticipated to reach 5.6 billion.
In Europe, says the report, the number of smartphone subscriptions will reach about 765 million in 2019 (exceeding the population number).
Ericsson added that 65 per cent of all phones sold in Q1 2014 were smartphones.
Compared to today, a smartphone user in 2019 is expected to consume almost four times the amount of mobile data per month. This contributes to the 10-fold growth prediction in mobile data traffic between 2013 and 2019.
The global figures, however, mask huge regional differences.
In Europe, Cerwall said mobile traffic per active subscription averaged out at around 800MB per month. In Japan it is 1.3GB and in South Korea it rises to 2GB. In China, however, it is only 150MB, giving the country huge potential for growth.
Ericsson reckons LTE subscriptions will exceed 700 million in China by the end of 2019 (representing more than 25 per cent of global subscriptions by that time).
Moreover, total mobile data traffic in China is set to increase over 15 times between 2013 and 2019, compared to around 10 times globally.
In other words, if Ericsson is correct, total LTE traffic in China in 2019 will be approximately equal to total global mobile traffic in 2013.