Trends and Drivers
The general industry trend in 2011 was the focus on high performance broadband networks. This includes the mobile broadband business case for customers, meeting increased user demands and the strong uptake of mobile devices such as tablets and smartphones.
Prices of smartphones continued to decline and in high growth markets, smartphones at a retail price of less than USD 100 were introduced. Operators started to look into tiered pricing and new business models for mobile broadband, as well as the introduction of cloud-based services. In Europe, operators started to modernize their mobile networks, while it became an increasing interest among operators globally to transform their Operations Support Systems (OSS) and Business Support Systems (BSS).
When forecasting the market and developing internal plans, Ericsson looks at a number of parameters. These include:
- High-traffic smartphone subscriptions, as percentage of total subscriptions
- Average data traffic, measured in Mbytes per subscription per month
- Mobile broadband subscriptions as percentage of total mobile subscriptions.
Out of the installed base of subscriptions worldwide only around 10% use smartphones. With cheaper smartphones being introduced, this number is expected to grow.
Ericsson estimates that overall mobile data traffic more than doubled in 2011. Mobile data traffic is expected to grow tenfold by end of 2016, mainly driven by video.
Traffic per subscriber partly relates to the screen size of the device. On average, a mobile PC user generates about 2 Gbytes of data per month, while a high-traffic smartphone user generates approximately 500 Mbytes per month.
The coverage of the world’s mobile networks is constantly increasing as more radio base stations are being deployed. GSM/EDGE is the technology that by far has the widest reach, and today covers more than 85% of the world’s population. WCDMA/HSPA covered about 35% of the population in 2010 and now covers more than 45% of the world’s population.
Further build out of WCDMA/HSPA coverage will be driven by the availability of affordable smartphones, the surge in mobile broadband services and faster speeds, as well as regulators’ requirements to connect unconnected people. By end of 2016, the Company estimates that 80% of the world’s population will have WCDMA/HSPA coverage.
The combined 2G and 3G population coverage for CDMA is estimated to be above 50%. CDMA coverage is expected to grow slightly, and most large CDMA operators have announced a migration plan to LTE.
Several major operators have started LTE deployments but in terms of population coverage LTE has a long way to go. In five years’ time, it is expected that LTE will have a population coverage of about 35%. In terms of global operator investments, WCDMA/HSPA is expected to remain the leading mobile access technology for many years.
From a geographical perspective, GSM only lacks coverage in certain rural areas, while there are still large densely populated areas lacking WCDMA/HSPA coverage.
GSM/EDGE, WCDMA/HSPA and LTE are all expected to increase both in terms of population and land coverage. LTE is expected to have an even faster adoption rate than previous technologies.