Ten years of the Ericsson Mobility Report
In November 2011, Ericsson published the first edition of the “Traffic and Market Data Report”. One year later, the report was renamed “Ericsson Mobility Report”, and the rest, as they say, is history…
The foreword of the first report began with the following:
This paragraph captured, more than we realized when we wrote it, some of the fundamental events that shaped the last decade; mobile technology evolved and proliferated rapidly as smartphones became everyone’s go-to-device, its usage impacting our daily lives and changing behaviors across the world. It’s been a privilege to follow this exciting industry so closely over the years through the lens of this report.
The history of the Ericsson Mobility Report (or EMR, as we usually refer to it) tells us a lot about the mobile industry – not only why things happened (or didn’t) but also about big trends and disruptive events that impacted the industry. We have written over 90 articles that – sometimes even better than the forecast data – described the big trends, discussing everything from video streaming and mobile tethering driving usage, to the value created by AI and private networks.
The early years of 4G – getting the drivers right
In November 2011, the majority of data traffic across most mobile networks was generated by laptops with cellular connections, with a small number of users generating a large proportion of the data traffic. Smartphones were growing in popularity and there were around 720 million smartphone subscriptions globally. The end of 2009, only two years earlier, was the first time the volume of monthly data traffic exceeded voice traffic, and also the year 4G was launched.
The visible market drivers at the time led us to underestimate the pace of smartphone and 4G subscription growth – and thereby also traffic growth on handheld devices – while overestimating the potential growth of 4G-connected laptops and tablets, as the smartphone became the device of choice for connecting other devices over Wi-Fi to the mobile network.
One key lesson from the early reports is that once a mobile standard becomes global and reaches significant population coverage, and the ecosystem around it is established, the uptake towards mass market can be faster than even the most optimistic hockey-stick forecasts indicate. For 4G, this mass-market growth happened around 2014–2015 when the global population coverage had reached around 40 percent.
An established ecosystem means new opportunities
If EMR’s early years marked a phase when 4G networks, smartphones and the app ecosystem became mass-market, the later years can be described as a phase when the established ecosystem led to a string of disruptive events as new business models, new entrants in the market and increased competition took center stage. The performance of networks during this time continuously improved, driven by new technology that, together with increased video content, further fueled mobile data traffic consumption and subscriber migration from 3G. This eventually led to the industry gaining the ability to address new market segments with high-speed internet access using 4G.
Comparing our November 2015 forecast to the up-to-date estimated figures for 2021, it is clear we correctly predicted the single most important parameter for this industry’s growth – smartphone subscription outlook. However, as 4G rollout was faster than anticipated, traffic growth was also steeper. The acceleration of the 5G standardization timeline agreed during 2017 naturally resulted in a faster uptake of 5G than could possibly have been predicted in 2015. The overestimation of mobile subscriptions comes down to the uncertainty around the number of passive subscriptions and the interest in dual-SIMs, but that had less impact on actual users or traffic in the networks.
Figure 1: Comparison of forecasts vs. up-to-date data
Disruptive events shaping the growth
Year-over-year (YoY) global mobile traffic growth reveals a few disruptive events in some big markets that impacted the overall traffic on a global scale. Figure 2 shows a few bumps in the YoY traffic curve, highlighting that mobile traffic growth is not just demand-driven, but also sensitive to network capabilities, operator tariffs, traffic shaping and market legislation.
In 2015, a US Tier 1 service provider started offering data bundles with a zero-rated unlimited offering for a few of the most attractive video services on the market. Similar offerings were soon launched by competitors, leading to a steep increase in traffic volumes over mobile networks that could be seen on a global scale.
In 2017, the next unexpected traffic growth event occurred as a result of a new entrant to the Indian market that offered very competitive 4G prices, attracting a huge amount of new smartphone users with very high traffic usage per smartphone. Today, the Indian subcontinent is one of the regions with the highest GB usage per smartphone.
4G arrived in China later than in many other markets. In 2018, the Chinese market showed incredible traffic growth as a result of attractive new offerings and fierce competition, which had a huge impact on the global numbers. Remember, in 2018, global traffic was already 3–4 times higher than it had been just 3 years earlier, and still led to YoY growth figures in the 90 percent range.
Figure 2: YoY global mobile traffic growth
Looking ahead – future demand is built today
Today, mobile networks carry almost 300 times more traffic than in 2011, excluding fixed wireless access (FWA), network speeds have increased hundreds of times and there are now almost 20,000 different 4G device models on the market.1 This would not have been possible without the industry’s ability to scale and the never-ending improvements to network efficiency.
The big question is how past learnings can be applied to the future. Forecasting will continue to be difficult. On the surface, it seems quite straightforward to expect continued growth of 5G subscriptions, and thereby traffic-per-device growth. However, as 5G population coverage increases, we could expect some new disruptive events, maybe in the mid-2020s, that take advantage of 5G capabilities in totally new ways, be it with new devices, business models or applications. With the emergence of mirror worlds, hyperconnectivity and AI, it is also possible that the digitalization of industries and businesses will accelerate more than we can imagine today.
On top of this, there are a number of global societal and geopolitical forces that will inevitably shape the future. The climate crisis and global fragmentation, together with a post-pandemic society with increased virtual connections, will also change the way we act, live and work.
But regardless of how these possible forces of change will impact the mobile industry, it is clear that we are still living in exciting times!
1 GSA (October 2021).