1. Ericsson Mobility Report: On forecasts, Shakespeare and the unknown

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Ericsson Mobility Report: On forecasts, Shakespeare and the unknown

The latest edition of the Ericsson Mobility Report was released this morning, with its usual complement of statistics and forecasts of mobile subscriptions, coverage and traffic.

A quick perusal of the report reveals that the major trends in the industry are alive and kicking: moderate subscription growth along with continued impressive technology migration rates (from GSM/EDGE to 3G and from 3G to LTE), devices, and traffic projected through the six-year forecast horizon.

By the end of 2023, there should be nine billion mobile subscriptions, seven of which are associated with smartphones which will be generating an average of 17GB of traffic per month, resulting in 110 Exabytes of monthly mobile data traffic.

One could be forgiven for asking how likely it is that the numbers we are forecasting for 2023 will actually come true. And an honest answer to that question goes well beyond a flippant: “The only thing right about a forecast is that it is wrong.” There are many considerations that go into predicting mobile network traffic including assumptions on subscription growth, user devices, content and usage.

Tracking the trends

As we are looking at large numbers and global trends build up by regional and local statistics, one would think the overall traffic pattern would be consistent, and not dramatically influenced by unforeseen “one-off” events. But that is not the case. The graph below is taken from the latest Mobility Report, with the bars illustrating the growth of global mobile network traffic, measured in Exabytes per month. The plotted line shows the annual percentage change. The line indicates two periods where the moderating growth rate clearly increases: in 2015 and again in the second half of 2016.

When we searched the model for factors behind these anomalies, it both turned out to be caused by isolated events that were significant enough to disrupt the global pattern: the first was related to an operator’s offer of zero-rated video traffic in the US and competitors responding with unlimited data plans, and the most recent one was traced to Reliance Jio’s free LTE data offer in India.

So the general trend over time continues, with not-insignificant variations. One observation is that both of those trend-breaking events were on the up-side. If one is to be prepared for unforeseen events (who remembers Donald Rumsfeld’s unknown unknowns?) one should expect surprises on both sides of the trend line.

The rise of video and smartphones

What are the drivers of the general trend: high but moderating traffic growth? The two biggest factors are the increase of smartphone penetration and the expansion of video content into social media, web browsing and many other applications. Another factor that will grow in importance over the next few years is the increase in video quality and emergence of more immersive forms of video.

So, back to the wisdom of funny forecast quotes: The thing guaranteed about a single-point forecast is that it will be wrong. But that doesn´t mean it is worthless. The value of a forecast is in reflecting on its constituent parts. It pushes us to explore what is happening with devices, apps and content as well as networks.  And, if I may be forgiven, I’ll twist a quotation from Shakespeare’s Macbeth to my own purposes: “If you can look into the seeds of time, and say which grain will grow and which will not, speak then to me.” Thanks, Banquo, I couldn’t have said it better myself.

For a closer look at the latest facts, figures and forecasts of mobile subscribers, coverage and traffic please visit Ericsson Mobility Report.

Written by Stephen Carson

Stephen Carson, Networks Strategic Marketing Manager, is a writer and editor of the Ericsson Mobility Report. He specializes in network economics and has developed App Coverage and Total Cost of Ownership models for radio access. Stephen has a B.A. from the University of California at Berkeley and an MBA from INSEAD at Fontainebleau in France.

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