In its most recent Mobility Report, Ericsson estimates that mobile data traffic doubled from the third quarter of last year. There’s no end in sight for data demand either: Ericsson estimates that between 2012 and 2018, demand for mobile data will increase twelve-fold. The two key drivers of such growth? Consumers continuing to adopt smartphones and the rising amount of online video consumption on the go.
We’ve previously noted that in the U.S. more than 50 percent of the population has a smartphone, so the growth opportunity for first-time smartphone buyers is actually declining. Sales of smartphones in other regions are on the rise, however, with smartphone sales accounting for 40 percent of all mobile phones sold in the last quarter according to Ericsson. The top activities on handsets are adding to the data demand: web browsing and video consumption comprise around 35 percent of all smartphone data usage. And already about half of all video consumption on a smartphone takes place outside the home on a mobile network.
Those usage figures rise higher on the larger displays of tablets. Ericsson says that 40 percent of all mobile data used on tablets is due to growth in online video activities.
I noted this back in August with my somewhat outlandish prediction that small tablets will eventually replace smartphones. The larger the screen — but still portable, of course — the more immersive and enjoyable the video consumption experience can be.
Ericsson also notes the current shift to HSPA+ and LTE around the world as these faster, more efficient data networks are needed to keep up with demand. By the end of this year, an estimated 55 million subscribers will use LTE, for example, but that number will quickly grow to 1.6 billion by 2018. In the meantime, however, WCDMA/HSPA networks are shouldering the transitional load with more growth in subscribers than LTE as carriers have to build out new infrastructure for LTE coverage for our mobile screens.
Granted, Ericcson is a major seller of networking equipment, so it stands to benefit from such growth. So perhaps a little skepticism is warranted on the details, but the trends appear sound to me. In fact, mobile operators are likely to be happy with such forecasts as more mobile device sales growth fuels the rallying cry of “spectrum shortage!” However, these same operators are capping mobile broadband plans which Dean Bubly notes on his Disruptive Wireless blog could actually limit growth while helping carriers optimize billing and usage.
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