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Mobile broadband subscriptions to hit nearly 9.3 bn worldwide by 2019

Rapid smartphone uptake main driver

Global mobile broadband subscriptions will exceed 2 billion this year and are forecast to reach around 9.3 billion by 2019, according to the recently released "Ericsson Mobility Report".

Mobile broadband subscriptions grew by around 40 per cent this year worldwide, with about 150 million additions. Total mobile subscriptions up to and including the third quarter were around 6.6 billion, including 113 million added during that quarter. The actual number of subscribers is lower than that, however, at around 4.5 billion, because many people have several subscriptions.

Global mobile subscriptions grew by 7 per cent year on year and 2 per cent from the second quarter.

Mobile broadband will gain a larger share of total broadband subscriptions in many markets, complementing fixed broadband, and in certain segments replacing it, the report says. As coverage is built out it is increasingly common for users to replace fixed broadband with mobile. Most mobile broadband devices are, and will continue to be, smartphones.

Smartphone dominance

Throughout the world there is continued momentum for smartphone uptake. These devices accounted for about 55 per cent of all mobile phones sold in the third quarter, compared with about 40 per cent for all of 2012.

Total smartphone subscriptions are expected to reach 1.9 billion by the end of this year, growing to 5.6 billion by 2019. One of the main reasons for this is a notable increase in subscriptions in the Asia-Pacific, Middle East and Africa regions, as people will be likely to exchange their basic phones for smartphones. This partly because of the availability of smartphones in lower price ranges. By 2016 there will be more smartphone subscriptions globally than those for basic phones, if trends hold true.

Douglas Gilstrap, senior vice president and head of strategy at Ericsson, said the pace of smartphone uptake had been phenomenal and was set to continue. It took more than five years to reach the first billion smartphone subscriptions, but it will take less than two years to hit the 2-billion mark. Between now and 2019, smartphone subscriptions will triple, he believes.

Meanwhile, Long Term Evolution (LTE) technology is being deployed and built out in all regions, and will reach around 2.6 billion subscriptions by 2019, Ericsson believes. These subscriptions will represent the high-end share of the total subscriber base.

The number of subscriptions for mobile computers, tablets and routers is expected to grow from 300 million this year to about 800 million by 2019. There are a large number of personal computers and tablets without a mobile subscription.

All regions show growth in mobile subscriptions. In Asia and the Pacific this is driven by new subscribers. In more mature markets, such as North America and Western Europe, the growth is limited and comes from the increasing number of subscriptions per individual, for example adding a tablet.

The Asia-Pacific market will continue to see a significant increase in mobile subscriptions, with 1.4 billion net additions up until the end of 2019, the report predicts. That represents about half of added mobile subscriptions globally.

Markets such as Japan and South Korea will take up LTE subscriptions earlier than less developed countries. Today LTE penetration is already over 20 per cent in Japan and over 50 per cent in South Korea. China will add substantial LTE subscriptions during the forecast period, surpassing 700 million by the end of 2019, Ericsson believes.

The Asia-Pacific region is progressing towards third- and fourth-generation wireless broadband. This year, about 75 percent of mobile subscriptions were 2G, while about 85 per cent are expected to be 3G/4G by 2019.

Data traffic growth

Mobile data traffic is expected to see a compound annual growth rate (CAGR) of about 45 per cent between now and 2019. Mobile data traffic will grow considerably faster than that of fixed data over the forecast period, with the latter's CAGR put at around 25 per cent in the period.

However, fixed data traffic will remain dominant. Mobile data traffic represents 5 per cent of total mobile and fixed traffic currently, and is projected to reach 12 per cent by 2019. By that time, smartphone subscriptions are expected to triple, resulting in rapid traffic growth. Total monthly smartphone traffic over mobile networks will increase around 10 times between now and then.

The rising number of smartphone subscriptions is the main driver for mobile data traffic growth. Users consuming more data per subscription, mainly driven by video, is adding to this, resulting in the increase.

The largest and fastest-growing segment of mobile data traffic is video. It is expected to increase by about 55 per cent annually up until the end of 2019, by which point it is forecast to account for more than half of global mobile traffic.

This year, total traffic generated by mobile phones exceeded that from mobile PCs, tablets and mobile routers for the first time. Traffic in the mobile-phone segment is primarily generated by smartphones.

The Asia-Pacific region will have a high share of the total mobile traffic between now and 2019. The main reason for this is the rapid growth in subscriptions. China alone is expected to add more than 500 million mobile subscriptions.

There are large differences in usage volumes and patterns within this region, with countries such as South Korea and Japan deploying LTE early, whereas other countries are still dominated by GSM (global system for mobile communications) networks.

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