The Ericsson figures for actual and net added subscriptions are based on several data sources including regulators and operators, as well as macroeconomic factors.
Ericsson performs forecasts on a regular basis to support internal planning as well as market communications. The subscription and traffic forecast baseline in this report is based on historical data from various sources, validated with Ericsson internal data, including extensive measurements in customer networks. Future development is estimated based on macroeconomic trends, user trends (including research by Ericsson ConsumerLab), market maturity, technology development expectations and documents such as industry analyst reports, on a national or regional level, together with internal assumptions and analysis. Updates to the subscription and traffic forecasts are announced regularly.
Ericsson regularly performs traffic measurements in over 100 live networks in all major regions of the world. Detailed measurements are made in a selected number of commercial WCDMA/HSPA and LTE networks with the purpose of analyzing various mobile traffic patterns. All subscriber data is made anonymous before it reaches Ericsson’s analysts.
Why is Ericsson doing these measurements?
Ericsson is constantly aiming for solutions and products with superior performance. Understanding the traffic volumes and patterns are crucial to improve product development as well as network dimensioning and optimization. In these measurements, Ericsson works together with operators as well as directly towards device manufacturers and application providers.
A part (25%) of the gap is due to mobile PCs, tablets and mobile router subscriptions, but the majority are related to 3G/4G phones that do not fulfill the definition we have used for smartphones (i.e. having an open OS capable of downloading and running “apps”, like iPhones and Android OS phones). Many of these devices are probably still relatively “smart” and with good screen, but do not have an open OS etc. as defined.
All four major operators in the US have publicly announced that they will begin providing 5G services between late 2018 and mid-2019. It is likely that there will be a fast take up of 5G services in the country
In South Korea, a large-scale 5G trial network was used during the winter Olympic Games in February 2018. Operators in the country have announced their intention to launch commercial 5G services early. Japan have stated they will have 5G ready for the Tokyo 2020 Olympic and Paralympic. The Chinese government, meanwhile, has also pushed for the aggressive deployment of 5G technology. China is hosting the 2022 Winter Olympics in Beijing.
Mobile data traffic is expected to have grown by a factor of 8 by the end of 2023. How should we look at that in relation to expected mobile equipment market growth and Ericsson mobile equipment sales?
The development of the mobile equipment market is not solely a function of traffic volume growth. Other factors including coverage build-out, network efficiency, speed and quality requirements driven by new devices and applications, also play an important role.
The traffic carried over 5G networks is the traffic actually using the 5G Radio Access network (RAN) – subscribers with 5G subscriptions will in addition to this also generate traffic that use the 4G (LTE) network (or 3G) when in areas where 5G coverage is not yet established.
We don’t share data on country level (with a few exceptions of large countries, such as China). One reason is that the uncertainty of forecasts reaching to 2023 increases when drilling down to country leve (l. More detailed data behind some of the graphs is available via the Ericsson Traffic Exploration tool.
The first devices will be 5G “pocket routers”, which will start to be available toward the end of this year. The first smartphones and FWA (fixed wireless access) terminals will be available in 2019.
A pocket router is a portable device with 5G modem and can set up a mobile hotspot and/or connect directly to a PC through a USB port.
When listing markets that will be early to launch 5G commercial services (in the chapters: “Mobile subscriptions outlook” and Regional Subscriptions Outlook”), how come Qatar, UAE and Saudi Arabia are not included although they also publicly announced launching 5G?
In the chapters “Mobile subscriptions outlook” and “Regional subscriptions outlook”, we list markets where we forecast significant volumes of 5G subscriptions early, i.e. North America and North East Asia. When it comes to MEA, we will start seeing 5G subscription within 2019 while the first million 5G subscription in our forecast occurs in 2021, and with that we are slightly more optimistic than other forecasters. In North America as well as in North East Asia we forecast the first million 5G subscription in 2019.
In mid-May, Ooredoo announced a launch of the first 5G Commercial Network. The company also stated that access to its 5G network will require a 5G-compatible device from Ooredoo. The timing of device availability was not announced. Ooredoo’s announcement was followed by STC and Etisalat announcements.
Note that there are no 5G devices commercially available yet. The 3GPP-based 5G NR standard is still under finalization and the first very few 5G devices will likely be introduced towards the end of 2018. However, testing the technology in the field contributes to its development. Ericsson has publicly announced the first five 5G deals and we successfully conducted 5G trials with multiple operators which in Middle East and Africa also includes Etisalat, Ooredoo and STC.
Both VoLTE and Wi-Fi calling rely on an IP Multimedia Subsystem (IMS) network to deliver the voice services, and other communication services like video calling. Operators that have launched VoLTE over their LTE network (the telephony service is delivered via the IMS network), could extend the same voice service (same SIM card) into buildings using Wi-Fi where there is poor LTE coverage. Operators that have not yet launched VoLTE, could also start to offer Wi-Fi calling services in users’ homes over their own Wi-Fi access point, if the users have bad 2G/3G coverage in their homes. When operators later deploy VoLTE, the voice service can work seamlessly between LTE and Wi-Fi access, which means that when users leave their house while being on a phone call over Wi-Fi the voice call will continue automatically over LTE when the signal becomes too weak.
VoLTE uses network mechanisms to make the service predictable and independent of load from other mobile data services, while for Wi-Fi calling, the service quality will be dependent on the local radio environment and load from other users connected to the same Wi-Fi access point. Thus, Wi-Fi calling is recommended for residential usage and smaller enterprises, while larger enterprises are recommended to use 3GPP-based small cell solutions to guarantee high-quality real-time voice and video calling services.
3GPP standardization for 5G is ongoing and the aim is that IMS/VoLTE will also be used as the service engine to enable voice and communication services over 5G access. This means that operator voice services will be carried over 5G access and delivered via IMS. There will be different phases in the network and device evolution when it comes to offering voice services over standalone and non-standalone 5G access.
Ericsson is exploring new use cases and business ideas on how communication services could be used and improved when 5G access is deployed, i.e. using the higher capacity and lower latency in 5G networks. It could for example be use cases combining voice with augmented reality, different types of IoT use cases, and other services relevant for industries and enterprises.
We believe a vision should be simple to grasp with a clear message, and reachable. 50 billion connected devices is a good milestone for the Networked Society that we believe will be reached sometime after 2023. Our 30 billion forecast represents our best estimate of the number of connected devices expected at the end of 2023.
Our forecast does presently not go beyond 2023. However, 5G is built on the promise of many new use cases where IoT is a key part. With the launch of commercial operations of 5G in 2020 it is likely that this will further fuel the uptake in connected devices.
Typical examples are connected cars, remote metering (e.g. utility meters), Point-of-Sale terminals, Security systems, Tele-health devices, smart TVs as well as other connected consumer electronics.
We estimate 3.5 billion cellular IoT connections, which is around 85% of the wide-area category. There is a considerable upside potential considering ongoing deployments of massive IoT networks, driven by China.
Our forecast does not currently publish details on each sub-segment. Worldwide there are around 80 million new cars sold every year. If 50% of those are connected from now until 2023, this would mean a few hundred million more connected cars compared to today.