Ericsson Mobility Report 2019.pdf

Subscriptions Strong 5G subscription momentum as ecosystem rapidly develops Mobile data traffic Driven by constantly increasing video content, mobile data traffic continues to surge Co-written articles Insights from SK Telecom and MTN Group illustrate strong mobile industry progress ericsson.com/ mobility-report Ericsson Mobility Report November 2019 2Ericsson Mobility Report | November 2019Introduction2Ericsson Mobility Report | November 2019 Key contributors Executive Editor: Patrik Cerwall Project Manager: Anette Lundvall Editors: Peter Jonsson, Stephen Carson Forecasts: Richard Möller Authors: Peter Jonsson, Stephen Carson, Greger Blennerud, Jason Kyohun Shim, Brian Arendse, Ahmad Husseini, Per Lindberg, Kati Öhman Co-authors: Navindran Naidoo, Pieter Van der Westhuizen, Emmanuel Lartey: MTN Group (South Africa) Jonghun Lee, Chiyoung Choi: SK Telecom (South Korea) 5G goes from strength to strength as networks are built out across the world. A big uptake of 5G subscriptions has taken place in South Korea, with around 3 million subscribers recorded in just a few months. Globally, we estimate 5G subscriptions for the end of 2019 will reach 13 million. In perspective, what has happened in 2019 doesnt determine the success of 5G but rather indicates what is to come. When looking at the development in this industry over the last few years it is truly astonishing to see the progress. The 5G specifications were accelerated in 3GPP, leading to device and infrastructure vendors taking on the challenge to deliver 5G earlier than expected. It is encouraging to see that 5G now has broad support from almost all device makers, and a very strong ecosystem. Together with SK Telecom we take a closer look at the deployment strategies used to capture early benefits of 5G. We also examine communications service provider tariff plans and how they are evolving. So far, a majority of the launch markets are charging a premium averaging almost 20 percent for 5G subscriptions. Today most of the investments, traffic and subscriptions are in 2G, 3G or 4G networks. Modernizing existing networks, improving network performance and increasing user experience continue to be at the core of every service providers day-to-day business. Together with MTN, we explore how this is achieved in two African markets. By 2025, we expect 5G to have 2.6 billion subscriptions covering up to 65 percent of the worlds population and generating 45 percent of the worlds total mobile data traffic. I hope you find the report engaging and useful! Publisher Fredrik Jejdling Executive Vice President and Head of Business Area Networks 5G momentum continues Letter from the publisher We describe how in Ghana and Rwanda, MTN Group is leveraging network performance and customer loyalty to address growth opportunities. Page 24 We explore how mobile networks provide reliable and secure connectivity, meeting different use case requirements of automotive and transport applications. Page 18 3Ericsson Mobility Report | November 2019Introduction Articles 18 Automotive IoT 20 A strategy for differentiating the 5G user experience 24 Network performance as a lever for business growth 28 Mobile service packaging trends 32 Methodology 33 Glossary 34 Global and regional key figures Forecasts 04 Mobile subscriptions Q3 2019 06 Mobile subscriptions outlook 08 5G device outlook 09 Voice and communication services trends and outlook 10 Regional subscriptions outlook 12 Mobile traffic Q3 2019 13 Mobile traffic by application category 14 Mobile data traffic outlook 16 Network coverage 17 IoT connections outlook The content of this document is based on a number of theoretical dependencies and assumptions. Ericsson shall not be bound by or liable for any statement, representation, undertaking or omission made in this document. Furthermore, Ericsson may, at any time, change the contents of this document at its sole discretion and shall not be liable for the consequences of such changes. Contents Find out more Scan the QR code or visit www.ericsson.com/mobility-report We show how increasing performance levels of 4G and introducing 5G are driving innovation in mobile service packaging. Page 28 With SK Telecom, we look into their cluster-based 5G deployment strategy, focusing on customer experience. Page 20 4Ericsson Mobility Report | November 2019Forecasts Mobile subscriptions Q3 2019 The number of mobile subscriptions grew at 3 percent year-on-year and currently totals around 8 billion. High subscription growth continues from previous quarters in China, which had the most net additions during the quarter (+14 million), followed by Indonesia (+9 million) and the Philippines (+8 million). The number of mobile broadband subscriptions1 grew 10 percent year-on-year, increasing by 120 million in Q3 2019. The total is now 6.2 billion or 77 percent of mobile subscriptions. The number of 4G (LTE) subscriptions increased by 190 million during the quarter to reach a total of 4.2 billion, or 52 percent of all mobile subscriptions. 3G (WCDMA/HSPA) subscriptions declined by 50 million and 2G (GSM/EDGE-only) subscriptions declined by 70 million. Other technologies2 declined by around 10 million. The total number of mobile subscriptions was around 8 billion in Q3 2019, with 61 million subscriptions added during the quarter. 1 Mobile broadband includes radio access technologies HSPA (3G), LTE (4G), 5G, CDMA2000 EV-DO, TD-SCDMA and Mobile WiMAX ² Mainly CDMA2000 EV-DO, TD-SCDMA and Mobile WiMAX * India region includes India, Nepal and Bhutan * Excluding China and India Figure 1: Subscription penetration Q3 2019 (percent of population) 123% Western Europe 114% China 141% Central and Eastern Europe 82% Africa 101% Latin America 105% North America 111% Middle East 86% India* 117% APAC* Subscriptions associated with smartphones account for more than 70 percent of all mobile phone subscriptions. Mobile subscriptions exceed the population in many countries, which is largely due to inactive subscriptions, multiple device ownership and use of different subscriptions for different types of calls. As a result, the number of mobile subscribers is lower than the number of mobile subscriptions. Today, there are around 5.9 billion subscribers globally compared to 8 billion subscriptions. Global mobile subscription penetration is at 104 percent. 5Ericsson Mobility Report | November 2019Forecasts 6.2bn There are now 6.2 billion mobile broadband subscriptions. 52% A total of 52 percent of all mobile subscriptions are now for LTE. 61m During the quarter, 61 million subscriptions were added. Figure 2: Total and net additions for mobile subscriptions Q3 2019 (million) North America385 (+2) Middle East415 (+7) Western Europe515 (+1) Central and Eastern Europe 575 (+1) Africa1,065 (+15) APAC (excluding China and India) 1,595 (+16) India1,170 (+6) Latin America665 (-1) China1,595 (+14) Figure 3: Top countries by net additions Q3 2019 China +14 million Indonesia +9 million Philippines +8 million 6Ericsson Mobility Report | November 2019Forecasts 8 1 3 2 4 10 9 7 6 5 1 Ericsson and GSA, November 2019 2 A 5G subscription is counted as such when associated with a device that supports New Radio (NR), as specified in 3GPP Release 15, and is connected to a 5G-enabled network Mobile subscriptions outlook A total of 13 million 5G subscriptions are expected by the end of 2019. During the third quarter of 2019, service providers continued to switch on 5G and more 5G devices became available. Around 50 service providers1 around the world have announced commercial 5G service launches. A big uptake of 5G subscriptions2 has taken place in South Korea, where all service providers launched commercial 5G services at the beginning of April. The initial focus for all three has been enhanced mobile broadband targeted at consumers, with immersive experiences based on virtual reality (VR), augmented reality (AR) and high-quality streaming. On a global level, 5G network deployments are expected to ramp up during 2020, building the foundation for massive adoption of 5G subscriptions. Over the next six years, 5G subscription uptake is expected to be significantly faster than that of LTE, following its launch back in 2009. Key factors are the earlier engagement of China in 5G compared to LTE, for which the country was not one of the early markets to launch, as well as the earlier availability of devices. With the continued momentum for 5G, we predict 13 million 5G subscriptions by the end of this year. A big share of these subscriptions is expected to be in China. All three of the main service providers launched commercial 5G services in Q4 2019. Sign-up of customers started even before launch, with more than 10 million 5G users registered in October 2019. In 2025 we forecast 2.6 billion 5G subscriptions globally, accounting for 29 percent of all mobile subscriptions at that time. Figure 4: Mobile subscriptions by technology (billion) 20152016201720182019202020212022202320242025 Note: IoT connections are not included in this graph 5G LTE (4G) WCDMA/HSPA (3G) GSM/EDGE-only (2G) TD-SCDMA (3G) CDMA-only (2G/3G) Other 8.9 billion 8 billion 2.6bn In 2025, 2.6 billion 5G subscriptions are forecast. LTE will remain the dominant mobile access technology by subscription during the forecast period. It is projected to peak in 2022 at 5.4 billion subscriptions and decline to around 4.8 billion subscriptions by the end of 2025 as LTE subscriptions migrate to 5G. We anticipate a slower decline for 2G (GSM/EDGE-only) subscriptions than previously estimated, particularly in the Middle East and Africa region. In part, this is due to the longer life-cycles of 2G feature phones and the relatively higher cost of smartphones. 0 7Ericsson Mobility Report | November 2019Forecasts 3 The number of fixed broadband users is at least three times the number of fixed broadband connections due to shared subscriptions in households, enterprises and public access spots. It is the opposite for mobile phones, where subscription numbers exceed user numbers. FWA subscriptions are not part of the fixed broadband subscription estimate In 2025, 90 percent of subscriptions are projected to be for mobile broadband We estimate that there will be 8.9 billion mobile subscriptions by the end of 2025, out of which around 90 percent will be for mobile broadband. This is a slightly lower share than previously forecast, due to a slower decline for 2G (GSM/EDGE-only) subscriptions in the Middle East and Africa region. The number of unique mobile subscribers is projected to reach 6.3 billion by the end of the forecast period. Smartphone penetration continues to rise. Subscriptions associated with smartphones account for around 70 percent of all mobile phone subscriptions. It is estimated there will be 5.6 billion smartphone subscriptions by the end of 2019. The number of smartphone subscriptions is forecast to reach 7.4 billion in 2025, or 83 percent of all mobile subscriptions. Subscriptions for fixed broadband are expected to show limited growth of around 2 percent per year through 2025.3 Subscriptions for mobile PCs, tablets and routers are expected to show moderate growth, reaching around 330 million in 2025. 1 Figure 5: Subscriptions and subscribers (billion) 2015201620172018202020212022202320242025 8bn In 2025, there will be 8 billion mobile broadband subscriptions. Mobile broadband subscriptions Mobile PC, tablet and router subscriptions Mobile subscriptions Mobile subscribers Fixed broadband subscriptions 2019 0 9 8 7 6 5 4 3 2 Figure 6: Smartphone subscriptions by technology (billion) 2019 +0.3 +2.5 8 7 6 5 4 3 2 1 7.4 billion 2025 4G 5G 2G/3G 5G 4G 2G/3G 2G/3G 0 4G 5.6 billion-1.0 8Ericsson Mobility Report | November 2019Forecasts 5G device outlook Second-generation chipsets will support 5G ramp-up. Interoperability testing of second-generation silicon is now underway in laboratories. With this generation, vendors are working to surpass first-generation launches with more integrated designs, reduced power consumption, and more frequencies and network operation modes. There has been considerable talk about cellular access cutting the cables for Industry 4.0. Commercial-grade 5G modules for industrial use cases are expected with the launch of second-generation chipsets. In 2020, we expect growth in the number of fixed wireless devices, with many vendors and models enabling 5G-connected households. Entering the volume market Annual shipments of 5G devices are projected to reach 13 million units by the end of 2019. 5G has clearly outpaced LTE in the number of devices launched during its initial roll-out period. However, 2020 will be a different numbers game. 5G device volumes in 2020 are projected to reach 160 million units, with China expected to massively deploy 5G coverage. In addition, all major vendors will have released a 5G-capable device and a number of vendors are expected to have addressed mid-tier smartphone segments. SA/NSA/FDD/TDD all in play and co-existing In 2020, a typical 5G smartphone will be a very smart device. As many 5G networks are being launched using 5G non-standalone (NSA), this mode will be supported on most new devices along with 5G standalone (SA) mode. In both modes, phones will support: 5G carrier aggregation spectrum sharing low-band FDD and mmWave frequencies (as well as mid-band) In short, 5G is expected to gain scale in 2020, enabled by coverage roll-out and availability of devices. Unlike previous cellular radio access technologies, it appears 5G will not be constrained by a lack of user equipment. First halfSecond half Figure 7: 5G device availability (3GPP) 39GHz (n260) 3.5GHz (n78), NSA 28GHz (n257) 2.6 GHz (n41), NSA 2.6 GHz (n41), SA FDD (n71, n5, n1, n3), NSA 28GHz (n261) 3.5GHz (n78), SA 26GHz (n258) FDD (n71, n5, n1, n3.), SA 3.5GHz (n77,79) High-band (mmWave) 20192020 First halfSecond half Initial device wave First generation Volume device wave Second generation Mid-band (sub 6GHz) Low-band (sub 1GHz) Pocket routerSmartphoneCPE/FWT 9Ericsson Mobility Report | November 2019Forecasts Voice and communication services trends and outlook VoLTE is the foundation for enabling globally interoperable voice and communication services on 4G and 5G devices, providing high-quality services to consumers and business users. Service providers continue to evolve their voice networks to VoLTE-based services. These have now been launched in more than 200 networks in over 90 countries.1 VoLTE services are being deployed using cloud technologies, to enable cost-efficient network operations, easier capacity scaling and faster service deployment. VoLTE subscriptions, estimated at 2.1 billion at the end of 2019, are projected to reach 6.4 billion by the end of 2025, and to account for more than 85 percent of combined LTE and 5G subscriptions. VoLTE will also be the foundation for enabling 5G voice calls, SMS and