The year 2020 will go down in history as one that saw widespread global disruption, caused by a pandemic that has shaken every economy and significantly impacted everyday life. While countries may have differed in their approaches to containing the virus, all of them face a future with irreversible changes in the ways that we live and work. In retrospect, 2020 will probably also be known as the year when society as a whole took a giant leap forward in our digitalisation journey. The fundamental need for good connectivity is the cornerstone of this change, as indicated in the recent edition of the Ericsson Mobility Report.
The report estimates that by the end of 2020, more than 1 billion people (about 15 per cent of the world’s population) will live in an area that has 5G coverage. In 2026, 60 per cent of the world’s population will have access to 5G coverage, with 5G subscriptions forecast to reach 3.5 billion. Further, Ericsson has raised its year-end 2020 estimate for global 5G subscriptions to 220 million as service providers continue to build out their networks.
In India, 5G will represent around 27 per cent of mobile subscriptions at the end of 2026, as noted by Ericsson in the report. Meanwhile, long-term evolution (LTE) will continue to be the dominant technology in India in 2026, accounting for 63 per cent of mobile subscriptions. Mobile broadband technologies are predicted to reach 91 per cent of the total mobile subscriptions by 2026 from the current 67 per cent.
Further, as per the report, the average monthly mobile data usage per smartphone in India continues to show robust growth, supported by the rapid adoption of 4G and people working from home during Covid-19. The reliance of people on their mobile networks to stay connected as well as work from home during Covid-19 has contributed to the average traffic per smartphone user increasing from 13.5 GB per month in 2019 to 15.7 GB per month in 2020. It is expected to further increase to around 37 GB per month in 2026.
Growth and outlook – India and the world
Today, there are around 7.9 billion mobile subscriptions across the world. However, the net addition of mobile subscriptions has been low at 11 million during the third quarter of 2020. This can be attributed to the pandemic and associated lockdown restrictions. Ericsson forecasts 8.8 billion mobile subscriptions by the end of 2026. (The outlook has been slightly adjusted downwards, as multiple and inactive subscriptions are being removed.) Of these, 91 per cent will use mobile broadband. Meanwhile, the number of unique mobile subscribers is projected to be 6.4 billion by the end of the forecast period.
Smartphone penetration continues to rise, and subscriptions associated with smartphones account for about 75 per cent of all mobile phone subscriptions. At the end of 2020, it is estimated that there will be 6.1 billion smartphone subscriptions. This number is forecast to reach 7.5 billion in 2026, which will account for around 85 per cent of all mobile subscriptions at that time.
In India, the number of smartphone subscriptions has increased to 760 million in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 7 per cent to reach close to 1.2 billion by 2026.
The spread of Covid-19 continues to impact all parts of society. Despite the uncertainty caused by the pandemic, service providers continued to switch on 5G, and more than 100 providers have now announced commercial 5G service launches. The first 5G stand-alone (SA) networks have also been launched.
5G subscriptions with 5G-capable devices grew by around 50 million during the third quarter of 2020 to reach around 150 million. A total of 220 million 5G subscriptions are expected by the end of 2020. This is mainly due to faster uptake in China, driven by a national strategic focus, intense competition between service providers, and more affordable 5G smartphones from several vendors.
The report forecasts 3.5 billion 5G subscriptions globally by the end of 2026, accounting for around 40 per cent of all mobile subscriptions at that time. However, LTE will remain the dominant mobile access technology by subscription over the forecast period.
5G will represent around 27 per cent of mobile subscriptions in India at the end of 2026, with about 350 million subscriptions.
During the third quarter of 2020, LTE subscriptions increased by approximately 70 million to reach 4.5 billion, amounting to 57 per cent of the total mobile subscriptions. It is projected to peak in 2021 at 4.8 billion subscriptions and decline to around 3.9 billion subscriptions by the end of 2026 as more subscribers migrate to 5G.
In India, LTE subscriptions are forecast to rise from 710 million in 2020 to 820 million in 2026, increasing at a CAGR of 2 per cent. LTE remains the dominant technology in 2020, accounting for 63 per cent of mobile subscriptions, and it will continue to do so in 2026, with 3G being phased out by that time.
Mobile data traffic
Mobile network data traffic grew by 50 per cent between the third quarter of 2019 and the third quarter of 2020. In the second quarter of 2020, the year-on-year traffic growth rate remained at a more normal level of around 50 per cent, compared to the extraordinary peak in 2018 and the first part of 2019. The quarter-on-quarter growth for the third quarter of 2020 was 10 per cent. Globally, the growth in mobile data traffic per smartphone can be attributed to three main drivers: improved device capabilities, an increase in data-intensive content and more data throughput from subsequent generations of network technology.
Covid-19-related restrictions such as lockdowns and constraints on movement continue to be reflected in people’s communication patterns. However, mobile traffic and mobility are gradually returning to normal levels. In many countries, mobile traffic has, to a certain extent, shifted geographically from public and office locations to homes and remote work locations. Some countries have seen an increase in mobile broadband data traffic, while others have experienced a decline, supported by Wi-Fi offload in homes with good fixed broadband connections. These traffic patterns could change again if new waves of Covid-19 occur.
In India, traffic growth has continued on an upward trajectory and it remains the region with the highest monthly usage per smartphone at 15.7 GB. Low prices for mobile broadband services, affordable smartphones, and the increased time spent by people online have all contributed to the monthly usage growth in the region. Total traffic is projected to quadruple, reaching 35 EB per month in 2026. This comes from two factors: high growth in the number of smartphone users, including growth in rural areas, and an increase in average usage per smartphone. An additional 390 million smartphone subscriptions are expected in India during the forecast period, taking the total number to close to 1.2 billion in 2026.
Global total mobile data traffic is estimated to reach around 51 EB per month by the end of 2020 and is projected to grow by a factor of around 4.5 to reach 226 EB per month in 2026. This data will be consumed by more than 6 billion people using smartphones, laptops and a multitude of new devices at that time.
Over the long term, traffic growth will be driven by both the rising number of smartphone subscriptions and an increasing average data volume per subscription, fuelled primarily by the growing popularity of video content. Video traffic currently accounts for 66 per cent of all mobile data traffic, a share that is forecast to increase to 77 per cent in 2026.
Smartphones continue to be at the epicentre of this development as they generate most of the mobile data traffic – about 95 per cent today – a share that is projected to increase throughout the forecast period. Populous markets that launch 5G early are likely to lead traffic growth over the forecast period. By 2026, we expect that 54 per cent of the total mobile data traffic will be carried by 5G networks.