Ericsson has released the Ericsson Mobility Report 2017, which highlights key trends and forecasts relating to mobile traffic, subscriptions, consumer behaviour and technology uptake globally as well as in India. As per the report, India’s mobile subscriptions crossed the 1.2 billion mark in January 2017 and are estimated to increase by 4 per cent every year to exceed 1.4 billion in 2022. The entry of a greenfield 4G operator in 2016 triggered a surge in data uptake and intensified competition in 4G services. Further, growing smartphone penetration and rapidly changing data usage patterns have put the spotlight on network performance, which, in turn, is playing an important role in driving user loyalty to mobile operators.
A look at the report findings and forecasts…
Changing technology mix
GSM continued to remain the dominant technology in 2016, accounting for over 70 per cent of total mobile subscriptions. However, the number of GSM subscriptions has decreased since 2015 and are expected to be surpassed by WCDMA/ HSPA in 2020. Long term evolution (LTE) and WCDMA/HSPA technologies are expected to together represent 85 per cent of all Indian subscriptions by 2022. 5G subscriptions are forecasted to become available only in 2022, accounting for 0.2 per cent of the total mobile subscriptions.
As of 2016, there were 23 million cellular internet of things (IoT) connections, and this figure is estimated to reach 191 million by 2022. The growth will be driven by the government’s Digital India initiative, its focus on smart cities and villages, new use cases for IoT, and the launch of 5G.
Growing smartphone adoption
In 2017, smartphone subscriptions are expected to represent around 30 per cent of all mobile subscriptions in India. This number is expected to reach over 60 per cent in 2022. By that time, smartphone subscriptions are expected to reach 890 million and data traffic per smartphone is expected to reach almost 11 GB per month. One of the key drivers of this growth will be increased smartphone penetration in rural areas.
Huge data appetite
The first quarter of 2017 registered a strong growth in subscription, mainly due to attractive data offers from operators. Increased distribution and consumption of video and multimedia services are also playing a role, as is the growth in mobile banking transactions and digital payment systems. At end-2016, 94 per cent of mobile data traffic comprised smartphone traffic. By 2022, this number will be around 97 per cent. Between 2016 and 2022, the total mobile data traffic is expected to grow at a compound annual growth rate of around 40 per cent, from 1 exabyte (EB) per month to almost 8 EB. This growth will be driven by fast-paced smartphone adoption, changing user behaviour and disruptive pricing strategies. Further, the monthly data traffic per active smartphone is expected to more than double, from 4 GB in 2016 to almost 11 GB in 2022. Monthly data usage from other devices will also grow steadily, increasing from a total of 60 petabytes (PB) in 2016 to 226 PB in 2022.
Data generating more traffic than voice
Telecom consumer behaviour is moving towards higher data consumption. From streaming videos to using social media or chat-driven apps, data is expected to be the key growth driver in the telecommunications industry in the years to come. Interest in video streaming is growing and the ability to watch live broadcasts of user-generated and professional content on existing apps has also increased the appeal of live streaming. The pricing and go-to-market strategies used by telecom operators reflect this trend, as operators shift from devising voice call tariffs to data-driven pricing. Increasingly, data is generating far more traffic than voice calls.
By 2022, the voice over LTE (VoLTE) subscriber base in India is pegged to reach 370 million. According to Nitin Bansal, head, network products, Ericsson India, “VoLTE presents a great opportunity for operators in India, who are looking to route voice calls over 4G LTE networks, enabling a lower cost per minute for voice calls and freeing up legacy spectrum bands for refarming.”
Improved time-to-content and upload performance
With changing usage patterns, smartphone users have devised their own mental indices to measure and evaluate network performance. These include time taken to upload pictures to social media, time taken to open a web page, time taken for a video to buffer or load, and download time for email attachments.
The indicators of network performance differ between 4G and 3G users. For 40 per cent of 4G users, video loading and video buffering while streaming is the main index. For almost half (48 per cent) of 3G users, the time taken to load a web page is the prime indicator of a positive experience.
Consumer loyalty and connectivity
The mobile broadband experience in India is five times more effective in driving loyalty than tariff structure and pricing. “As new apps continue to emerge and usage behaviour evolves, network performance will play an even bigger role in determining smartphone users’ loyalty towards their operators,” says Bansal. Connectivity issues such as lack of coverage, voice call drops and poor quality video calls have an impact on the consumer’s loyalty and intention to stay with the operator.