Ericsson announced the release of its flagship Mobility Report last week with interesting consumer trends and India specific data points.
By Sudhir Chowdhary
Ericsson announced the release of its flagship Mobility Report last week with interesting consumer trends and India specific data points. The total number of mobile subscriptions in Q3 2015 was around 7.3 billion, including 87 million new subscriptions. Global mobile subscriptions are growing around 5% year-on-year. “India grew the most in terms of net additions during the quarter (+13 million), a place where more than one new mobile subscription is activated every second,” Peter Jonsson, strategic project manager for Ericsson Mobility Report, tells Sudhir Chowdhary in a recent interaction.
Excerpts:
Can you take us through the salient points of the report with regards to mobile subscription growth in Q3?
The total number of mobile subscriptions in Q3 2015 was around 7.3 billion, including 87 million new subscriptions. Global mobile subscriptions are growing around 5% year-on-year. India grew the most in terms of net additions during the quarter (+13 million), followed by China (+7 million), the US (+6 million), Myanmar (+5 million), and Nigeria (+4 million). In other words in India, more than one new mobile subscription is activated every second.
The number of mobile broadband subscriptions is growing globally by around 25% year-on-year, increasing by approximately 160 million in Q3 2015 alone.
Why is there a surge in mobile subscription in India?
The continued rise in mobile data traffic around the world, including India, is due to attractive data plans and the increased availability of affordable smartphones and tablets that make it easier to access mobile data services. Another key driver to rising mobile data usage among Indian consumers is the growth of video consumption on mobile devices, at home and on the go. ConsumerLab studies carried out in 2014 indicate that the emerging trend of viewing videos on mobile devices has led to consumers spending more time on their smartphones than watching TV. Indian smartphone users now spend 191 minutes per day on smartphones compared with 128 minutes in front of TVs.
The report also talks about smartphone switching behaviour, what are some of the trends around that?
Around 1.3 billion smartphones were sold during 2014, and smartphone subscriptions are expected to grow at an annual rate of 10% upto 2021. Around 80% of Android and iOS users are loyal to their operating system, choosing to stay with it when upgrading to a new model. In some mature markets, as many as 60% of iOS smartphone owners that switched to the newly launched model had devices that were only a year old. Android and iOS currently dominate the smartphone market with worldwide market shares of around 80% and 15% respectively in 2015.
Are switch patterns impacted by yearly iOS device release cycles?
Yes, the regular launch of new iOS smartphones every September causes significant temporal fluctuations in device switching patterns. In the two weeks after the launch of new iOS smartphone models, switching rates of iOS users increased drastically. The iOS loyalty rate increased from 73 to 93%. In contrast, for the same period, Android loyalty numbers dropped from 82 to 76%. Twice as many Android users switched to new iOS models than before the launch of the new models.
Do you see a fluctuation in data consumption after smartphone model upgrade?
Yes, average data consumption increases between 20% and 45% per subscription after smartphone model upgrades. The growth in data consumption was higher in less advanced markets and in device categories with longer device life cycles. It was lower in advanced markets with shorter device life cycles.
Going forward, what is the your outlook on mobile traffic?
We expect total mobile data traffic to grow at a CAGR of around 45%. The growth in mobile data traffic is due to both the rising number of smartphone subscriptions, in particular for LTE smartphones, and increasing data consumption per subscriber. This is forecast to result in a ten-fold increase in total traffic for all devices by 2021.
There are large differences in subscribers’ data consumption patterns between networks, markets and subscriber segments. Factors such as data plans, user device capabilities and network performance all impact data consumption per subscriber. We expect an 11x growth in smartphone traffic between 2015 and 2021. Around 90% of mobile data traffic will be from smartphones by the end of 2021. In the next 5 years, monthly smartphone data consumption per active subscription in North America (22 GB) will be 1.2 times that of Western Europe (18 GB) and 3 times that of Asia Pacific (7 GB).
However, the Asia Pacific region will have the largest share of total smartphone traffic in 2021, due to growth in the number of subscriptions. Asia Pacific will generate 40% of total smartphone traffic by the end of 2021.