Ericsson Mobility Report November 2015: The growth of connectivity and video posted: 18/12/2015
by Simon Frost, Global Head of Media Marketing and Communications at Ericsson
Recently my Ericsson colleague Elisabetta Romano made a striking statement about the media and entertainment industries: The changes over the last 10 years have been greater than the last 60 years combined. If there is need for further evidence of how prescient this statement is, and how rapidly this disruption will fall across the media and entertainment industry, it might just be found in Ericsson's November 2015 Mobility Report. The industry must prepare for a ten-fold increase in mobile data traffic by the end of 2021, overwhelmingly driven by the acceleration of mobile video.
This upward trajectory will be the culmination of almost a decade's worth of rapid growth. Since 2012 there has been a 70 percent increase in the number of consumers who watch video on a smartphone. Furthermore, two thirds of the time teenagers are spending watching TV or video is spent on a smaller screen (tablet, laptop or smartphone). Providers should not underestimate the interest of consumers to adapt to smaller and more novel forms of viewing, as TV Anywhere takes on a whole new meaning.
The Internet of Things will give TV Anywhere a new meaning
We are at the start of the most dramatic shift in mobile video's history. By 2021, Ericsson predicts that there will be 28 billion connected devices globally, each embedded into a wider web that will reinforce the fabric of the Networked Society: an always connected, always accessible world of content. These devices will not only increase in number, but also arrive in increasingly diverse-form factors, delivering fundamental changes to the way that we are able, and choose to watch, share and engage with content and each other.
However, it is as important to recognize that the acceleration of mobile video and connectivity will occur for different reasons and with different outcomes across countries, regions and demographics. Stark trends have emerged from this year's report that anticipate the startling growth in regions that have had restricted mobile video connectivity to date. Overall mobile data traffic is expected to rise at a compound annual growth rate (CAGR) of around 45 percent. The Asia Pacific (APAC) region will have the largest share of mobile data traffic in 2021, with China adding 260 million mobile subscriptions, and a multiplier over the next five years of 10 in mobile data traffic growth. Mobile data traffic in Central Europe and the Middle East/North East Africa (MEA) will increase twelve-fold. Smartphone subscriptions will increase by 1.58 billion in APAC over 2015-2021.
The expected boom in smartphone connectivity is perhaps best evidenced by the current subscription rate: a total of 45 percent of all mobile phone subscriptions (up from 40 percent last year). For the first time, smartphones will surpass subscriptions for basic phones by 2016, and in doing so, will further extend the number of consumers that will have access to video-enabled devices. Penetration in India, Africa, and APAC will play a key role in video businesses' strategies moving forward.
The need for improved services: 5G and LTE
In addition to rapid uptake in emerging markets, advanced markets will continue to see significant demand. This will be caused by multiple device ownership as well as increasing video data usage. The Ericsson November 2015 Mobility Report highlights that there will be 150 million 5G subscriptions by the end of 2021 and LTE subscriptions will total 4.1 billion.
Heavy investment in 5G and LTE is a clear need to meet the demand for high quality TV Anywhere. However, this investment alone will not be enough to ensure that customers continue to experience consistent, seamless and immersive video. Mobile video is forecast to grow by approximately 55 percent annually through to 2021, at which point it will account for around 70 percent of all mobile data traffic, up from 50 percent today. Further innovation is needed across the industry, including in compression technologies and CDNs, to ensure the industry can continue to meet consumer demand for premium quality video across any device.
A reflection on the year
The November 2015 Ericsson Mobility Report affirms the rapid growth in video and mobile connectivity that will shape the industry over the next five years. These changes will occur at a pace that will create unprecedented challenges and opportunities for every sector.
However, the report also reveals a reality that is often overlooked in our rush to forecast and prepare for the intense shifts of the future. This movement has started, and the operators and content providers relying on the smooth delivery of video over mobile infrastructure must face the challenges of this transformation, today. To highlight this actuality, the report reveals that mobile data traffic in Q3, 2015 was 65 percent higher than in Q3 2014, largely driven by increased video consumption on mobile devices.
Unprecedented change
The unprecedented speed and scale of change is reflected, not only in the operations of broadcasters, pre and post-production professionals, and the digital platforms that produce and deliver new media content, but also in the imperative for infrastructure changes to enable this growth and innovation to continue. CDN operators, broadband providers and telecommunications professionals will be heavily impacted by the ubiquitous video trend that is shaping, and being shaped by consumer demand for TV Anywhere. Preparing for and embracing this change starts with owning the right knowledge about where the next five years will take the mobile video industry.
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Ericsson Mobility Report November 2015: The growth of connectivity and video posted: 18/12/2015 
