Home5G & BeyondEricsson forecasts 1bn 5G connections by 2023, Europe to lag other regions

    Ericsson forecasts 1bn 5G connections by 2023, Europe to lag other regions


    Europe will continue to lag behind North East Asia and North America into the 5G era, holding only 16 percent of connections by 2023 and consuming an average of 28GB per month.

    The Swedish vendor published its Mobility Report this morning, its annual look at the state of the mobile industry and where it is going.

    The headline figure was a forecast for one billion 5G connections by the end of 2023. Patrik Cerwall, Head of Strategic Marketing, tells Mobile Europe adoption rates could “maybe” be quicker than 4G.

    But as per LTE, Western Europe’s share of 16 percent of connections by the end of the survey period will trail behind its North East Asian and North American cousins, who will hold 34 percent and 37 percent respectively.

    With a degree of understatement, Cerwall says it’s an “interesting time” for the mobile industry but one that will bear fruit if they move quickly. He says:

    “There is what is happening on the consumer expectation side and what we expect on spectrum. We have the World Radiocommunication Conference in 2019 that will be super important for the industry [and allocate 5G spectrum]. But it’s not just waiting for the devices and capabilities. Most of these things will need to be started on today.”

    Given Ericsson’s financial woes and hopes that the technology of the future will turn it around, a cynic could argue it would say that.

    [Read more: Ericsson warns industry will be hit by China slowdown, as struggles continue]

    Recent comments would also suggest encouraging early rollouts of 5G could prove a challenge, with BT Group CEO Gavin Patterson bemoaning the lack of a current business case and Deutsche Telekom Group CTO Bruno Jacobfeuerborn wishing Germany had a high profile event like an Olympics to hang investment upon.

    Cerwall is bullish about the likes of next year’s World Cup and forthcoming Olympic Games and how they will open people’s eyes up to the promise of 5G. He says: “Spending will come when [operators] see the capabilities it enables. These markets will be early and we will see how that impacts on 5G subscriptions.”

    Of course, a World Cup or Olympics is every four years; hardly a frequent enough occurrence to loose the purse strings.

    Meanwhile, LTE will become the dominant technology worldwide by the end of this year, with 2.6 billion subscribers at the end of September 2017 out of 5.3 billion subscriptions of all flavours.

    A quarter of a billion LTE subscriptions lie within Western Europe and will grow at a compound annual growth rate of 10 percent between now and 2023, when it will hit 450 million.

    But growth in the region will remain sluggish, with total mobile broadband subscriptions increasing by a CAGR of three percent to hit 560 million in six years, compared to 470 million today. Smartphone subscriptions will also rise by a CAGR of three percent from 400 million to 480 million.

    These, overwhelmingly Android and Apple, devices will fuel an ongoing surge of data consumption. In 2023, around 12 exabytes of data will be consumed per month, or roughly six billion hours of movie content.

    The average consumer will need 28GB of data per month by the end of the survey period, second behind the US. Today, western Europeans consume an average of 4.1GB.

    The report says: “Across both Western Europe and North America, a combination of high-end user devices, well-built-out WCDMA and LTE networks, and affordable packages that offer large volumes of data resulted in high data usage per subscription.”

    Across Europe’s four biggest markets – France, Germany, Spain and the UK – time spent and data used watching YouTube and Netflix is increasing by at least a double-digit percentage year-on-year, and that’s the most conservative figure.

    The reason? Millennials. Cerwall says operators need to be savvy to their needs as these digital natives are far from happy. The report found less than half of millennial smartphone users said their network performance was “up to scratch”.

    “Within five to 10 years they will have the highest purchasing power and the ones paying the bills,” says Cerwall. “Operators need to ask themselves how do they meet that.”

    Millennials’ usage of devices is staggering, and one operators will have to work hard to meet. Today, 28 percent of millennials stream between one and three hours of television per day. Seventeen percent consume between three and six hours, six times that of consumers aged over 45.

    Cerwall says they will want a network that is “much, much better and much, much cheaper”.

    Meanwhile, the Internet of Things will account for 19.8 billion connected devices by 2023, compared to seven billion today.

    Operators hope cellular IoT can play a pivotal role in this area and Ericsson’s predictions may bring them cheer.

    The vendor said the 500 million cellular IoT devices connected by the end of this year across 20 commercial networks will almost quadruple to hit 1.8 billion by 2023, where it will account for around 75 percent of the wide-area network market. However, the report did not strip out how cellular tech like NB-IoT and LTE-M will compare to unlicensed tech like LoRa or Sigfox.

    Of course, one of Ericsson’s predictions has become infamous in the mobile industry. Former CEO Hans Vestberg made the claim back in 2010 that 50 billion IoT devices would be operating in 2020, a prediction later disowned.

    The issue appears to be “that vision thing”, to quote the phrase used to criticise former US President George HW Bush’s unadventurous approach to power.

    Cerwall says there’s a difference between a far-sighted vision and a closer prediction, once the facts become clearer.

    He says: “[The 50 billion claim] a super good vision but it started to change based on what we were seeing. When you get closer and get the right sources, you see what is really happening. We will reach 50bn at some point but I wouldn’t want to put a date on it. It would be wrong.”