According to telephone equipment maker Ericsson, mobile data traffic is likely to double every year until 2018, pushing new investments in networks segment. Ericsson in its latest Mobility Report says the growth in smartphone and tablet PCs have helped switch in traffic in telecoms networks from voice calls to mostly video and music which now take up more capacity.
Experts believe the growing smartphone and tablet sales will prompt operators to invest in 4G networks, which is considered to be speedier and have more capacity. Ericsson hopes a speedy growth in 4G networks, which help deal with surge in data traffic.
“LTE is the fastest-developing system in the history of mobile communications in terms of buildout and uptake. LTE is currently being deployed and built out in all regions, and total subscriptions will increase from around 55 million at the end of 2012 to an estimated 1.6 billion in 2018. WCDMA/HSPA networks currently provide coverage to more than half the world’s population and continue to grow faster than LTE in terms of absolute numbers, adding 65 million subscriptions in Q3 2012 compared with 13 million for LTE,” says the Ericsson report.
The report predicts there will be around 6.6 billion mobile subscriptions by end of this year. Subscriptions for data-heavy device such as PCs and smartphones are expected to grow almost double to around 4 billion by 2018, while smartphone subscriptions will be up to 3.3 billion from 1.1 billion estimated by end of this year.
The report also points out that data traffic has been growing but operators haven’t succeeded in paying customers much extra mainly due to the global downturn. The failure to squeeze revenues has most hurt equipment suppliers, already grappling with fierce competition and commoditization of network products.
Douglas Gilstrap, Senior Vice President and Head of Strategy at Ericsson, says: “Expectations of mobile-network quality have been elevated by the availability of smartphones and tablets that have changed the way we use the internet. Mobility is becoming an increasingly significant part of our daily lives; we always have devices within arm’s reach, allowing us instant access to information, entertainment and social interaction.”
Ericsson says sales at its network unit slumped to 17 percent in the third quarter, while it plans to lay off 1,550 staff to bring down costs. Other companies have been facing similar downturn. According to reports, Nokia Siemens Networks is slashing a quarter of its staff to save 1 billion euros ($1.28 billion) in cost by the end of next year.
Check out the full Ericsson’s Mobility Report here.
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