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Ericsson Mobility Report - June 2015 - North America appendix

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Ericsson Mobility Report is one of the leading analyses of data traffic available, providing in-depth measurements from the world’s largest selection of live networks spread all around the globe.

The report uses those measurements and analysis, together with internal forecasts and other relevant studies, to provide insights into current traffic and market trends in today’s Networked Society.

The June 2015 report looks at global subscription growth and how the pattern is set to continue to 2020.

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Ericsson Mobility Report - June 2015 - North America appendix

  1. 1. NORTH AMERICA ERICSSON MOBILITY REPORT APPENDIX 2015JUNE
  2. 2. 2  ERICSSON MOBILITY REPORT  NORTH AMERICA JUNE 2015 Number of internet connected devices per household in the U.S. in 2014 1 Among U.S. respondents, ages 15–69, surveyed during Ericsson’s ConsumerLab 2014 InfoCom consumer research 10 3 5 7 92 4 6 8 10 >10 99%100% 91% 90% 68% 47% 33% 24% 17% 13% 10% 6% MARKET OVERVIEW Connectivity anytime, anywhere is the expected norm Internet connectivity has reached its 25th year. Mobile devices are now affordable and in ample supply, while mobile networks are keeping pace with the latest networking technologies. Consumers in the U.S. and Canada, alongside other developed markets, have passed the introductory phase of the Networked Society. The pervasive connectivity of people and devices is transforming our lives, including our homes, jobs, health, relationships and more. In 1990, the internet had existed as a public resource for less than a decade, and almost 80 percent of the world’s internet users resided in the U.S. or Canada. Now, 99 percent of households in the U.S. have at least 1 device connected to the internet and nearly 50 percent have 5 devices or more.1 2014 population (million) 2014 households (million) Land mass (millions of square miles) U.S. CANADA TOTAL 319 123 3.7 36 13 3.9 355 136 7.6 Source: Ericsson ConsumerLab (2014) Key figures: North America 2014 2020 CAGR 2014–2020 Mobile subscriptions (million) 380 480 4% Smartphone subscriptions (million) 250 370 5% Data traffic per active smartphone (GB/month) 2.4 14 35% Total mobile traffic (EB/month) 0.8 6 40% 90% of households have at least 3 internet connected devices
  3. 3. NORTH AMERICA JUNE 2015 ERICSSON MOBILITY REPORT  3 Smartphone Consumers in the U.S. and Canada quickly adopted smartphones, tablets and laptops as essential devices. In these markets in 2014, there were 2 smartphones for every household. The majority of consumers in the U.S. (90 percent) say they need a mobile phone, and 64 percent say they use the internet everywhere – indoors, outdoors and in vehicles.1 Connected device adoption in the U.S. (per household) 1995 20052000 20142010 0 20 40 60 80 100 Desktop Laptop Tablet Fixed phone Mobile phone of any kind 1 Among U.S. respondents, ages 15–69, surveyed during Ericsson’s ConsumerLab 2014 InfoCom consumer research 97% of U.S. households have a mobile phone 64% in North America use the internet everywhere Source: Ericsson ConsumerLab (1995–2014) Base: Population aged 15–69 years old, U.S.
  4. 4. 4  ERICSSON MOBILITY REPORT  NORTH AMERICA JUNE 2015 75% of handsets are smartphones GSM/EDGE-only Mobile subscriptions, U.S. and Canada (million) 0 100 200 500 300 400 MOBILE SUBSCRIPTIONS Smartphones Basic phoneMobile PCs, tablets and mobile routers 2018 2019 20202014 20172013 20162012 201520112010 Mobile subscriptions, U.S. and Canada (million) LTE/WCDMA/GSM WCDMA/GSM 0 200 100 300 400 500 2010 201620142012 2018 2020 In 2014, the U.S. and Canada were home to almost 380 million mobile subscriptions, of which nearly 300 million were for smartphones, mobile PCs, tablets and mobile routers. Most of the growth from 2013 to 2014 came from an increase in subscriptions for these devices – a trend which is predicted to continue. By 2020, total mobile subscriptions will approach 480 million, of which smartphone, mobile PC, tablet and router subscriptions will comprise nearly 450 million. This translates to a population penetration rate of almost 125 percent of the nearly 370 million predicted inhabitants in North America in 2020. LTE subscriptions will dominate in the coming years Over 25 percent of all mobile subscriptions in 2013 were LTE, a figure that jumped to around 40 percent in 2014. Over the next five years, mobile service providers will continue to transition customers to 4G networks to deliver new services like VoLTE and enable LTE Advanced features. By 2020, approximately 90 percent of subscriptions will be LTE. Much of this subscription growth will come from an increased number of connected devices per user, rather than the addition of individual new users. In 2014, the average number of connected devices per household in the U.S. was 5.2, and consumer intention to acquire more devices indicates that growth will continue. In addition, 5G will begin to be deployed during the forecast period, with 5G subscriptions becoming commercially available in 2020. 5G usage will be driven to a large extent by new use cases, especially machine-type communications. CDMA-only Other 430 -45 -60 155 Total additions One smartphone subscription per person in 2020 -165 -5
  5. 5. NORTH AMERICA JUNE 2015 ERICSSON MOBILITY REPORT  5 App coverage – a new way of looking at network performance The relative importance of network performance to user satisfaction is higher in the U.S. than the global average, driving 24 percent of overall mobile user satisfaction compared to 19 percent globally.2 With the increased use of mobile applications, Ericsson proposed a new approach to network performance called app coverage. Essentially, every application has its own coverage map, driven by a number of factors. To illustrate, Ericsson analyzed network performance measurements from Speedtest.net to calculate median and cell edge downlink data throughput rates. A good streaming video experience requires a throughput rate of 5 to 10 Mbps. In the U.S. and Canada, a user has a 50 percent probability of receiving 7 to 10 Mbps downlink throughput. Measuring results only on LTE networks, the median throughput is 1.4 times faster in the U.S. and 2.3 times faster in Canada. The benefit of LTE is even more dramatic at the 90 percent probability threshold (a proxy for cell-edge performance), where throughput is 2 times faster in the U.S. and 4 times faster in Canada, when compared to throughput measurements across cellular technologies. However, with greater demand on LTE networks, LTE network cell edge performance continues to decline in both markets. Densification, appropriate network dimensioning and adequate spectrum allocations are required to continue to ensure good app coverage for all users in the entire cell, even after LTE is deployed. MOBILE TRAFFIC By the end of 2020, mobile data traffic in the U.S. and Canada will be close to 6 ExaBytes (EB) per month – or 7.5 times the traffic of 2014. 6 EB is equivalent to about 4.2 billion movie downloads. Aggregate mobile voice traffic will increase slightly over the next six years. Mobile data traffic is forecast to increase at a CAGR of nearly 40 percent from 2014 to 2020. In 2020, mobile networks in the U.S. and Canada will carry more mobile data than the cumulative totals predicted for the 5-year period from 2010 to 2016. Total mobile traffic, U.S. and Canada (monthly ExaByte) Median throughput measurements 20202014 2.4 GB 14 GB 0 1 2 3 4 0 Downlinkthroughput(Mbps) 6 5 25 20 15 10 1 20112010 Q4 2012 Q3 2013 Q2 2014 Q1 2013 Q4 2013 Q3 2014 Q2 2013 Q1 2014 Q4 2014 2012 2013 2014 2015 2016 2017 2018 2019 2020 Mobile data traffic per active smartphone, North America (monthly) 2 Source: Ericsson ConsumerLab, Network Performance study (2013) Source: Analysis performed by Ericsson, based on Ookla’s NetMetrics data from Speedtest.net, 2014 Smartphones accounted for three-fourths of the data traffic in 2014, and as consumers adopt larger form factor phones, smartphones will continue to be the major source of mobile data traffic through 2020. Data usage per smartphone will continue to increase, growing over 5 times between 2014 and 2020. LTE-only Canada All cellular Canada LTE-only U.S. All cellular U.S. 40% CAGR increase from 2014–2020
  6. 6. 6  ERICSSON MOBILITY REPORT  NORTH AMERICA JUNE 2015 100 There is no “typical” mobile user in the U.S. and Canada The burgeoning number of activities performed over mobile networks and devices has resulted in increasingly personal mobile user profiles. Some applications are frequently used by nearly all mobile users, such as SMS and voice calling. Others, such as mobile gaming and music streaming, are used frequently by a smaller number of consumers. Overall, consumers increasingly pick and mix the applications that best meet their unique needs. U.S. and Canadian consumers also have a rising number of choices when it comes to mobile devices. Among smartphone users, household penetration of tablets is higher than 50 percent, and a number of less-traditional connected devices are rising in popularity. Whether consumers prefer their news to be delivered through a smartphone, a tablet or a smart watch, any combination of device, location and time of day is possible. It’s ultimately the consumer’s choice, and this ability to choose is the underlying reason why the U.S. and Canada market segments are increasingly composed of individuals creating their unique mobile experience. As a result, each user becomes their own distinct segment of the market. As mobile usage diversifies to include dozens of tasks over dozens of devices, the consumer mobile-experience needs to change as well. Traditional mobile-experience needs, such as productivity and staying in touch, are joined by the consumer desire to be entertained, to try new things and to have fun. When asked why they downloaded an app to their smartphone, U.S. respondents cited boredom as their motivation nearly as often as they cited the need for a specific function. SEGMENTS OF ONE Occasionally Weekly 1–4 times per daySeveral times per week 5 or more times per day Frequency of application use, U.S. smartphone users Source: Ericsson ConsumerLab, 2014 Base: Smartphone users, ages 15–69, U.S. SMS Voice calls Emails Browse the internet Mobile games Instant messaging Stream music Internet downloads Navigation services Watch video clips Watch movies or TV shows Mobile banking Internet calls Mobile payments Social networking sites 0 40 80 20 60 Smartphone users’ reasons for app downloads, U.S. Source: Ericsson ConsumerLab (2013) Base: Smartphone users, ages 15–69, U.S. 0 40 10 50 30 20 37% of smartphone users download an app to try something new I needed an app that performed a specific function I heard about it and wanted to try it out I was bored and wanted to try something new It helped me get things done on the go It helped me keep in touch more easily
  7. 7. NORTH AMERICA JUNE 2015 ERICSSON MOBILITY REPORT  7 2014 80 Mobility is critical for business Consumer expectations of the businesses with which they interact are affected by anywhere, anytime attitudes. With nearly 90 percent of North American consumers digitally interacting with brands, businesses are looking for ways to improve customer engagement and support.3 Increasingly, this means providing more and better mobile connectivity for their organizations. The figure below shows the results of a survey of mobile high tech business users in the U.S., regarding the kinds of connectivity provided by their employers.4 The relative importance of mobility has changed dramatically in just two years. Around 75 percent of respondents indicated that they have access to a mobile data plan and mobile device from their employer, compared to less than 50 percent in 2012. 2012 U.S. employer provided connectivity Improved outcomes through connectivity Source: Ericsson ConsumerLab, Business Users Go Mobile study (2014) Base: Survey of 750 mobile high-tech business users in the U.S.; representative of 5 million users In fact, 70 percent of the CIOs and CTOs interviewed in the survey felt that mobility was critical to their business. They saw this as a key enabler for quicker response time to clients as well as employee productivity and satisfaction. As consumers increasingly use their mobile devices for researching and buying products, as well as for post-sale activities including bill payment and customer service, the channels of connectivity between businesses and their customers will continue to grow broader and deeper. Fixed internet connection 3G/4G/LTE data plan and smartphone 3G/4G/LTE data plan and tablet Wi-Fi 75% 74% 60% 78% 26% 47% 81% 47% Unwiredw orkforce Transform a tionthroughmobilit y Improved business efficiency and productivity Improved customer and partner engagement 2 years ago less than 50% of employers provided a mobile data plan and device 75% of businesses provide a mobile data plan and device 2014 2012 0 20 40 60 100 3 Source: TNS Connected Life study (2014) 4 Source: Ericsson ConsumerLab, Business Users Go Mobile study (2014)
  8. 8. Ericsson SE-126 25 Stockholm, Sweden Telephone +46 10 719 00 00 www.ericsson.com The contents of this document are based on a number of theoretical dependencies and assumptions and Ericsson shall not be bound by or liable for any statement, representation, undertaking or omission made in this document. Furthermore Ericsson may at any time change the contents of this document at its sole discretion and shall not be liable for the consequences of such changes. The content of this document is subject to revision without notice due to continued progress in methodology, design and manufacturing. Ericsson shall have no liability for any error or damage of any kind resulting from the use of this document. Ericsson is the driving force behind the Networked Society – a world leader in communications technology and services. Our long-term relationships with every major telecom operator in the world allow people, business and society to fulfill their potential and create a more sustainable future. Our services, software and infrastructure – especially in mobility, broadband and the cloud – are enabling the telecom industry and other sectors to do better business, increase efficiency, improve the user experience and capture new opportunities. With approximately 115,000 professionals and customers in 180 countries, we combine global scale with technology and services leadership. We support networks that connect more than 2.5 billion subscribers. Forty percent of the world’s mobile traffic is carried over Ericsson networks. And our investments in research and development ensure that our solutions – and our customers – stay in front. Founded in 1876, Ericsson has its headquarters in Stockholm, Sweden. Net sales in 2014 were SEK 228.0 billion (USD 33.1 billion). Ericsson is listed on NASDAQ OMX stock exchange in Stockholm and the NASDAQ in New York. EAB-15:026351 © Ericsson AB 2015

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