Mobile data traffic to jump tenfold by 2019, video the main catalyst
Indoor coverage important, telcos need to consider advanced solutions
ERICSSON expects LTE (Long-Term Evolution) subscribers to make up about one-fifth of Malaysia’s total mobile user base by 2019, driven by growing demand for data and video.
The figure may seem a bit low given that the smartphone penetration rate has already surpassed the 33% mark, but Todd Ashton (pic), president of Ericsson Malaysia and Sri Lanka, begs to differ.
“Currently, fewer than 2% of mobile subscribers are on LTE. So, to grow the base tenfold over the next five years is a good achievement.
“Of course, there is the possibility that the actual LTE take-up will be significantly higher than 20%. However, that will be dependent on other factors such as availability of spectrum, availability and affordability of LTE devices, price packages, and others,” he said.
Ashton said that Ericsson also expects to see a lot more affordable smartphones, especially those under the US$100 price point, coming into the market over the next few years.
“That will be extremely important to drive the adoption of mobile broadband,” he said.
The growth of mobile broadband, including LTE, will be mainly driven by the increasing demand for data and video.
Ashton said that the demand for data and video, which has already been moving at a fast pace over the past few years, will pick up a few notches over the next five years.
“From 2013 to 2019, we expect global mobile data traffic to grow tenfold. During the same period, we see growth for mobile video traffic growing by 13 times. It’s clear that demand for video will be the main driver for the growth in mobile data traffic,” he said.
Ashton was speaking to Digital News Asia (DNA) in an exclusive interview after a media briefing on the recently released Ericsson Mobility Report, which highlights various trends in the mobile space.
Boosting indoor coverage
Anticipating surges in mobile data traffic and demand for video, mobile operators will be working tirelessly to ensure that their networks are able to cope with customer demand, according to Ericsson.
Ashton said that one of the areas mobile operators would be looking at is improving indoor coverage.
“As more people move into the city (from suburban and rural areas), city populations will get denser. That will have an impact on how operators build their networks. Indoor coverage will play a key role in the way operators design their networks,” he said.
Ashton said that the most economically efficient way to address this issue would be for the telcos to leverage on the existing 'macro network.' However, it doesn’t stop there.
“Next, you must densify it – you build more sites, and add more capacity. After this, you go on the small cell strategy. This means putting in things like WiFi, or in our case, the revolutionary Ericsson Radio Dot System; those type of technologies,” he said.
Ashton also believes that mobile operators, wanting their customers to have a better experience, could look into new technologies like Network Controlled WiFi – an area which local mobile operators have yet to explore.
He said that WiFi sometimes behaves badly. “This phone [pointing to his phone], as soon as it walks to a hotspot that it recognises, it will switch from LTE to WiFi. Maybe that’s not what I wanted, maybe I was in the middle of voice call, or downloading something, and handing over from LTE to WiFi may result in a dropped call or disrupt the download.
“So the emergence of network-controlled WiFi will be important as it will help operators control and optimise the customer experience,” he said.
Malaysia approaching tipping point
Meanwhile, Ashton said that he is seeing rapid smartphone growth in Malaysia, particularly with the youth segment, an important driver for mobile broadband take-up.
According to the Ericsson Mobility Report, more than 90% of youth (age 16-24) are using a smartphone. From that base, more than 70% are using their smartphones for Internet browsing, social networking, text messaging and instant messaging, while 50% to 69% of them use the device to read and reply to emails and to watch video clips.
“In terms of mobile broadband user behaviour, what we see in Malaysia is similar to what we see in Singapore and Australia. Malaysia tends to behave like a more advanced market, and the thing is, it applies across both East and West Malaysia.
"We don’t see major differences between these two areas in terms of demand for mobile broadband,” he said.
He also said that Malaysia, which has a mobile penetration rate of over 140%, is now approaching the tipping point of becoming a data-centric service provider market.
This means that packages and services offered by mobile operators or telecommunications service providers in the country will be “more data-centric and digital-centric”, said Ashton.
In fact, in developed markets like the United States and Europe, service providers are now looking at “average revenue per account” as opposed to the currently popular average revenue per user (ARPU) metric, he said. This is to reflect the increasing trend of one user with multiple devices.
“That kind of pricing hasn’t come to Malaysia yet, but things like that might be in the works. I think that will drive take-up even more. That’s why I say we are at a tipping point – exactly what will trigger it, I don’t know,” Ashton acknowledged.
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