As mobile technology has evolved over the past 2-3 decades, each generation of tech has helped mobility leapfrog and enabled a paradigm change in the way people and devices connect with each other. Today, that ‘how’ in connectivity is driven by ‘data and video’ as compared to just voice a few decades earlier. In India, data is increasingly generating far more traffic than voice calls and video streaming on smartphones has become the new frontier – be it watching live broadcasts, social media videos, and professional content.
Tremendous growth in data traffic
The past 8-12 months have seen unprecedented growth in the Indian telecom industry. Ericsson’s Mobility Report 2017 points out that during Q1 2017, India added over 43 million subscribers, followed by China with over 24 million and Indonesia with over 10 million subscribers. Driven by fast-paced smartphone adoption, changing user behaviour, and disruptive pricing strategies of operators, data traffic per smartphone user in India will grow to 11 GB per month by 2022. The total mobile data traffic in India is expected to grow at a CAGR (compound annual growth rate) of around 40 per cent, reaching almost 8 exabytes (EB) of data per month compared to around 1 EB of data consumption by the end of 2016. Increased distribution and consumption of video and multimedia services, as well as the growth in mobile banking transactions and digital payments, are also fuelling the data traffic in the country. By 2022, 97 per cent of mobile data traffic will be smartphone traffic.
Changing user behaviour
Growing smartphone penetration and rapidly changing data consumption patterns have brought increased attention on network performance. Indian smartphone owners have devised their own mental indicators to measure and evaluate network performance. The top four indicators consumers use to judge network performance in India include:
1. Time taken to upload pictures on social media
2. Time taken to open a web page
3. Time taken for a video to buffer or load
4. Download time for email attachments
An Ericsson study found that 4G users are nearly 1.5 times more satisfied than 3G users in India and their usage behaviour is skewed towards data centric services. In fact, for 40 per cent of 4G users in India, video loading and video buffering while streaming is the main index by which they judge network performance. The pricing and go-to-market strategies used by telecom operators reflect this trend, as they shift from voice call tariffs to data-driven pricing.
This study, focused on smartphone users in India, interestingly reflects that mobile broadband experience is five times more effective in driving customer loyalty as compared with pricing and tariff structures. With new apps coming in everyday, data consumption patterns have become increasingly dynamic. From an operator’s point of view, they need to invest in network performance to ensure a seamless experience for their customers.
Technology shift for future growth
In 2018, at a global level, LTE (4G) will overtake GSM as the largest access technology by number of subscriptions. The speed with which this technology has been rolled out and adopted is unprecedented. It has taken only five years for LTE to cover 2.5 billion people, compared to eight years for 3G. In the first quarter of this year alone, 250 million new LTE subscriptions were added. Even in India, LTE and WCDMA/HSPA technologies are together expected to represent 85 per cent of all Indian subscriptions by 2022. As further 4G roll-outs happen in the country, it will continue to be driven by demand for improved user experience and faster networks. VoLTE is already available in India in pockets. Given the operators’ focus and the inherent efficiencies that VoLTE drives, we estimate that there will be around 370 million VoLTE subscribers in India by 2022.
Going ahead, 5G deployment will be driven by the need for enhanced mobile broadband capabilities as well as industry solutions for efficiency and automation. Also, 5G will support a diversity of use cases. Ericsson’s latest Mobility Report pegs 5G subscriptions in 2022 to be around 500 million, not including IoT connections. By then, 5G is expected to cover around 15 per cent of the world’s population.
IoT and 5G outlook in India
As of 2016, there were 23 million IoT connections; by 2022, this is estimated to reach 191 million. Driving this growth is the government’s Digital India vision, its focus on smart cities and villages, new use cases for IoT, and the launch of 5G. Forecast to be available in India only in 2022, 5G subscriptions should be touching the 3 million figure by that time. In my view, mobile broadband will be the platform on which Digital India will be delivered.