US and European smartphone users are expected to increase data usage by 7-8 times by 2023. Mobile video viewing is in large part responsible. Operators are encouraging the behavior by bundling and zero-rating their video services.
Worldwide video driving increased mobile data usage
Ericsson’s latest Mobility Report shows continued strong worldwide growth in the consumption of mobile data. Q3 2017 saw data used increase 10% quarter-over-quarter (QoQ) and 65% year-over-year (YoY.)
Video viewing continues to drive the high growth rate of mobile data consumption. Ericsson says that 55% of the 14 Exabytes per month is video. The company expects it to grow at a compound annual growth rate (CAGR) of 48% through 2023, to reach 75% of 110 Exabytes.
The next fastest-growing category is social media. Ericsson expects traffic due to sites like Facebook and Snapchat to grow at CAGR of 34% through 2023. Audio streaming will also continue to grow strongly, at 32% CAGR through the same period.
Northern American smartphone consumption up 7X through 2023
North America will continue to lead in the consumption of smartphone data. Ericsson says the average smartphone customer will be using 7.1 Gigabytes per month by the end of 2017. By 2023, the company expects almost a 7-times increase, to 48 GB per month.
The rollout of 5G wireless services, which Ericsson anticipates starting in 2019, will be a major driver of this growth in usage. 37% of mobile subscriptions will be to 5G plans by 2023. The increased capacity and throughput of 5G networks should allow operators to offer more unlimited data plans with fewer strings attached.
Another major growth factor is the increasing proclivity of wireless operators to bundle video services and allow customers to stream them at no data cost. This practice is not only liable to continue but also likely to expand. Double and triple-play bundles of voice, video, and data have proven extremely effective churn reduces for broadband operators like Comcast. Wireless operators are adopting the same strategy. AT&T’s aggressive bundling of DirecTV Now with wireless plans is, in large part, why DirecTV Now was able to reach the 1 million subscriber mark so quickly. This success is liable to encourage other operators to step up their video bundling efforts.
Western European monthly consumption increases 8X through 2023
Western Europe is the region driving the second highest smartphone data consumption. The average smartphone user will be consuming 4.1 GB per month by the end of the year. An almost 8-times increase through 2023 will result in average usage climbing to 28 GB per month.
5G rollout is less of a factor in Europe than in the US. Ericsson says just 16% of mobile plans will be 5G by 2023. However, LTE rollout will be a much bigger factor in the growth in data and video usage. LTE subscription plans will grow from 48% of plans today to 81% in 2023.
Another factor helping to lift European usage is the removal of roaming restrictions between countries in June 2017. EU citizens can continue to use their smartphones as they do at home throughout the 28-member states without incurring any roaming charges. There are already signs this is causing an increase in usage. Although the average person still uses less data when traveling in the EU, they are using 5-times more than they did before. Moreover, 34% exceeded their daily domestic use while on holiday.
Why it matters
Mobile data consumption will increase 8-times by 2023, with video absorbing three-quarters of all the bandwidth.
North American smartphone users will increase video consumption dramatically through 2023 driven my wireless operators adopting the same video, voice, and data bundling tactics as cable operators.
European smartphone users will also increase video consumption dramatically driven by LTE rollout and the elimination of mobile roaming charges throughout the EU.