STOCKHOLM Swedish telecoms network gear maker Ericsson raised its forecast for mobile data traffic, in a further boost to companies that benefit from rising numbers of consumers viewing online videos on platforms such as YouTube and Netflix.
Ericsson, the world's top mobile network equipment maker, expects a tenfold surge in mobile data traffic globally between 2015 and 2021 as the number of smartphone subscriptions rise. In its mobile industry report in June it forecast that growth would be eightfold between 2014 and 2020.
Inge Heydorn, fund manager at Sentat Asset Management, which invests in telecom and IT shares globally, said Ericsson is aiming to attract telecoms operators to invest in its networks by showing how much data traffic is expected to grow.
Heydorn said the inexorable rise in mobile data benefits telecoms operators more than it does Ericsson, which reported a 7 percent drop in sales this year despite the growth in smartphones.
But content providers, such as Netflix, Facebook and YouTube owner Google are the biggest winners from the increase in data traffic, he added.
Ericsson last week trimmed its market growth forecast for the next few years, indicating no clear correlation between mobile traffic and telecoms operators' investments.
"Technology development and price pressure move faster than the increase in data traffic," said Bengt Nordstrom, head of telecoms consultancy Northstream.
YouTube accounts for up to 70 percent of all video traffic in many mobile networks, while Netflix's share of video traffic can reach up to 20 percent in markets where it is available, Ericsson said.
Video is expected to grow by around 55 percent annually through 2021, increasing its share of total mobile traffic in 2021 to 70 percent, up from around 50 percent in 2015, Ericsson said.
In it twice-yearly Mobility Report, Ericsson said it expected there to be 6.4 billion smartphone subscriptions globally by the end of 2021, up from 3.4 billion in 2015, due to greater affordability in developing markets.
It repeated its expectation that fifth-generation mobile telephony, which will facilitate self-driving cars, will be commercially deployed in 2020.
"In 2021, South Korea, Japan, China and the U.S. are expected to have the fastest uptake of 5G subscriptions," Ericsson said, predicting 150 million 5G mobile subscriptions by 2021.
The new generation of mobile phone technology is expected not only to bring higher data speeds, but also to better accommodate a wide variety of connected devices.
(Reporting by Olof Swahnberg; editing by Louise Heavens)