Ericsson: Data growth is best opportunity for operators to boost profits

Despite the economic turmoil, Ericsson believes that booming data traffic is one of their best opportunities for operators to improve income.

The Swedish vendor said that it remains unconcerned that operators will cap infrastructure capital expenditures, given that data traffic is now translating into higher revenue for operators.

Evidence of this growth comes from Ericsson's latest annual mobile traffic report--a survey based on traffic measurements in wireless networks using the company's equipment. The company recorded a doubling of mobile data traffic in the first quarter this year compared with the same period last year, and expects global mobile data traffic to grow 15 times by the end of 2017.

"Data traffic is proving to be good business for operators, and I'm sure that operators are viewing mobile data as one of their best opportunities to improve revenue and income," said Johan Wibergh, who heads Ericsson's network business unit, told Dow Jones Newswires.

To support this anticipated increase, Wibergh urges operators to replace existing 2G infrastructure with hardware and software that is enabled for high-speed data traffic, as well as increase the overall capacity of their networks. "Of course this development creates a tremendous opportunity for us, as the largest provider of mobile networks," Wibergh said.

Ericcson's head of strategy, Douglas Gilstrap, said that people are seeing access to the internet as a prerequisite for any device. "Operators recognise this business opportunity and are aiming to facilitate this growth and provide good user experience with fast data speeds through high capacity networks," he said in a statement. "Today, around 75 per cent of the HSPA networks worldwide have been upgraded to a peak speed of 7.2 Mbps or above and around 40 per cent has been upgraded to 21 Mbps."

However, the report warns that Western European markets are now fully mature and will benefit from little subscription growth in the coming years. What growth there is in this region will come from a growing connected device market, and a shift towards using HSPA as consumers upgrade their handsets to more advanced models.

Central and Eastern Europe, the Middle East and Africa (CEMA), meanwhile, will show strong subscriptions growth driven by population and GDP growth. HSPA usage will also grow significantly, according to Ericsson.

For more:
- see this Ericsson statement
- see this Ericsson Traffic & Market report
- see this MarketWatch article

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