Ericsson CEO: 90% of network traffic will be video

BARCELONA, Spain—Infrastructure vendor Ericsson (NASDAQ:ERIC) kicked off the 2013 Mobile World Congress trade show with some bold predictions, including the forecast that 90 percent of network traffic will be video.   

CEO Hans Vestberg told an audience of media and analysts at the company's media briefing today that he expects video will one day dominate all mobile broadband traffic and that one of the biggest challenges for the industry is figuring out how to monetize that traffic and make it efficient for customers.

Vestberg also predicted that by 2018 there will be 6.5 billion mobile broadband subscribers up from 500 million as of the end of 2012.

According to an Ericsson Mobility report from November, video currently makes up 25 percent of all smartphone traffic on the network and 40 percent of tablet traffic. The infrastructure company said at the time that it expects video will continue to cause data traffic on mobile networks to surge, estimating that it will grow at a compounded annual growth rate of around 50 percent between 2012 and 2018.

Vestberg noted that as of the end of 2012 15 percent of customers globally had smartphones.  He  predicted that by the end of this year, 50 percent of all phones shipped will be smartphones. "All this leads to a networked society," he said. "Anything that benefits from being connected will be connected."

Of course, as the largest infrastructure provider Ericsson stands to benefit from these wireless growth estimates. Vestberg noted that 40 percent of all smartphone traffic currently resides on Ericsson networks. 

Vestberg also used the media briefing as an opportunity to tout his company's BSS/OSS offering, noting that unless operators invest in OSS/BSS platforms they will be unable to deliver  a compelling business case for all this video traffic.  Ericsson has been expanding its services and OSS divisions both organically and through various acquisitions including ConceptWave and Telcordia.

Interestingly, Vestberg also announced the launch of the new AIR 32, an antenna integrated radio that lets operators launch LTE and HSPA without deploying additional antennas or remote radio units.  Vestberg noted that the AIR 32 enabled up to 70 percent higher throughput and up to 25 percent better indoor coverage.

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Hans Vestberg, President and CEO, Ericsson - Most Powerful People in Wireless