With few major country exceptions, the number of mobile users isn't growing very fast anymore despite huge network coverage, and the transition to mobile broadband has slowed. Industry dynamism is focused on burgeoning traffic by existing users.
The global mobile business is no longer one of unbridled dynamism. Its spread is massive, but it has yet to fulfill its network potential, and it is no longer closing in on that goal very fast.
The mobile industry body GSMA believes that in 2019 there were 7.2 billion people globally who were in the coverage of mobile networks providing internet connection, which meant that there remained 600 million people who were not. That gap is well down from 1.8 billion people in 2014.
However, of this 7.2 billion within mobile internet coverage, the GSMA believes that nearly half, 3.4 billion, do not use mobile internet.
The number of people using mobile internet is expanding by as much as 250 million a year, but only in a few major countries, first of all India, where it is rising by more than 10% per annum. But overall, the tempo is dropping.
This slowdown in the mobile industry is confirmed by smartphone sales data. The market peaked a couple of years ago and then dropped, although it is expected to rebound this year, according to IDC figures.
4G rules
If the mobile market is tending to solidify around its edges, how much does it differ among its established users?
There are around 5.2 billion people (following the GSMA definition of Unique Subscribers) using mobile service, and allowing for some dongle use, more than a billion of them still rely on feature phones.
A basic level of distinction beyond this would be whether the smartphone is 5G or 4G, 3G not making the cut in terms of its ability to handle a lot of the most popular applications.
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The 5G component is as yet relatively small, as the market is only two years old. However three-quarters or more of the smartphones in use globally are 4G. Within this 4G world we find on some counts a striking homogeneity. On measures of smartphone ownership and data consumption mobile has been a remarkable leveler. Data consumption levels perhaps surprisingly are not so much different around the world, except in Africa.
Excluding Sub Saharan Africa, the 2020 consumption per smartphone was only around three times that in the highest region than in the lowest, according to the latest version of Ericsson's Mobility Report. One measure of how flat the mobile world has become was that the highest data consumption total, of above 20 GB per month, was not in a rich country, but in India.
Differences in ARPU, phone cost and data cost
How do these 'flattened markets' differ one from another?
One measure would be operator ARPU. According to IDC services data, the highest monthly ARPU among countries tracked is around $30 in Switzerland and Canada. The lowest is in India and in Tanzania, at $1.40, so there are big differences between countries.
Another measure is the price of the smartphone that people use. Ownership of a 4G smartphone does not necessarily imply the same kind of 4G smartphone.
The average price paid for a smartphone differs slightly more than the average amount of data consumed by region – by about four to one – the figure in the U.S. was in the first quarter of this year $643, and in Western Europe $588 according to IDC data, while in China it is $454 and in India $176 (all figures retail before sales tax).
But by far the biggest differentiator in mobile markets is cost of data.
Here there remains a massive difference between countries, and moreover an inverse correlation between many wealthy countries and poor ones – often data costs most in countries that are poor, and is cheap in countries that are rich.
According to a recent report by Cable.co.uk, the most expensive data rates are mainly in Africa, with Equatorial Guinea topping the list at nearly $50 for 1 GB of data. Four of the top five rates are in Sub Saharan Africa. The least expensive tier is typically around $0.25 per 1 GB, although Israel is by far the cheapest at $0.05.
Another recent study, by Visual Capitalist, comes up with lower highest prices, but concurs that the highest rates are focused on smaller countries in Africa. It defines the cheapest rates as being in India as well as in Israel. Italy also comes in with very low rates in both studies.
Many of the countries where data is most expensive are either islands with relatively low populations or landlocked countries in Africa. This is quite explicable.
The GSMA said last year that the cost of 1 GB of data had fallen as a share of monthly GDP per capita by around 40% since 2016. This is relatively slow compared to the global growth in traffic and the highest tariffs aren't going to become a whole lot cheaper very soon.
The disparities underline why growth, and the transition from feature phone to smartphone, is slow at the edges of the mobile world. To a certain extent high data rates are a reflection of time lag. It is not so many years ago that data costs what it does now in the most expensive countries, in what are now the cheapest.
Data consumption accelerates
The introduction to this article was how the mobile revolution is slowing, with device sales sagging and network coverage underutilized.
Data consumption however is not showing signs of maturity at all. Today the average usage per smartphone per month according to Ericsson is 10 GB, and in 2026 it will be 33 GB.
At the end of this period Ericsson believes that the speed of increase in data consumption will still be accelerating.
It will come as no surprise to anyone reading this article that mobile data use is growing, but what is less appreciated is how uniform this trend is. Ericsson believes the rate of growth will be similar across all major regions (excluding as before Africa), and that consumption levels will tend to converge.
The burgeoning consumption of data on smartphones is the industry's main dynamic, even if it will continue to be focused on those who already are users now.
Simon Baker is program director for mobile phones and consumer devices at IDC EMEA and a coordinator of IDC global forecasting for the 5G smartphone market. He is a long-time analyst in the mobile phone arena. Please contact him at [email protected]
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.