For the next six years there will be more than a million new mobile broadband subscribers every day, as forecast by Ericsson. However, the company has been struggling to demonstrate equivalent growth. Ericsson is re-organising its broadcast and media services division, which is effectively on the market as the company explores strategic opportunities and doubles down on its core network business.
Ericsson predicts that the number of mobile broadband subscribers will rise by 2.6 billion to reach around 9 billion by the end of 2022. That is more than the predicted population of the planet. Some people will have more than one subscription.
The Ericsson Mobility Report predicts that global monthly mobile traffic will increase to eight times its current level by 2022.
Mobile video traffic is forecast to grow by around 50% a year through to 2022, to account for around 75% of all mobile data traffic, compared to 50% in 2016, of which 40-70% is from YouTube, depending on region.
Ericsson invested heavily in television and video on the assumption that it would drive usage of fixed and mobile networks. Video continues to drive mobile traffic in any case, but Ericsson now faces strong competition from companies like Huawei.
Earlier in 2017, Ericsson split its media business into two units. Ericsson Media Solutions includes media processing and delivery systems, while Ericsson Broadcast and Media Services provides playout and related services, supporting channels for all the public broadcasters in the United Kingdom.
The heads of both units are now moving on. Elisabetta Romano is staying within Ericsson, but Thorsten Sauer, who headed broadcast and media services, is leaving the company. He will be replaced by Steve Nylund, previously head of global services operations for Ericsson.
Either or both units could now be up for sale, following a strategic review after the replacement of Ericsson chief executive Hans Vestberg, who had supported the move into media, while the core network business faced increasing competition from companies like Nokia and Huawei.
The Ericsson broadcast and media services business has playout contracts with the BBC, ITV, Channel 4 and Channel 5. Ericsson acquired Red Bee Media, the former BBC Broadcast division, in May 2014, after clearance from the Competition Commission, having previously purchased the broadcast services business of Technicolor, which provided playout for ITV. Ericsson also acquired the playout centre of the Dutch broadcaster NOS.
There is much speculation about a possible partner or purchaser for the media services business. A competing playout provider like Deluxe is one scenario, but a global technology or professional services company is another option, as is a private equity partner. A move from a company like Amazon or Google is an intriguing possibility that would put them at the heart of the television and video business in the United Kingdom.
Any deal is likely to be complicated by change of control clauses in contracts with broadcasters, who would have an opinion on a potential partner or purchaser. While outsourcing services to a major multinational like Ericsson may have provided some comfort to broadcasters, the prospect of a more radical alternative could be transformative.
The Ericsson Mobility Report is available for download from the Ericsson web site, where there is also an interactive tool for forecasting traffic usage by type, device and region.