The Internet of Things (IoT) is expected to surpass mobile phones as the largest category of connected devices in 2018.

1. ERICSSON MOBILITY REPORT
NORTH
EAST ASIA
2016JUNE

2. 2 ERICSSON MOBILITY REPORT NORTH EAST ASIA JUNE 2016
North East Asia has witnessed astonishing levels of
economic growth since the late 20th century. China, for
example, has experienced near double-digit economic
growth over the last decade, transforming the country
into the world’s second largest trading nation.
Today, however, economic growth in North East Asia has
slowed, and the region’s overall economic conditions are
weak. To ease this tension, the prospective trilateral free
trade agreement between China, Korea and Japan has been
under discussion to open a new chapter of cooperation
and prosperity in North East Asia, and to create a more
sustainable high-tech and service-led economy structure.
In Mainland China, LTE networks have scaled up rapidly,
and many LTE devices have since been launched.
Currently, Mainland China is the largest LTE market in
the world (in terms of subscriptions), surpassing the US
in 2015. All operators plan to commercialize Voice over
LTE (VoLTE) in 2016–2017, with China aiming to cover the
entire population via 4G by 2018. The country also initiated
5G tests in 2015, with the ambition to launch 5G networks
in 2020.
In Japan, all operators have launched LTE Advanced with
carrier aggregation functionality in a move to improve user
experience. There is also a push from the Ministry of Internal
Affairs and Communications (MIC) to reduce smartphone
subscription prices in order to increase smartphone
penetration among less affluent users.
Market Overview
The North East Asia region consists of Mainland
China, Japan, South Korea, Taiwan, Hong
Kong and Macau. With 1.6 billion inhabitants,
this region represents 22 percent of the
world’s population. Mainland China and Japan
are currently the second and third largest
consumer markets in the world after the US
In Korea, operators continue to evolve mobile connection
speeds. The Ministry of Science, ICT and Future Planning
(MSIP) reports that the average LTE download speed in
Korea was 118 Mbps at the end of 2015 – almost 4 times
faster than in the US and Europe. Following the deployment
of tri-band carrier aggregation of LTE-Advanced, the country
now has the fastest mobile network service worldwide.
In the coming years, North East Asia is set to host three
Olympic and Paralympic Games: Pyeongchang, Korea, in
2018; Tokyo, Japan, in 2020; and Beijing, China, in 2022.
Mobile operators in the region are focusing their 5G launch
efforts around these events.1
The region is a useful testing
ground for new telecom technologies, such as 5G, with
deployments taking place in ultra-dense areas – both in
terms of data volume and the number of subscribers.
Operators in North East Asia are paving
the way to 5G in the run up to three
Olympic and Paralympic Games
Key figures: North East Asia
2015 2021 CAGR 2015–2021
Mobile subscriptions (million) 1,560 1,800 2%
Smartphone subscriptions (million) 1,130 1,700 7%
Data traffic per active smartphone (GB/month) 0.8 7 40%
Total mobile traffic (EB/month) 1.3 12 45%
1
5G networks, based on standards that will meet ITU IMT-2020 requirements, are expected to be deployed commercially
in 2020. The launch of pre-standard, pre-commercial networks is anticipated earlier in selected markets.

3. NORTH EAST ASIA JUNE 2016 ERICSSON MOBILITY REPORT 3
Mobile subscriptions
The number of mobile subscriptions is increasing in North East Asia,
with almost 1.6 billion recorded at the end of 2015 – equating to 20 percent
of the global market. This figure will grow at a Compound Annual Growth Rate
(CAGR) of 2 percent, reaching 1.8 billion subscriptions by the end of 2021
2
Excluding cellular M2M
LTE/5G subscriptions, North East Asia (million)
Mainland China South Korea
Rest of North East AsiaJapan
400
600
800
1,000
1,200
1,400
1,600
200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0
Mobile subscriptions, North East Asia (million)
20162012 201820142011 20172013 2019 2020 20212015
Other
LTE/5G subscriptions
North East Asia had
almost 50 percent
of the world’s LTE
subscriptions in 2015
20162012 201820142011 20172013 2019 2020 20212015
Mobile subscriptions in Mainland China surpassed 1.3 billion
at the end of 2015, and had at that time almost 35 percent
of the world’s LTE subscriptions, with 95 million net added
during Q1 2016.2
The smartphone market is the world’s largest in terms of
volume. In 2015, smartphone penetration in Mainland China
reached nearly 70 percent, and 0.5 billion LTE handset
subscriptions were passed in North East Asia.
LTE subscriptions are exploding
In North East Asia, LTE subscriptions reached above
500 million by the end of 2015, and at the time had almost
50 percent of the world’s LTE subscriptions. Mainland China,
Japan and South Korea are among the top four countries in the
world using LTE. In Mainland China, LTE subscriptions passed
500 million during Q1 2016, accounting for almost 40 percent
of mobile subscriptions in China. Migration from 3G to 4G has
also been steady in South Korea and Japan.
LTE subscriptions in Taiwan reached approximately 12 million
at the end of 2015, achieving 50 percent LTE penetration after
less than 2 years in the commercial market. Mobile operators
in the country are introducing 3 carrier aggregations, in order
to boost LTE download speed to more than 300 Mbps.
In China, as more people adopt mobile devices, the number
of LTE/5G subscriptions is expected to reach around
1.2 billion by the end of 2021. This will represent
approximately 75 percent of total subscriptions in China
and 25 percent of total global LTE subscriptions.
In North East Asia, smartphone subscriptions are predicted
to increase by 7 percent CAGR between 2015 and 2021
to 1.7 billion. Furthermore, approximately 95 percent of
handsets will be smartphones in 2021.
5G subscriptions start to increase in 2020
Mobile operators in South Korea, Japan and Mainland
China plan to initiate a fully commercial 5G service by
around 2020. As such, 5G subscriptions are expected to
enter the market on a large scale in the early 2020s. This
will result in super high-speed data access, with massive
and critical Machine Type Communication (MTC) services
also anticipated. The former will enable high-definition
video streaming distribution, while the latter will be
utilized, for instance, in agriculture and smart cities.2

4. 4 ERICSSON MOBILITY REPORT NORTH EAST ASIA JUNE 2016
Proportion of internet users participating in a sharing
activity via websites or apps
Source: Ericsson ConsumerLab, Analytical Platform (2015)
Base: Internet users aged 15–69 in Mainland China, Japan
and South Korea
0%
30%
40%
50%
10%
20%
Japan South
Korea
Mainland
China
Adoption of networked lifestyles
Consumers in North East Asian markets are moving
towards the networked lifestyle at varying speeds. In
Japan, 62 percent of respondents surveyed use the internet
for over 3 hours per day. In comparison, 25 percent of
respondents in Mainland China spent less than 1 minute
per day browsing the internet, indicating an opportunity
for people to become better connected.3
The forerunners of the networked lifestyle are the ‘netizens’,
who are known to use several digital services daily and
own several connected devices. South Korea has the
largest group of netizens leading a networked lifestyle. In
contrast, Mainland China has a large group of un-networked
consumers. This group probably owns a mobile phone and
is connected technically. However, they are yet to experience
the positive effects of connecting with others.3
Consumer Trends
The lifestyle of today’s technology consumers, the networked
lifestyle, is shaped by their ability to blend digital services
and devices with everyday life. Mobile broadband boosts this
integration by making online services more easily accessible
The networked lifestyle
New technologies are becoming increasingly commonplace
in the networked life. Over 70 percent of all consumers
agree that their usage of technology has significantly
increased over the last 5 years.3
One reason for this is
that smartphones have greatly impacted consumers’
mindsets and their readiness to try new innovations. For
instance, while many users are keen to try new apps on
their smartphone, they can just as easily discard them if
uninterested and move on to new services and technologies.
Online connectivity in the networked lifestyle empowers
people to share knowledge and resources with each other.
More than 40 percent of consumers surveyed in Mainland
China and South Korea have already engaged in some form
of sharing activity – for example, goods and services with
peers – through websites and smartphone apps. Ultimately,
the belief that connecting more people via the internet will
benefit society will redefine networked lifestyle needs.3
More than 40 percent of internet users in Mainland
China and South Korea participate in a sharing
activity via websites and smartphone apps
Netizens and un-networked share of population
0%
5%
10%
15%
20%
25%
35%
30%
Un-networkedNetizen
Japan South KoreaMainland China
Source: Ericsson ConsumerLab, Analytical Platform (2015)
Base: Population aged 15–69 in Mainland China, Japan and South Korea3
Ericsson ConsumerLab, Analytical Platform (2015)

5. NORTH EAST ASIA JUNE 2016 ERICSSON MOBILITY REPORT 5
In Japan, 24 percent of all consumers own a smart TV,
whilst in Mainland China, 35 percent of urban consumers
own one. Currently, 47 percent surveyed would like their TVs
to be connected to the internet, which suggests that video
streaming apps have the potential to become mainstream in
the near future.4
This could ultimately have a positive ripple
effect across the entertainment industry.
New generations are driving this change – particularly as
many of them are “streaming natives”. In Mainland China,
83 percent of those aged 15–29 think free online video
sources have more relevant and interesting content than
traditional TV channels. In Japan, 13 percent of 15–29 year
olds see online video as their primary channel of accessing
TV content, compared to only 5 percent of those between
the ages of 60–69 years.4
Amongst 16–19 year old internet
users in South Korea, nearly 75 percent watch streamed
videos on a daily basis, compared to only 30 percent of
those over 45.5
Mobile TV/video viewing is also driven by the younger
generation. For 16–19 year olds in South Korea, Taiwan and
Mainland China, more than 50 percent of video viewing
hours take place on mobile screens. In fact, more than
30 percent of total viewing time within this population is
conducted on smartphones, as shown in the graph below.
Streaming natives
As part of the networked lifestyle, consumers expect greater
mobility and an increased number of devices to be connected
In Mainland China, 83 percent
of 15–29 year olds think online
video sources have more
relevant and interesting content
than traditional TV channels
83%
4
Ericsson ConsumerLab, Analytical Platform (2015)
5
Ericsson ConsumerLab, TV & Media (2015)
TaiwanSouth KoreaMainland China
Smartphone share of total weekly TV/video viewing time by age group
10%
15%
20%
25%
30%
35%
40%
45%
0%
5%
16–19 20–24 25–34 35–44 45–59
Source: Ericsson ConsumerLab, TV & Media (2015)
Base: At least weekly viewers of TV/video with broadband at home aged 16–59 in Mainland China, South Korea and Taiwan

6. 6 ERICSSON MOBILITY REPORT NORTH EAST ASIA JUNE 2016
On average, total mobile traffic in North East Asia is expected
to grow by 45 percent annually between 2015 and 2021.
Mobile data traffic in the region is likely to reach almost
12 EB per month in 2021; representing 99 percent of the
region’s mobile traffic.
Increasing mobile data traffic in Mainland China
Data consumption per subscription varies across the
region.The lowest average is measured in Mainland China;
however, this figure is increasing with the introduction
of LTE. At the end of 2015, the average mobile data
usage per subscription, including all technologies, was
around 0.4 GB in China. Currently, Chinese consumers
are rapidly switching to 4G, with nearly 90 percent6
of
all devices sold by the end of 2015 being 4G capable.
Total mobile data traffic in the country is expected to
increase almost fourteen-fold between 2015 and 2021.
High penetration rates drive data
The increase of mobile data traffic is accelerated by
high smartphone and LTE penetration rates. Countries
like Japan and South Korea are already advanced in
applying these technologies and will continue to see
rising data traffic due to mobile video growth.
Mobile traffic
Total mobile data traffic in North East Asia was around 1.3 ExaBytes (EB) per
month at the end of 2015, of which 0.9 EB per month came from smartphones
6
China Academy of Telecommunication Research of MIIT (CAICT)
Mobile traffic, North East Asia (monthly PetaBytes)
DataVoice
Mobile data traffic, North East Asia,
split per device (monthly PetaBytes)
Mobile PCs, tablets and mobile routers
0
2,000
2011 2015 20192013 2017 2021
4,000
6,000
8,000
10,000
12,000
Total mobile data traffic in
Mainland China is expected to
increase almost fourteen-fold
between 2015 and 2021
Smartphones
0
2,000
2011
4,000
6,000
8,000
10,000
12,000
Voice
2015 2017 2019 20212013

7. NORTH EAST ASIA JUNE 2016 ERICSSON MOBILITY REPORT 7
User viewing experience can be estimated by using
network performance measurements from North East
Asian metropolitan areas7
, with 90 percent probability
a good proxy for cell-edge performance. The downlink
throughput measurements show that in Tokyo and Beijing,
mobile users can get 9 Mbps or more. In Taipei and
Seoul, users can experience 6 Mbps and 3 Mbps or
more, respectively, while in Hong Kong users will get
1 Mbps or better.
Different apps have their own set of network performance
requirements. As a point of reference, focusing on
downlink demanding apps, a throughput rate of at least
1.5 Mbps is recommended for collaboration services
and 2.5 Mbps is recommended for HD video viewing.
Carrier aggregation
Operators in the region are continuously taking measures
to improve app user experience, and carrier aggregation is
a good example of this. Carrier aggregation was recently
demonstrated by a South Korean operator, where the
aggregation of 2 carriers (20+10 MHz) in June 2014 to
3 carriers (20+10+10 MHz) in January 2015, increased
network speeds for end users.
An MSIP8
study into benchmarking network downlink speed
in a major city, Busan, South Korea, found that average speed
has more than doubled; this was due to the deployment of
three carrier aggregation components in the network.
Network
performance
The increased use of media and video in North East Asia highlights
the importance of network performance, as the mobile user
experience is judged on how well apps perform. Therefore,
network performance is key to providing good user satisfaction
7
Ookla’s Speedtest Intelligence data from Speedtest.net (Q4 2015)
8
Ministry of Science, ICT and Future Planning, in Republic of Korea
Network downlink throughput, cell-edge in
metropolitan cities, North East Asia (Mbps)
Average LTE network speed in Busan,
South Korea has more than doubled following
the aggregation of three carriers
Average LTE network downlink throughput
with/without carrier aggregation in
Busan, South Korea (Mbps)
Source: Ericsson analysis on Ookla’s Speedtest Intelligence
data from Speedtest.net (Q4 2015)
Beijing
9
Tokyo
9
Hong Kong
1
Seoul
3
Taipei
6
Source: MSIP8
report on 2015 telecommunication
service quality measurement result
Base: Performance benchmark based on drive test/walk test
measurements on LTE networks in Busan, South Korea
*Carrier components
175
102
69
Wideband LTE
20 MHz
2CC*
(20+10 MHz)
3CC*
(20+10+10 MHz)

8. EAB-16:008200 Uen Rev B
© Ericsson AB 2016
Ericsson is the driving force behind the Networked Society – a world leader in
communications technology and services. Our long-term relationships with every
major telecom operator in the world allow people, business and society to fulfill their
potential and create a more sustainable future.
Our services, software and infrastructure – especially in mobility, broadband and the
cloud – are enabling the telecom industry and other sectors to do better business,
increase efficiency, improve the user experience and capture new opportunities.
With approximately 115,000 professionals and customers in 180 countries, we
combine global scale with technology and services leadership. We support networks
that connect more than 2.5 billion subscribers. Forty percent of the world’s mobile
traffic is carried over Ericsson networks. And our investments in research and
development ensure that our solutions – and our customers – stay in front.
Ericsson
SE-164 80 Stockholm, Sweden
Telephone +46 10 719 0000
www.ericsson.com