"With the continued rise of smartphones comes an accelerated growth in data usage: smartphone data is predicted to increase ten-fold by 2020, when 80 percent of all mobile data traffic will come from smartphones," it said.
Long-Term Evolution (LTE) technology based phones continue to grow strongly and have around 600 million subscriptions, with approximately 105 million additions in Q1 2015, it said.
"This immense growth in advanced mobile technology and data usage, driven by a surge in mobile connectivity and smartphone uptake, will make today’s big data revolution feel like the arrival of a floppy disk," Ericsson Senior Vice President, Chief Strategy Officer, Rima Qureshi said.
"We see the potential for mass-scale transformation, bringing a wealth of opportunities for telecom operators and others to capture new revenue streams. But it also requires greater focus on cost efficient delivery and openness to new business models to compete and remain effective," he added.
The report said an expanding range of applications and business models coupled with falling modem costs are key factors driving the growth of connected devices.
Ericsson’s forecast points to 26 billion connected devices by 2020.
"Each year until 2020, mobile video traffic will grow by a staggering 55 percent per year and will constitute around 60 percent of all mobile data traffic by the end of that period," it added.