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Partnership Between European Mobile Operators and Policy Makers Is Critical to Unlocking the Benefits of the Connected Life
5 September 2013, Brussels: Ahead of today's GSMA Mobile 360-Europe conference in Brussels, the GSMA released a comprehensive assessment of the impact of the mobile industry in Europe. The report1, Mobile Economy Europe 2013 , developed by GSMA Intelligence, reveals that in 2012, the mobile ecosystem generated approximately 2.1 per cent of GDP for the European Union (EU) - including contributions to public funding of 53 billion - and directly supported 394,000 jobs in the region.
The study also indicates that, despite having the world's highest unique subscriber penetration rate at 79 per cent, Europe is the only region to see revenues decline - from 162 billion in 20102 to 151 billion in 2012 and is now falling behind in the deployment of next-generation mobile technologies and the advanced services they make possible. The report concludes with the opportunities presented in a world where nearly everything and everyone will be connected by mobile and the key role of smart policy and regulation in helping Europe maximise its potential.
Europe was long viewed as a pioneer in mobile, but, as this report illustrates, is now lagging behind other regions in the deployment of mobile broadband, particularly in 4G/LTE, said Anne Bouverot, Director General, GSMA. Despite this, the mobile industry can play a key role in the European recovery, but this will require policy that encourages investment in mobile broadband connectivity, enables innovation and helps build consumer confidence in mobile services. This should be at the heart of the Commission's planned proposals on a single telecoms market.
Europe Trails in Adoption of Next-Generation Mobile Technologies
The report issued today finds that Europe has fallen behind many other parts of the world in the deployment of Long Term Evolution (LTE) technology. At the end of 2012, LTE accounted for just 0.3 per cent of total devices in Europe, compared to 11 per cent in the U.S. and 28 per cent in South Korea. This reinforces research issued by the GSMA and Navigant Economics earlier this year3, which showed that growth in investment in the U.S. is translating into faster data connections, with U.S. speeds now 75 per cent faster than the EU average, with the gap expected to grow.
Creating a Connected Europe - Helping Deliver the EU's 2020 Growth Strategy
Despite the current challenges, Connected Living presents an important opportunity to expand the reach of mobile into key vertical industry sectors. The number of connected wireless devices in Europe is expected to grow to nearly six billion by 20204, around a quarter of the global total. The total addressable market for Connected Living in Europe could be as large as 234 billion5 by 2020, offering a potential uplift of more than six per cent to the EU's GDP. The adoption of mobile technology in industry sectors such as automotive, commerce, education, health, government and utilities, among others will create opportunities for new business models and revenue streams, supporting growth, jobs, innovation and sustainability.
The report also outlines a number of key areas where appropriate EU policy and regulation can help regain lost technology leadership by encouraging investment, reducing barriers to consolidation, enabling innovation and building consumer confidence.
Encouraging Investment Through Spectrum Harmonisation
A more coordinated pan-European approach to spectrum release and harmonisation can help underpin further investments in broadband connectivity. The EU has indicated that a total of 1200MHz of spectrum should be allocated by 2015 to meet the expected growth in data traffic, but only an average of 600MHz has already been released and there are delays in allocating the Digital Dividend spectrum in the 800MHz band. If these issues are addressed, it is estimated that up to 119 billion of incremental GDP could be generated over the period to 2020, producing 23 billion of additional tax revenues and creating up to 156,000 new jobs across the region.
Reducing Barriers to Market Consolidation
With Europe home to more than 100 mobile operators as well as nearly 530 MVNOs6, consolidation has become a growing industry issue as operators face inconsistent spectrum policy, ongoing competitive pressures and increasing revenue declines and margin erosion. The European Commission can help reduce barriers to efficient market consolidation by simplifying merger reviews and taking a more cautious approach to the imposition of remedies.
Enabling Innovation in Content and Services
Mobile operators are working to continually expand their portfolios with new products and services that go beyond traditional core voice, SMS and data propositions. The report finds that in order for operators to continue developing new services, they must be free to create business and pricing models that are better aligned with the services that consumers desire and are willing to pay for. A regulatory framework that enables this will be a key driver for innovation.
Building Consumer Confidence in the Use of Mobile Services and Applications
With mobile now firmly entrenched in consumers' everyday lives, the industry must continue to proactively address issues such as fraud, spam and privacy concerns. Consumers seek meaningful information and consistent rules that apply for functionally equivalent services. Regulators should not apply prescriptive rules to the information provided to consumers, but rather focus on ensuring transparency across the entire Internet value chain.
Clearly, the focus needs to be on stimulating investment to achieve long-term economic growth, continued Bouverot. The move to a Connected Life, where nearly ev
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