
Mobile Industry's Annual Contribution to European Economy Surpasses EUR500 Billion
London: The mobile industry's contribution to Europe's economy is set to increase over the next five years on the back of increasing mobile operator investment in 4G networks and services, according to a new study by the GSMA. The new report, The Mobile Economy: Europe 2015', forecasts that the industry's contribution to European GDP will increase from EUR500 billion in 2014 to EUR600 billion by 2020, as markets across the region benefit from the improvements in productivity and efficiency brought about by the adoption of new mobile technologies, including machine-to-machine (M2M) communications. Ongoing mobile operator investments in 4G network quality and coverage across Europe will see 4G account for 60 per cent of the continent's mobile connections1 by 2020, according to the report, up from 20 per cent today.
Europe's mobile operators have invested heavily in 4G over the past few years despite challenging macroeconomic and regulatory conditions, and we expect investments in 4G deployments, capacity and spectrum to be sustained for the remainder of the decade, said Alex Sinclair, Acting Director General and Chief Technology Officer at the GSMA. Mobile subscribers in Europe are now benefiting from download speeds that far exceed the global average and are taking advantage of a range of innovative new services made possible by next-generation networks and devices.
4G Driving Data Volumes and Revenue Recovery
Europe is a highly mature mobile region characterised by high subscriber penetration levels. There are set to be 430 million unique mobile subscribers2 in Europe by the end of 2015, representing 79 per cent of the region's population. This makes Europe the most highly penetrated mobile region in the world, nearly ten percentage points higher than North America. As a result, there is limited room for future subscriber growth: it is forecast that the number of unique mobile subscribers in Europe will reach 450 million by 2020, representing 81 per cent of the region's expected population by this point.
Migration to 4G networks is being driven by expanding 4G coverage and rising smartphone adoption. 4G network coverage passed 80 per cent of the European population in early 2015 and is forecast to exceed 95 per cent by the end of the decade. The improved coverage, a greater number of available devices at a broader range of price points, and increasing use of music and video streaming services are some of the factors driving increased adoption of 4G devices. Smartphones are forecast to account for 76 per cent of Europe's mobile connections by 2020, up from 60 per cent this year.
Expanding 4G coverage and greater adoption of 4G-capable devices is also encouraging greater mobile data usage. According to Cisco3, the average monthly data usage for Western Europe is set to grow from less than 1GB per month in 2014 to nearly 6GB in 2019, a 45 per cent compound annual growth rate (CAGR). Many European operators are reporting that 4G customers are using more than double the amount of data as 3G users. According to the report, revenue from mobile data services is also helping many operators return to service revenue growth after periods of negative growth.
Mobile Delivering Economic Growth and Driving Innovation Across Europe
The EUR500 billion generated by the mobile industry in Europe last year was equivalent to 3.2 per cent of the region's GDP4. The industry also directly and indirectly supported 3.8 million jobs and contributed approximately EUR84 billion to public funding in the form of various types of taxation. In addition to tax contributions, mobile operators contribute to public funding via the payment of spectrum fees. In 2014, for example, the allocation of spectrum licences in countries such as Greece, Hungary and Estonia generated approximately EUR700 million in total for their respective governments.
The mobile industry is leading European digital innovation, notably in areas such as mobile commerce, smart manufacturing, smart homes and smart health. Mobile networks are also providing the platform for the Internet of Things (IoT) opportunity: the number of cellular M2M connections in Europe are forecast to grow from 68 million this year to 182 million by 2020, a 22 per cent CAGR. There is also growing interest in the use of low-power, wide-area (LPWA) solutions, which will play an important role in connecting a range of IoT devices.
However, a key challenge for Europe's mobile industry is its ability to scale across a continent that has many different national regulatory and legal environments. The EU's proposal to create a European Digital Single Market aims to reduce such barriers to innovation and use digital services and networks to drive future economic growth.
Transforming Europe into a world-leading digital economy will require an extensive regulatory overhaul that encourages investment in future-proof infrastructure and addresses the current fragmented approach in areas such as spectrum, added Sinclair. The creation of a Digital Single Market provides a unique opportunity to build a new regulatory framework that supports a new era of digital players, services and business models, underpinned by advanced mobile broadband connectivity.
To access the full report and related infographics please visit: http://www.gsmamobileeconomy.com/europe/.
-ENDS-
About the GSMA
The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading even
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