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New GSMA Report Highlights Widening Gap Between European And United States Mobile Markets


News provided by

GSMA

29 May, 2013, 22:01 GMT

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- GSMA Urges Major Regulatory Reform to Spur New Investment and Innovation, Including the Assignment of New Spectrum and the Removal of Hurdles to Market Consolidation

LONDON, May 29, 2013 /PRNewswire/ -- The GSMA today released a new report, "Mobile Wireless Performance in the EU and U.S.", that examines the health of the European mobile market and reveals that Europe now lags far behind the United States in the deployment of next-generation mobile technologies and the advanced services made possible through mobile. The report, developed in collaboration with Navigant Economics, explores the many factors that have contributed to Europe's lost mobile leadership and offers policy recommendations designed to re-establish the EU as a centre for mobile investment and innovation.

"Europe was the early leader in mobile, with a wide range of companies pioneering the innovation that now benefits more than 3.2 billion men and women around the world," said Anne Bouverot, Director General, GSMA. "However, this report confirms the very sobering reality that Europe has lost its edge in mobile and is significantly underperforming other advanced economies, including the United States. While there are many factors that have contributed to Europe's current position, it is clear that enlightened policy reforms could bring improvement, creating substantial benefits for EU consumers and driving economic growth."

Comparison of Two Mobile Markets: EU vs. U.S.
As recently as five years ago, the European mobile market was performing as well as, or even better than, the United States. However, since then, the situation has dramatically reversed, as shown by the report's striking comparison of the two markets:

  • On average, U.S. consumers spend more each month than their EU counterparts and use mobile services much more intensely, consuming five times more voice minutes and nearly twice as much data.
  • The U.S. has opened up a large lead in deployment of next-generation technologies; by the end of 2013, nearly 20 per cent of U.S. connections will be on LTE networks, compared to fewer than two per cent in the EU.
  • Average mobile data connection speeds in the U.S. are now 75 per cent faster than those in Europe and by 2017 will be more than twice as fast.
  • Mobile investment in the United States has outpaced that in Europe, with capital expenditure in the U.S. growing by 70 per cent since 2007 while declining in the EU and the gap continues to widen.

"While there are several factors leading to this divergent performance, it can be partially attributed to the relatively inefficient structure of mobile markets in Europe," said Jeffrey Eisenach, Managing Director at Navigant Economics. "EU regulatory policies have resulted in a fragmented market structure that prevents operators from capturing beneficial economies of scale and scope and inhibits the growth of the mobile ecosystem."

Focus on Facilitating Investment and Innovation
Fundamental regulatory reforms are needed to restore growth in the European mobile industry. In particular, a focus on facilitating investment and innovation, rather than on the direct management of prices, is needed. The GSMA offers the following recommendations to create a new, progressive regulatory environment that matches the current economic reality:

Prioritise Spectrum Allocation and Harmonisation – The European Commission's immediate priority should be to address the slow progress being made on the release of the first Digital Dividend, where the majority of Member States have missed the allocation deadline. In the coming years, Europe faces a significant spectrum shortfall that must be addressed now. It is critical that the European Commission ensures the allocation of the 700MHz band for future mobile broadband services and, importantly, that it is released in line with internationally harmonised band plans.

Enable Efficient Consolidation – The Commission should reduce impediments to the efficient consolidation of mobile markets by streamlining merger reviews and taking a more cautious approach to the imposition of remedies. Discrimination in favour of new entrants should be discontinued and market forces should be allowed to determine the optimum number of players.

Drive the European Single Market for Mobile – The European single market for mobile could act as a key enabler for growth. The GSMA believes the European Commission must launch a major regulation exercise to establish a light-touch, simplified approach to pan-European regulation. This would entail a complete review of the way regulation is implemented at a national level and would identify areas that could be more effectively coordinated at a European level, such as consumer protection. Incentives to kick-start broadband investment should be introduced immediately, including the elimination of planning and network sharing restrictions and the provision of subsidies for rural coverage.

Attract Investment and Innovation to Europe – The European Commission should immediately create a bold plan that will position Europe as a centre for mobile innovation and investment, refocusing its policies on fostering innovation and leveraging the unique potential of the single market. The Commission should create a series of pan-European, visionary, mobile-enabled public/private partnership initiatives aimed at stimulating growth, building social inclusion and promoting investment in new technology and services.

"We believe that undertaking these major policy reforms is essential in re-establishing the leadership of Europe in mobile, driving new growth and investment in our industry and, more importantly, generating important socio-economic benefits for citizens across the EU," added Bouverot.

The full report is available at http://www.gsmamobilewirelessperformance.com/.

About the GSMA
The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world's mobile operators with more than 230 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers and Internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo. 

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com.

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