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New GSMA Study Reveals That Spectrum For Mobile Delivers Highest Economic Impact In Europe


News provided by

GSMA

20 Jun, 2013, 07:00 GMT

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-- Mobile Services' Use of Spectrum to Contribute € 477 Billion in Economic Value across EU27 by 2023

BRUSSELS, June 20, 2013 /PRNewswire/ -- The GSMA today issued a new report that demonstrates that mobile services generate the greatest economic value of eight major applications of spectrum(1). Developed by Plum Consulting, the report 'Valuing the Use of Spectrum in the EU' reveals that mobile's use of spectrum currently contributes € 269 billion to the economies of the EU's 27 Member States, far more than any other use of spectrum, such as wireless local area networks and terrestrial broadcasting. The report measures the economic value people place on a range of services that compete for spectrum and goes on to calculate that over the next 10 years, the additional benefit delivered by mobile increases even further.

The report estimates that the economic value of spectrum used for mobile could grow to € 477 billion by 2023. This forecast assumes that sufficient spectrum is made available for mobile over this period. The validity of this assumption will rely on the development of EU-wide spectrum policy, a critical element of the European Commission's forthcoming single market telecoms proposals.

"Spectrum is an essential resource and governments play a critical role in ensuring that those receiving licences deliver services that will enhance the lives of consumers, create new business opportunities and drive economic growth in Europe," said Tom Phillips, Chief Government and Regulatory Affairs Officer, GSMA. "In this regard, governments face a tough choice and must turn to solid economic analysis to guide their decisions. This report clearly shows that mobile services contribute far more than any other application, now and over the long term. In times of economic downturn and budget cuts at the European and Member State level, it is particularly important to support mobile's unique impact on Europe's economy."

Economic Value of Mobile Spectrum to Increase 77 Per Cent by 2023

The report finds that the economic value of spectrum for mobile services will increase dramatically over the next 10 years, while many other applications will see far lower rates of growth or even declines in value:

  • Increasing consumer use of smartphones, the proliferation of 4G mobile networks and the growth of machine-to-machine communications (M2M) are predicted to drive the economic value of mobile use of spectrum to € 477 billion by 2023.
  • The economic value of wireless local area networks, used to augment fixed broadband services, enable M2M communications and offload excess mobile data traffic, will grow from €22 billion to € 95 billion by 2023.
  • The majority of other spectrum applications, such as civil aviation and satellite communications, will see more modest growth.
  • The economic value of terrestrial TV and radio broadcast is predicted to decline from € 48 billion in 2013 to € 25 billion by 2023, as consumers move to paid-for satellite and cable platforms as well as Internet television and radio.
  • Mobile services already generate six times the economic value of terrestrial TV and radio across the EU27 Member States and could generate 20 times the economic value by 2023.

High Economic Value Underscores Importance of Mobile in Consumers' Lives

Ten years ago, nearly all of the value from mobile was generated by voice services and SMS. Now the transition to 3G and 4G networks has greatly expanded the functionality of mobile services and the majority of user time is spent accessing Internet services and using smartphone applications. The high economic value placed on mobile services observed by the Plum Report underscores the importance of 24/7 connectivity in consumers' lives and corroborates the findings of comparable studies conducted in the UK(2)(3).

The predictions developed in the Plum Report are based on clear and growing evidence that end users are willing to pay more for mobile services as they transition from 2G to 4G networks. This reflects the fact that 4G services, when combined with use of smartphones, offer much greater functionality than basic mobile services. However, Plum's forecasts are based on the unconstrained availability of spectrum and rely on the necessary steps being taken to allocate spectrum between applications in an efficient way over the next decade.

Next Steps for Spectrum in Europe

To boost competitiveness and ensure that consumers' best interests are served, the GSMA encourages the European Commission to work with Member States to resolve outstanding issues around the deployment of mobile broadband, notably release of the 800MHz spectrum band. The GSMA also calls on the Commission to establish a solid package of spectrum measures as part of its single telecoms market proposals(4). These should include a more coordinated pan-European approach to future spectrum releases and a harmonised approach to spectrum licensing, licence conditions and licence renewals consistent with global best practice. This report highlights the importance of mobile as a driver for growth, innovation and competitiveness across all sectors of the European economy.

"I encourage the European Commission to take this analysis on economic value into serious consideration as it finalises its policy proposals on the single telecoms market. It is vital that the European Union's spectrum policies support long-term investment from mobile network operators to support the full potential of socio-economic benefits of mobile in Europe," added Phillips.

Note to Editors

(1) The eight major applications of spectrum in Europe covered in the report are civil aviation services, mobile services, professional mobile radio (PMR), satellite fixed broadband, satellite for non-communications, terrestrial fixed links, terrestrial broadcasting and wireless LAN.

(2) 'Economic impact of the use of radio spectrum in the UK': http://stakeholders.ofcom.org.uk/binaries/research/spectrum-research/economic_impact.pdf

(3) 'Impact of radio spectrum on the UK economy and factors influencing future spectrum demand': http://www.analysysmason.com/About-Us/News/Insight/Economic-value-of-spectrum-Jan2013/#.UaHYOqIwc8o

(4) Source: GSMA report: 'Mobile Wireless Performance in the EU and U.S.': 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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