Creating the mobile economy

The mobile indus­try has scaled dra­mat­i­cal­ly over the last decade. At the end of 2003, there were a lit­tle over one bil­lion unique sub­scribers, mean­ing that just under one in six peo­ple had sub­scribed to a mobile ser­vice. By the end of 2013, this fig­ure had increased to 3.4 bil­lion unique sub­scribers, equiv­a­lent to just under half the glob­al pop­u­la­tion at that time and account­ing for 6.9 bil­lion SIM con­nec­tions.

While we’re now see­ing a slow­ing of sub­scriber and con­nec­tions growth rates in devel­oped mar­kets, there is sig­nif­i­cant untapped poten­tial in devel­op­ing mar­kets, which are fore­cast to add near­ly one bil­lion unique mobile sub­scribers by 2020. In devel­oped mar­kets, there is a tech­nol­o­gy shift under­way, with an increas­ing pro­por­tion of mobile con­nec­tions now on high­er speed 3G and 4G net­works; glob­al­ly this pro­por­tion is set to rise from a third at the end of 2013 to two-thirds by 2020. The num­ber of oper­a­tors that have com­mer­cial­ly launched LTE (long-term evo­lu­tion) net­works is fore­cast to almost dou­ble over the next three years to reach close to 600 oper­a­tors in 156 coun­tries across the world, cov­er­ing 63 per cent of the glob­al pop­u­la­tion by 2020.

Indeed, the move to high­er speed net­works is accel­er­at­ing; the num­ber of mobile broad­band con­nec­tions has grown ten­fold from just over 200 mil­lion in 2008 to well over two bil­lion by 2013. Growth should remain strong, dri­ven by ris­ing smart­phone pen­e­tra­tion, with about four bil­lion mobile broad­band con­nec­tions expect­ed to be added glob­al­ly in the peri­od to 2020. High­er speed net­works and more advanced devices are enabling the growth of data-hun­gry appli­ca­tions, such as video stream­ing, inter­net brows­ing and file down­loads. At a glob­al lev­el, the rate of growth in data traf­fic is like­ly to far out­strip the growth in mobile con­nec­tions.

The trans­for­ma­tive effect of mobile has been made pos­si­ble by sig­nif­i­cant cap­i­tal invest­ment by mobile oper­a­tors over recent years, totalling more than $1 tril­lion in the last six years. Invest­ment has been focused on both improv­ing net­work cov­er­age and facil­i­tat­ing the growth in mobile broad­band con­nec­tions. Total invest­ments by the oper­a­tors are expect­ed to increase to accom­mo­date the strong fore­cast growth in glob­al data traf­fic, amount­ing to $1.7 tril­lion to 2020.

Mobile has become a cor­ner­stone of the glob­al econ­o­my, both as an indus­try in its own right and as an enabler of oppor­tu­ni­ties in oth­er sec­tors

 ECONOMIC CORNERSTONE

Giv­en this, it’s no sur­prise that mobile has become a cor­ner­stone of the glob­al econ­o­my, both as an indus­try in its own right and as an enabler of oppor­tu­ni­ties in oth­er sec­tors. The mobile indus­try, both direct­ly and indi­rect­ly, con­tributed around 3.6 per cent of glob­al gross domes­tic prod­uct (GDP) in 2013, equiv­a­lent to more than $2.4 tril­lion. This fig­ure is expect­ed to increase to 5.1 per cent of glob­al GDP by 2020. In addi­tion, the mobile ecosys­tem direct­ly sup­ports 10.5 mil­lion jobs across the world, while con­tribut­ing more than $336 bil­lion in pub­lic fund­ing in 2013, even before con­sid­er­ing reg­u­la­to­ry and spec­trum fees.

The mobile indus­try has also played a cru­cial role in the glob­al econ­o­my as an inno­va­tion plat­form for new ser­vices. Mobile net­works pro­vide unique oppor­tu­ni­ties to reach new cus­tomers, and to mon­e­tise prod­ucts and ser­vices. The indus­try has enabled the emer­gence of a num­ber of “inno­va­tion hubs” across the world. These mobile inno­va­tion ecosys­tems con­tribute to the empow­er­ment of indi­vid­u­als and soci­eties, not only through the oppor­tu­ni­ties they cre­ate, but also through the solu­tions and ser­vices they deliv­er.

Mobile con­nec­tiv­i­ty has already trans­formed dai­ly life across the globe and is play­ing a par­tic­u­lar­ly strong role in socio-eco­nom­ic devel­op­ment in many devel­op­ing regions of the world. Mobile has brought voice ser­vices and inter­net access to the pre­vi­ous­ly uncon­nect­ed, bridg­ing the dig­i­tal divide and empow­er­ing com­mu­ni­ties. And the indus­try is focused on over­com­ing bar­ri­ers and devel­op­ing inno­v­a­tive new solu­tions to deploy net­works in more remote and chal­leng­ing envi­ron­ments, espe­cial­ly in devel­op­ing regions.

Mobile has ben­e­fit­ed some of the most dis­ad­van­taged com­mu­ni­ties through a range of life-chang­ing and, in some cas­es, life-sav­ing ser­vices. Mobile mon­ey is one such exam­ple, bring­ing finan­cial ser­vices with­in the reach of pre­vi­ous­ly unbanked and under-banked pop­u­la­tions. Mobile tech­nolo­gies can extend access to edu­ca­tion, par­tic­u­lar­ly in remote areas; mobile devices can act as a plat­form to pro­vide access to edu­ca­tion­al con­tent, as well as help­ing to address the short­age of teach­ers evi­dent in many devel­op­ing coun­tries.

DELIVERING DIGITAL FUTURE

Deliv­er­ing the dig­i­tal future will require a col­lab­o­ra­tive approach across the indus­try, among oper­a­tors, as well as new­er entrants to the mobile ecosys­tem. At the same time, pol­i­cy­mak­ers should ensure the right con­di­tions are in place for the full trans­for­ma­tion­al poten­tial of mobile ser­vices to be realised. As the mobile inter­net gains momen­tum, pol­i­cy change is required to ensure that ade­quate invest­ment and inno­va­tion comes from all ecosys­tem play­ers. Oper­a­tors and investors need sta­bil­i­ty and clar­i­ty in order to fund the sig­nif­i­cant invest­ment need­ed over the com­ing years, both to extend cov­er­age to more remote areas and to meet the grow­ing demand for high­er speed con­nec­tiv­i­ty. And secur­ing addi­tion­al, long-term har­monised spec­trum will also be crit­i­cal in real­is­ing the poten­tial of the dig­i­tal future.

The mobile indus­try has the oppor­tu­ni­ty to deliv­er even greater ben­e­fits to soci­ety in the future, with the poten­tial of con­nect­ing almost any­thing and any­one. The world of 2020 will offer a range of life-enhanc­ing ser­vices pow­ered by a vibrant mobile ecosys­tem that con­nects the phys­i­cal and dig­i­tal worlds. This con­ver­gence will unleash a new dimen­sion of ser­vices that improve the qual­i­ty of con­sumers’ lives and the pro­duc­tiv­i­ty of enter­pris­es, spread­ing far beyond com­mu­ni­ca­tions to pro­vide dra­mat­ic improve­ments in sec­tors, such as ener­gy effi­cien­cy, secu­ri­ty, health and edu­ca­tion. We look for­ward to play­ing a lead­ing role in deliv­er­ing this tru­ly con­nect­ed life.

 ECONOMIC CORNERSTONE

DELIVERING DIGITAL FUTURE