Feature Article

May 30, 2013

New GSMA Report: Gap between European, US Mobile Markets Widens

If there was a competition going on between the United States and Europe in the mobile market, it appears that the U.S. is winning. That is one way that you can look at it. Another way is to see that lately more strides have been made in the U.S. when it comes to the deployment of next-generation mobile technologies.

Yesterday, May 29, the GSM Association (GSMA) released a new report entitled “Mobile Wireless Performance in the EU and U.S.” This report was designed to examine the health of the European mobile market.

The results of the report show that Europe is in poor health when it comes to the mobile market. It seems that Europe lags far behind the U.S. in deploying next-generation technology as well as the advanced services that could be delivered from it.

The following are a couple of examples that show how the European market has made a drastic reversal in the past couple of years:

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 percent of U.S. connections will be on LTE networks, compared to fewer than 2 percent in the EU.

Average mobile data connection speeds in the U.S. are now 75 percent 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 percent since 2007 while declining in the EU and the gap continues to widen.

The director general for GSMA, Anne Bouverot, said, "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. 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."

There were follow-up thoughts by Jeffrey Eisenach, the managing director at Navigant Economics, who said, "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. 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."

In the report, GSMA has made some suggestions that would allow the European mobile market to grow. Included are such ideas as fundamental regulatory reforms and making it a priority to address the slow progress being made on the release of the first Digital Dividend.

I reported back in February that the EU would make €50 million (U.S. $65.4 million) available for research that is aimed at developing and delivering 5G mobile technology by the year 2020. So we can see that Europe is serious about moving ahead, but there is still a lot of work that needs to be done in order to deliver 4G LTE services to a lot of areas in Europe.

If you would like to read all of the details of the GSMA report, “Mobile Wireless Performance in the EU and U.S.,” you can do so by going to the report site. You can either read the 43-page report online or you can download it and peruse it at your convenience.

Edited by Alisen Downey

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