Europe is falling behind other regions with advanced economies when it comes to mobile communication.
A new study shows that Europe’s mobile phone revenue is likely to drop by 16 percent between 2008 and 2017 to be at about $193 billion. The European sector is now at about $228 billion.
That will make it the only region in the world to see a decrease in the sector, the report said.
The news comes when U.S.-based companies are increasing – with Verizon planning to take over the portion of Verizon Wireless owned by U.K.-based Vodafone and Microsoft planning to take over much of the mobile operation of Nokia, based in Finland.
It also comes as Europe appears is too sluggish in adopting 4G communication – when compared to such locations as the United States.
In addition, average mobile data connection speeds in North America were some 75 percent quicker than those in Europe, the report said, citing Cisco data. Looking ahead, average mobile connection speeds will be higher than 14 Megabits per second in North America in 2017, compared to 7 Megabits per second in Europe.
“The EU lags and the U.S. leads,” Gunnar Hökmark, who represents Sweden in the European Parliament, said in a recent article in The Wall Street Journal. “Nineteen percent of U.S. connections are expected to be on LTE networks, or 4G, by the end of the year, compared with fewer than 2 percent in the EU. Thanks to network operators' unprecedented investments and consumers' surging demand for mobile broadband, the LTE networks of the two biggest operators, AT&T and Verizon, cover 85 percent of the U.S. population. In addition, connections in the U.S. are on average 75 percent faster than in the EU.”
“Whereas American carriers benefit from a single market with 341 million wireless subscriptions, their European counterparts are at best faced with a fragmented and patchy telecoms market, and at worst 28 different national markets,” he added.
Current conditions are a direct result of Europe spending less on its mobile infrastructure – which in turn took place because of lower revenue in the sector, according to The Wall Street Journal.
U.S. telecom companies invested $21.3 billion in 2008, while European telecom companies invested $29.6 billion. Last year, the United States invested $29.4 billion and Europe invested $27.6 billion. By 2017, the U.S. will invest $29.5 billion and Europe will invest $23.3 billion.
"Europe was long viewed as a pioneer in mobile, but, as this report illustrates, is now lagging behind other regions in the deployment of mobile broadband, particularly in 4G/LTE," Anne Bouverot, director general of GSMA, the industry group that issued the report, said in a statement.
The report noted that at end of last year saw that 4G/LTE was 0.3 percent of total devices in Europe, compared to 11 percent in the United States and 28 percent in South Korea.
In response to these conditions, there needs to be increased investment in mobile broadband and less restrictive government regulations in place, the organization argues for Europe.
“The mobile industry can play a key role in the European recovery, but this will require policy that encourages investment in mobile broadband connectivity, enables innovation and helps build consumer confidence in mobile services,” Bouverot said. “This should be at the heart of the [European] Commission's planned proposals on a single telecoms market."
"Clearly, the focus needs to be on stimulating investment to achieve long-term economic growth," Bouverot added. "The move to a Connected Life, where nearly everything and everyone are connected, presents an important opportunity for Europe to regain its leadership position. Collectively, we must create an environment that will attract and nurture investment in mobile. The single telecoms market initiative presents an important opportunity to enable this and we must get it right."
Hökmark wants to see improved release of spectrum and European auction of 4G wireless services. Many of these should be going to European-wide services rather than just a market for a single nation. Europe, like the United States, could use the 700 MHz band for wireless services, he added.
When it comes to regulation, the report highlighted European imposed price caps on roaming charges, which the report called “a challenge to industry profitability at a time when operators are facing a number of challenges to their top lines.”
There are some other issues on the mobile market highlighted by the Journal. One relates to the mix of revenue. For instance, the rate of growth in data revenue is dropping in Europe with more interest in instant messaging. In addition, the market is fragmented with many competitors, which restricts growth that could be achieved by mobile operators in Europe. Also, like with other sectors in Europe, the overall economic conditions have yet to rebound. There could be a change in the economy starting in 2014, the report said, citing data from the International Monetary Fund. And there should be a more coordinated release of available spectrum in Europe.
There was positive news included in the report. The mobile sector in Europe helps to employ 394,000 workers. There are also a high number of unique mobile subscribers compared to other regions. Also, the number of connected wireless devices in Europe is projected to jump to some six billion by 2020. Mobile tech is likely to be added in automotive, commerce, education, health, government and utility sectors, the report adds.
There are opportunities for growth, but European regulators have to put in place policies that will let the private sector succeed. The European consumer will benefit as a result.
Edited by
Rachel Ramsey 
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