Building the Mobile Economy

Building the Mobile Economy

February 25, 2013

Blog

The GSMA Mobile World Congress is a showcase for one of the world’s most vibrant and important industries. Already a major contributor to the global economy, over the next five years the mobile ecosystem* is on course to contribute more than US$10 trillion to global GDP. That will be an impressive achievement for an industry that barely existed three decades ago.

Today, mobile operators alone directly contribute 1.4 per cent of global GDP, according to the GSMA’s newly released report “The Mobile Economy”. Moreover, in 2012, more than eight million people were employed directly in the mobile ecosystem, a 17 per cent increase from 2008.

Last year, the mobile industry pumped approximately US$490 billion globally into public funds – a 32 per cent increase from 2008. Behind these big numbers, mobile is a service that has become an integral part of the daily lives of nearly half the people on the planet. Today, 3.2 billion people have at least one mobile phone or mobile connected device and that figure is set to climb to 3.9 billion by the end of 2017. Mobile enables them to communicate with family, friends and business contacts. But beyond basic communications, more than one billion smartphones and hundreds of thousands of apps are allowing people to access the Internet and a vast array of information and entertainment services, as well as tools that make them more productive and save costs.

The advent of the smartphone, combined with the widespread deployment of mobile broadband networks, has led to an explosion in mobile data traffic. Staggeringly, mobile data traffic volumes in 2012 alone were higher than all the previous years combined and are set to grow at a CAGR of 66 per cent a year for the next five years.

To meet this demand, the mobile industry will invest over US$1.1 trillion in CAPEX through 2017. Today, we have more than 1.6 billion mobile broadband connections and this is set to rise to 5.1 billion by the end of 2017.

Fourth-generation high-speed LTE technology is coming to the fore, with the 62 million connections today expected to grow to 920 million in 2017. But these high-speed networks alone are not sufficient to meet the rising stream of data traffic. An essential element to the continued growth of the mobile industry is the need for spectrum. Ideally, operators should have access to globally, or at a minimum, regionally harmonised spectrum, on reasonable terms that will generate economies of scale and encourage investment in additional capacity.

Access to sufficient harmonised spectrum will enable the mobile industry to have a profound impact on the broader economy, helping millions of companies to become more efficient, effective and green. We will be able to connect many more devices, machines and vehicles. Widespread connectivity will generate insights and drive innovation that will transform entire industries – mobile networks can harvest valuable information from everything from environmental sensors to security cameras to heart monitors.

TRUSTED, SECURE, PRIVATE

Of course, “big data” needs to be used in a way that safeguards individuals’ privacy and security – a stance that is embedded deeply in the modus operandi of the mobile industry. Mobile operators have a long and impressive track record of ensuring the customer data they hold is kept secure and private. For instance, to engender a consistent approach to privacy across the mobile ecosystem, the GSMA and its members created a set of privacy principles to ensure that apps are designed from the ground up to safeguard privacy.

Mobile operators also have well established and robust authentication systems that consumers could use to access third-party mobile apps and web services in a clear and transparent way. Individuals would have greater control over their online identity and app developers would be able to offer a trusted and user-friendly experience. And of course, mobile operators have the expertise and systems to ensure that mobile transactions are properly authenticated and secure.

The profusion of Internet services also has ramifications for the economics of the mobile industry. As mobile broadband traffic soars, we are going to have to find new business models that provide a stronger link between the investments required to build out networks and the revenues generated by services. At the same time, we need to work with policy makers to strike the right balance between too much competition and too little. Too much competition can deter investments, while too little can stifle innovation. If we can create an optimum solution that delivers appropriate returns across the entire value chain, we will be able to weave mobile connectivity further into the fabric of daily life, fuelling economic growth and generating major social benefits for people around the world.

In short, we have the opportunity to create a new Mobile Economy. Let’s take it.

* Mobile ecosystem is defined as mobile network operators, device makers, content providers, device distribution companies and mobile infrastructure equipment manufacturer

This article originally appeared in the Mobile World Congress Show Daily http://www.mobileworldlive.com/show-daily

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