The North American mobile market is one of the most advanced and successful in the world, according to the latest report in the GSMA's Mobile Economy series.
The study, “Mobile Economy North America 2014”, which was released at the GSMA Mobile 360 Series-North America event today, found that mobile subscribers in the North American region1 are taking advantage of the latest mobile technologies and innovations at lower retail rates than other comparable global markets. It also finds that North American mobile operators have been able to grow revenue at a time when mobile revenue in Europe and other developed markets has been in decline.
“Our latest Mobile Economy report reveals how the widespread deployment of 4G networks in North America is creating a virtuous circle, stimulating adoption of new mobile technologies, applications and services that are unlocking new revenue streams for operators and enriching the mobile experience for consumers.”
“The North American mobile industry is established as a major contributor to the regional economy, serving over a quarter of a billion citizens and delivering high-speed mobile connectivity to huge swathes of the population,” said Michael O’Hara, Chief Marketing Officer, GSMA. “Our latest Mobile Economy report reveals how the widespread deployment of 4G networks in North America is creating a virtuous circle, stimulating adoption of new mobile technologies, applications and services that are unlocking new revenue streams for operators and enriching the mobile experience for consumers.”
Leading the Global Move to 4G
Key to the success of the North American mobile market in recent years has been ongoing investment in 4G networks. The first commercial 4G-LTE network was launched in the region in Q3 2010. By the end of 2013, the US had 85 million 4G mobile connections, making it the world’s single largest 4G market. Canada was the ninth-largest market with 2.7 million 4G connections (see table).
TE network was launched in the region in Q3 201Canada was the ninth-larg>TE network was launched in the region in Q3 201Canada was the ninth-largest market with 2.7 million 4G connections (see table).
TE network was launched in the region in Q3 2010. By the end of 2013, the US had 85 million 4G mobile connections, making it the world’s single largest 4G market. Canada was the ninth-largest market with 2.7 million 4G connections (see table).
Top 4G Markets by Connections, 2013 (millions)
Source: GSMA Intelligence
| 1 |
|
USA |
|
85.0 |
| 2 |
|
Japan |
|
43.9 |
| 3 |
|
South Korea |
|
29.4 |
| 4 |
|
Australia |
|
6.5 |
| 5 |
|
Germany |
|
4.2 |
| 6 |
|
France |
|
3.8 |
| 7 |
|
Sweden |
|
3.3 |
| 8 |
|
UK |
|
3.1 |
| 9 |
|
Canada |
|
2.7 |
| 10 |
|
Russia |
|
2.3 |
|
|
|
|
|
Total mobile connections (SIM cards) in the region stood at 341 million at the end of 2013, excluding M2M connections. However, the number of unique mobile subscribers (individuals) was significantly lower at 250 million, reflecting the high levels of multiple SIM and device ownership in the region.
4G accounted for approximately one in four of the total mobile connections in North America in 2013, the highest proportion of any global region.
Close to 97 per cent of the entire population in North America lived within the coverage range of 4G networks at the end of 2013, also one of the highest levels globally. Build-out of 4G networks has occurred at a more rapid rate than the earlier move to 3G. Whilst it took around four years for 3G coverage to reach 95 per cent of the population, 4G took just two and a half years.
Creating the ‘Virtuous Circle’
Mobile subscribers in North America are using significantly higher volumes of mobile services compared to users in other developed markets, both in terms of traditional mobile services (voice/SMS) and mobile data services. On a per connection basis, time spent on voice calls is five times as high as in Europe, while over twice as many SMS are sent. Data from Cisco indicates that North America in 2013 accounted for over a quarter of global mobile data volumes,2 despite the region having just over five per cent of total mobile connections.
Local operators have been able to successfully monetise mobile data growth, notably via the introduction of tiered pricing, shared data plans and attractive device portfolios. These trends have allowed operators in the region to deliver healthy revenue growth over recent years, at a time when many operators in other developed regions have seen revenue trends in decline. In the period between 2008 and 2013, mobile revenue in North America grew by 4.7 per cent a year (CAGR). This was above the global average of 4.5 per cent, and well ahead of Europe, where revenue declined at a CAGR of 3 per cent per annum.
A Growing Contributor to the North American Economy
The North American mobile industry (both directly and indirectly) accounted for around 3 per cent of regional gross domestic product (GDP), according to the report, equivalent to around US$550 billion3. This figure is expected to increase to around US$620 billion by 2020. In addition, there were around 1.1 million direct jobs supported by the mobile ecosystem across the region, with a further 380,000 supported indirectly. The mobile ecosystem also made a direct contribution of over US$63 billion in public funding in 2013, even before considering regulatory and spectrum fees.
A Supportive Regulatory Framework
North America’s mobile industry has benefited from a generally supportive regulatory backdrop that has played an important role in its strong performance in recent years. For example, the US market saw the early allocation of digital dividend spectrum in 2008, which was the key factor in establishing its 4G leadership.
Regulators have also looked more favourably on market consolidation between operators than has been the case in other developed markets. For example, between 2003 and 2012, the US Federal Communications Commission (FCC) approved 20 significant mergers and other mobile licence transactions, with a total value of US$288 billion.
“North America is at the centre of a new and rapidly developing mobile ecosystem,” continued O’Hara. “The region is playing a leading role in the development of new services and applications that have seen global take-up and is also a driving force in key areas such as digital commerce and the Internet of Things.”