US pulls ahead of Europe in next-gen mobile services
The next-generation mobile market in the U.S. has surged ahead of European development, according to the GSMA industry organization, which represents worldwide operators and handset manufacturers.
This is a rapid reversal of previous trends, when European operators were rolling out 2.5G data services like GPRS and Edge, and then widely available 3G services, before carriers in the U.S.
Report spots slowdown
The GSMA "Mobile Wireless Performance in the EU and US" report says European legislation and the lack of a pan-European strategy for the advancement of next-generation services is the reason for the U.S. being well ahead. (See also "Testing America's networks: AT&T has fastest LTE service, T-Mobile off to strong start.")
"Europe was the early leader in mobile, with a wide range of companies pioneering the innovation that now benefits more than 3.2 billion users around the world," said Anne Bouverot, director general of the GSMA. "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 US. It is clear that enlightened policy reforms could bring improvement, creating substantial benefits for EU consumers and driving economic growth."
Over the last few years the European Commission has passed legislation to reduce the price of making and receiving calls while roaming, and capping data charges while abroad too. The GSMA report suggests such moves have hindered infrastructure investment to support the rapid roll-out of next generation services like 4G across Europe.
The GSMA said that as recently as five years ago the European mobile market was "performing as well as, or even better than the US." Since then though the report says the situation has been dramatically reversed.
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 report says. It predicts that by the end of 2013, nearly 20 percent of U.S. connections will be on LTE (4G) 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 U.S. speeds "will be more than twice as fast," according to the report. Mobile investment in the US has also 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."
Recommendations and reforms
The GSMA says "fundamental regulatory reforms are needed to restore growth in the European mobile industry." In particular, "a focus on facilitating investment and innovation, rather than on the direct management of prices, is needed."
The report recommends that the European Commission moves in the following areas:
- Prioritize spectrum allocation and harmonize spectrum bands used
- Enable efficient consolidation by streamlining merger reviews, and end "discrimination in favor of new entrants"
- Drive a European single market for mobile, with "light touch" legislation allowing for easier network sharing and subsidies for rural coverage
- Support pan-European mobile-enabled public/private partnership initiatives, aimed at stimulating growth, building social inclusion and promoting investment in new technology and services
"We believe that undertaking these major policy reforms is essential in reestablishing the leadership of Europe in mobile, driving new growth and investment in our industry and, more importantly, generating important socio-economic benefits for citizens across the EU," Bouverot said.