US well ahead of Europe in next generation mobile services, says GSMA

Mobile investment in the US has outpaced that in Europe

The next generation European mobile market is lagging well behind the US, according to the GSMA industry body, which represents the operators and handset manufacturers.

There has been a rapid reversal in fortunes when considering European operators rolled out 2.5G data services like GPRS and Edge, and then widely available 3G services before the US.

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 US being well ahead.

"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, "US 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.

Also, by the end of 2013, it says, nearly 20 percent of US connections will be on LTE [4G] networks, compared to fewer than two percent in the EU.

Average mobile data connection speeds in the US are now 75 percent faster than those in Europe, and by 2017 US speeds "will be more than twice as fast".

Mobile investment in the US has also outpaced that in Europe, with capital expenditure in the US growing by 70 per cent since 2007 while declining in the EU, and "the gap continues to widen".

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:

Prioritise spectrum allocation and harmonise spectrum bands used

Enable efficient consolidation by streamlining merger reviews, and end "discrimination in favour 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 re-establishing 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," claimed Bouverot.

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