June 28, 2017

Asia Pacific's Mobile Economy to Generate $1.6 Trillion of Economic Value in 2020

According to a report authored by GSMA Intelligence, the research arm of London, England-based GSMA, "More than half the world's mobile subscribers live in Asia Pacific – mostly in China and India." The Mobile Economy: Asia Pacific 2017 further says: "Although the region has reached its peak in terms of subscriber growth, Asia Pacific will account for almost two thirds of new subscribers globally by 2020, with most of the incremental growth coming from the two dominant markets, India and China. By 2020 there will be more than 3.1 billion mobile subscribers in the region, or three quarters of the population."

This year's report covers a variety of important topics pertaining to the mobile industry in Asia Pacific. Regarding 5G, for example, "Asian markets are driving the development of 5G mobile technologies, with commercial deployments planned in South Korea in 2019 and Japan and China in 2020. These early 5G networks will be deployed in dense urban areas as mobile operators look to offer increased performance and supplement existing mobile broadband capacity."

Furthermore, "In the early years following the initial launches, operators in 16 other countries across Asia Pacific are expected to deploy 5G services, covering a third of the region’s population by 2025. By this time, 5G connections (excluding IoT) are anticipated to reach 670 million across the region, accounting for just under 60% of global 5G connections."

The report, however, notes that "revenue growth in Asia Pacific has slowed sharply in recent years, reflecting declining subscriber growth (particularly in the region’s developed markets), increasing competition in certain markets, growing adoption of IP messaging services and a challenging macroeconomic environment."

Encouragingly, mobile technologies and services will generate $1.6 trillion of economic value or 5.4% of GDP in Asia-Pacific in the period to 2020 "as countries benefit from the improvements in productivity and efficiency brought about by increased take-up of mobile services and adoption of new mobile technologies such as M2M."

On the topic of how the mobile industry is contributing to jobs and economic growth in Asia Pacific, the mobile ecosystem "supported approximately 16 million jobs in 2016. This includes workers directly employed in the ecosystem and jobs that are indirectly supported by the economic activity generated by the sector. In addition to the mobile sector's impact on the economy and labor market, it makes a substantial contribution to the funding of the public sector, with approximately $166 billion raised in 2016 in the form of taxation."

The report correctly emphasizes the important role mobile is playing in driving engagement and innovation in the region:
As smartphone adoption continues to rise in the region (just over half of total connections were smartphones at the end of 2016) and as more users come online, an increasing range of mobile services are being consumed, including video, social media, e-commerce and financial services. Of all the regions, Asia Pacific as a whole will undergo the largest shift in consumer behavior by 2030 as multiple drivers take hold, including rising smartphone and mobile internet adoption, improved affordability and the regionalization of online content.
And the report importantly explains that "mobile is also playing a key role in tackling various social and economic challenges as outlined by the UN's Sustainable Development Goals (SDGs), including poverty, health, education, gender equality, employment, safer cities, climate change and identity." Furthermore, "Mobile technology provides access to tools and applications that help address these issues, and enables new technologies and innovations to build more efficient and environmentally sustainable societies."

Concluding with a discussion on regulation for the digital age, Asia Pacific is a "large and diverse region encompasses a wide array of countries at different stages of digital development. By developing national roadmaps that ask what the future looks like for them and how they get there, policymakers and regulators can more readily pinpoint the practical steps needed to enable the development of robust and progressive digital ecosystems. A coherent and feasible digital strategy is essential for enabling the three broad and interrelated components of a digital society: digital citizenship, digital lifestyle and digital commerce."

The report adds that "a central objective of regulatory policy should be to promote innovation in the digital ecosystem. Given that the digital economy is characterized by competition between new players and the traditional telecoms operators, legacy regulatory frameworks centered on the telecoms sector impose an uneven playing field where the telecoms operators are subject to rules and scrutiny that do not apply to their competitors.

Infographic: GSMA
While doing business in many of the nations within Asia Pacific carry a high degree of risk, the GSMA report furthers my enthusiasm about the future commercial and investment opportunities that exist in the region. Are there specific aspects of the report that you find valuable?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

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