November 12, 2017

5G to Account for a Third of Europe's Mobile Market by 2025

As Europe's economy has improved in the past couple of years, I have taken an interest in identifying opportunities in the region's mobile industry with respect to artificial intelligence, financial technology (fintech), medical technology (medtech) and mobile applications (particularly in health and education). Therefore, I found interest in reading a new report, The Mobile Economy Europe 2017, by GSMA Intelligence, the research arm of London, England-based GSMA, estimating that "Europe will reach 214 million 5G connections in 2025, just over 30% of total connections."

The report further says, "Taking account of the anticipated European rollout, 5G adoption in Europe is expected to initially outstrip the equivalent rate of adoption for 4G in the years following launch. By 2025, 5G coverage is expected to reach almost three-quarters of the population in Europe, with Germany, the UK and France expected to lead in terms of number of 5G connections."

While we are a few years from seeing the wide adoption of 5G, the report notes, "Europe is seeing rapid adoption of 4G services. At the end of 2016, there were 226 million 4G connections in Europe (up 46% year on year), accounting for more than a third of total connections (excluding M2M). 4G connections will overtake 3G connections in the region in 2017 and reach 61% of the total by 2020."

What is more, "4G technology was designed to evolve, and there is plenty of room for future growth as operators focus their investments on network performance improvements, driven by advances in technology (e.g. MIMO and carrier aggregation). With the potential for speeds to reach above 1 Gbps, further evolution of 4G will provide considerable benefits to consumers who are increasingly demanding higher-speed, always-on connectivity."

On the topic of the mobile industry contributing to jobs and economic growth, the report explains that "mobile technologies and services generated 3.4% of GDP in Europe, a contribution that amounted to around €540 billion of economic value added. In the period to 2020, this figure will increase to around €670 billion (3.9% of GDP), as the region experiences strong growth in productivity brought about by continued adoption of M2M technology and the increased digitization of industry and services."

Importantly, "the mobile ecosystem supported 2.6 million jobs in 2016. This includes workers directly employed by mobile operators and the ecosystem, and jobs that are indirectly supported in the rest of the economy by the activity generated by the sector. The sector also makes an important contribution to the funding of the public sector, with €100 billion raised in 2016 mainly in the form of general taxation, including VAT, corporate taxes and employment taxes."

As for mobile driving engagement and innovation, "Europe continues to see innovation across all areas of the mobile ecosystem, spurred by the growth in new technologies, services and use cases. ... The application of artificial intelligence (AI) will also prove a fundamental enabler of the IoT ecosystem. While the AI industry continues to be dominated by established North American players in the internet ecosystem and enterprise space, European operators are now stepping up their efforts."

Having familiarity with Europe's mobile industry, I am encouraged to read the report's final chapter, "Looking to the Future of Mobile – Policies for a Digital Europe," which addresses the need for the European Commission to modernize its regulatory framework. The report accurately notes that Europe's "mobile industry continues to experience rapid change. The convergence of digital technologies is driving growth and innovation, enabling a steady flow of new services. Advanced applications and new ways of communicating are creating a truly connected society, radically impacting the way people use technology in daily life as well as how digital access is provisioned by network operators."

Moreover, I agree that "new thinking on telecoms sector regulation is required to achieve the vision of the 'Gigabit Society,' to encourage long-term growth and development, to create an environment that is conducive to investment and to ensure the expansion of next-generation digital networks and services. Only then will Europe be able to move quickly and capitalize on the tremendous opportunities a digitally vibrant economy can offer to its citizens and businesses."

Investment and business opportunities exist in Europe's mobile sector. What products or services are you developing for the European market?

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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