October 7, 2022

North America's Metaverse Ecosystem is Growing Says Annual Report on Key Trends Shaping the Region's Mobile Industry

"Mobile networks are vital to economic recovery and the realization of green and digital transformation across North America," the GSMA asserts in its annual report on the state of North America's mobile economy. What is more, "In 2021, the US Congress passed an infrastructure bill, which allocates about $65 billion in federal funding toward expanding broadband access and 5G connectivity nationwide. In Canada, the government has recently established the Universal Broadband Fund, a CAD2.75 billion ($2.1 billion) investment to support high-speed internet projects across the country, including mobile internet projects in underserved areas. These developments highlight the opportunity for operators to partner with governments to improve connectivity across society and drive post-pandemic economic recovery."

According to research provided by GSMA Intelligence, there are 214 operators from 81 countries offering commercial 5G services. Across North America, which is defined as the US, Canada, and the Caribbean (GSMA includes Mexico in its Latin America report), the report shows that 5G will account for almost two-thirds of total mobile connections by 2025, the equivalent of nearly 280 million connections. The report also explains how 5G's upward trajectory was boosted by several factors such as economic recovery from the pandemic, rising 5G handset sales, and overall marketing efforts. In addition, the report highlights mobile connectivity's role in contributing to the economy and social well-being.

The report's other key findings include:
  • The North American mobile ecosystem directly generated around $300 billion of economic value in 2021, with mobile operators accounting for the majority
  • Mobile operators continue to innovate in addressing the digital divide, driving the industry's contribution to multiple UN SDGs, including SDG 9: Industry, Innovation and Infrastructure and SDG 10: Reduced Inequalities
  • In 2021, the mobile ecosystem directly employed more than 850,000 people in North America and supported another 1.4 million jobs indirectly
  • In 2021, the mobile ecosystem contributed almost $110 billion to the funding of the public sector through consumer and operator taxes
  • 5G set to overtake 4G in 2023 to become the dominant mobile technology in North America
  • By 2025, smartphones will account for nearly 9 in 10 connections on average in North America
  • North America is home to some of the world's biggest consumers of mobile data
  • As 5G rises, 4G declines, but adoption will continue to rise across the Caribbean for the foreseeable future
  • In the first five months of 2022, more than $120 billion was invested in building out metaverse technology and infrastructure, more than double the $57 billion invested in 2021

Infographic: GSMA

With respect to the growth of North America's metaverse ecosystem, while "still nascent," the GSMA says "the significant levels of investment in metaverse initiatives and market-size estimates reflect the opportunities possible from the rapid advancement of the metaverse over the coming years." For those unfamiliar with the term, the metaverse is simply defined as a virtual-reality space in which users can interact with a computer-generated environment and other users.

The report adds that "The metaverse ecosystem is growing in many countries around the world, including in North America. In the US and Canada, public and private institutions are increasingly establishing a presence in the metaverse and actively utilizing the platform in their engagement with customers and other stakeholders. For example, the US military relies on a series of metaverse or metaverse-adjacent virtual reality programs for a variety of applications, from training to healthcare; KPMG's US and Canadian member firms jointly launched a metaverse collaboration hub to support employee and client journeys into Web 3.0; and Barbados has signed an agreement with Decentraland to outline the baseline development elements for its metaverse embassy."

The fashion retail sector will present use case opportunities for the metaverse. "Brands around the world have taken notice of the metaverse because they believe it will usher in the next age of consumerism," the report explains. "Well-recognized brands, such as Balenciaga, Gucci, Louis Vuitton and Nike, have already began collaborating with platforms similar to the metaverse in order to reach a broader audience. The Metaverse Fashion Week hosted on Decentraland in March 2022 speaks to the potential for different use cases across retail."

The GSMA, however, points out some challenges North America's mobile industry may encounter in the near-future. After a swift recovery from the impact of the pandemic, mobile revenue in North America is facing renewed pressure from macroeconomic challenges, notably inflation. In addition, capital expenditures will decline in the coming years following initial investments in the rollout of 5G networks.

What do you think of the report's findings? How are you taking advantage of the growth of 5G adoption while mitigating the macroeconomic risks that may impact North America's mobile industry?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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