North America continues to lead the world in the widespread adoption of new mobile technologies, including 4G, according to a new report from GSMA Intelligence.
Though the report is focused on the North American economy specifically, GSMA’s Reed Peterson said the findings tend to reflect a template for the future of other markets.
“It actually ends up being a bell weather for what’s going to happen in different markets,” he said. “You’re seeing the north American market specifically…but it’s showcasing ‘this is what happens when you build up the network infrastructure,’ and this is what other markets are going to be doing and hopefully learning from what the North American market has done.”
According the report, North America has one of the highest 4G connection rates, accounting for more than half of connections in 2015 and forecast to reach more than 80 percent of connections in 2020. To make this happen, the report estimates that operators will spend more than $200 billion in capital expenditures through 2020.
But these networks will be necessary to handle the mobile data traffic growth forecast in the report, with individual monthly data consumption growing at a compound annual rate of 42 percent through 2019. Before the end of the decade, individual data usage in North America is expected to hit 11 GB per month, compared to a global average of 4 GB per month.
Data usage, the report said, is being driven by a voracious consumer appetite for mobile video, which is expected to see a 54 percent CAGR through 2019. By that time, the proportion of mobile data traffic occupied by video is expected to increase to 75 percent, up 15 percentage points from 2014.
The report found that current mobile video traffic is mostly driven by third party apps and sites, like YouTube and Netflix, but said that dynamic could change with the success of direct offerings from carriers, such as Verizon’s Go90 and AT&T’s DirecTV.
Despite the drastic forecasts for increased usage, the report said subscriber growth in North America will likely be limited, with just a 1.1 percent CARG forecast through the end of the decade compared to a global average of 3.9 percent. The total subscriber base in North America is expected to reach 270 million by 2020, with Canada expected to generate a quarter of that regional growth.
But more than just generating granular findings and forecasts, Peterson said the report paints a picture of the North American economy as a whole, which he said has been driven by mobile tech.
“When you look at what the mobile operator does and look at the mobile industry and how it changes people’s lives, how it contributes the GDP, its socially conscious programs, support for business opportunities, etc., I truly think there is a story here looking at the mobile economy in North America as a way to deliver economic growth and societal benefit,” he said. “The mobile industry is just really providing really positive results for everybody. If you look at the economy over the past 10-15 years a lot of (that growth) has really been due to increased mobility and data traffic.”
The report has the number to back Peterson up. In 2014, 2.3 million jobs in North America were either directly or indirectly supported by the mobile ecosystem, including 550,000 jobs provided directly by mobile operators.
According to the report, 3.5 percent of the North American gross domestic product (GDP) in 2014 was generated by the mobile industry and its ecosystem. Direct economic impacts from mobile operators and the mobile ecosystem totaled $217 billion, with an additional $454 billion by indirect and productivity impacts for a total impact amounting to $670 billion. The combined economic contribution is forecast to grow to a total of $750 billion by 2020.
The mobile ecosystem also supports public funding through assorted taxes and social security contributions to the tune of $75 billion in 2014 alone. An additional $45 billion in the United States and $2 billion in Canada was contributed to public funds through the 2015 AWS-3 spectrum auctions, the report said.