GSMA: Europe trails U.S. on LTE deployment, mobile investment

Tools

The GSMA released a new report that argues countries in Europe are far behind the United States in LTE deployments, network speeds, total mobile usage and the rollout of advanced services, and called on European regulators to help it catch up.

There has been a growing sense on both sides of the Atlantic that the U.S. market has taken the leadership crown from Europe in terms of advanced mobile services over the past several years, especially with regard to the deployment of LTE. The GSMA's report, developed in collaboration with Navigant Economics, crystallizes that stance and puts into stark relief the gap between Europe and the United States, where there are expected to be four carriers offering LTE coverage to 200 million POPs by year-end. Verizon Wireless (NYSE:VZ), for example, now covers more than 287 million POPs with LTE.

"Europe was the early leader in mobile, with a wide range of companies pioneering the innovation that now benefits more than 3.2 billion men and women around the world," Anne Bouverot, director general of the GSMA, said in a statement. "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 United States. While there are many factors that have contributed to Europe's current position, it is clear that enlightened policy reforms could bring improvement, creating substantial benefits for EU consumers and driving economic growth."

The report found that, on average, U.S. consumers use five times more voice minutes and nearly twice as much data each month than their counterparts in the European Union. That largely fits with data from Cisco, which in its Visual Networking Index report released in February found that in 2012 North American mobile consumers used an average of 752 MB per month, compared with 491 MB per month in Western Europe and 200 MB per month in Central and Eastern Europe.

The report also found that by the end of 2013, nearly 20 percent of U.S. connections will be on LTE networks, compared with fewer than 2 percent in the EU. Indeed, many European countries are lagging in their LTE deployments: only one U.K. operator, EE, has commercially launched LTE (though more will launch this summer), and deployments are just getting going in France and Spain. Germany and Scandinavian countries are the furthest along in terms of LTE deployments in Europe.

Further, the GSMA's report found that average mobile data connection speeds in the United States are now 75 percent faster than those in Europe--and by 2017 the speeds will be more than twice as fast. The report also found that mobile investment in the United States has outpaced that in Europe, with capital expenditure in the U.S. market growing by 70 percent since 2007 while declining in the EU.

To remedy this, the GSMA is calling for several broad-reaching initiatives, many of which will require action from regulators at the European Commission, the EU's policymaking body. The trade group said regulators need to "focus on facilitating investment and innovation, rather than on the direct management of prices."

Specifically, the GSMA wants regulators to "ensure the allocation of the 700 MHz band for future mobile broadband services and, importantly, that it is released in line with internationally harmonized band plans." The trade group also wants the EU to focus less on encouraging new entrants into markets, make merger views speedier and put less emphasis on conditions to mergers between operators.

The GSMA and the EU are aligned on the need for a single European telecoms market but the GSMA wants "a light-touch, simplified approach to pan-European regulation" that encourages investment. Finally, the GSMA wants the commission to "create a series of pan-European, visionary, mobile-enabled public/private partnership initiatives aimed at stimulating growth, building social inclusion and promoting investment in new technology and services."

For more:
- see this release
- see this Bloomberg article
- see this The Verge article

Related Articles:
Mobile World Congress attendance surpasses 70K, GSMA vows to improve transportation
Report: Half of all mobile connections will be 3G/4G by 2017
OTT messaging adoption may marginalize Europe's operators
LTE in the USA: An in-depth look at LTE coverage, competition, devices and pricing
GSMA: Americans pay more for LTE access than others