The latest special report on FierceWireless:Europe highlights how Europe's operators could learn from the experiences of their U.S. counterparts when it comes to making money from data services, particularly on new LTE networks.
Indeed, analysts point to some very successful strategies at AT&T Mobility and Verizon Wireless, such as the introduction of large data buckets that can be shared among several devices and family members, thereby driving up revenue from a single subscription but keeping the cost down for the individual user.
European operators sometimes seem almost obstinate in their refusal to take such advice. One analyst in the report said U.S. operators had been very successful in not charging a premium for LTE services, while some European operators clearly regard this as a good way to rake in some extra cash while they can. At the same time, operators are slow to adopt data sharing, with mostly multi-SIM plans for two devices on offer.
It is not possible to compare every country in Europe with the United States, of course, due to national borders and cultural differences. Furthermore, if European Union digital chief Neelie Kroes gets her way, the "artificial" boundaries that separate networks in Europe will soon be swept away in the drive towards a European single market for telecoms.
Nonetheless, in a number of quarters the U.S. market is currently being held up as a shining example of how to drive mobile growth.
The GSMA which represents mobile operators across the globe, has just issued a new report together with Navigant Economics that clearly highlights how much Europe is now lagging behind the U.S. on mobile, and has castigated the Continent for allowing itself to lose its mobile leadership so easily.
It's no secret that the U.S. is ahead of Europe on the rollout of LTE, and the GSMA used this as a leading example's of Europe's tardiness. It said 20 per cent of US connections will be on LTE networks by the end of 2013, compared to less than 2 percent in the EU. U.S. data speeds are also now 75 per cent faster than the EU average, and the gap is expected to grow.
The report also said EU consumers pay less per month than U.S. consumers for mobile services, but US consumers use five times more voice minutes and twice as much data.
So why is the EU lagging so far behind the United States? The GSMA has put some of the blame on EU regulatory policies for creating a fragmented market structure "that prevents carriers from capturing beneficial economies of scale and scope and retards the growth of the mobile wireless ecosystem".
The association has now called for "sensible policy reforms" to "bring rapid improvement" for EU consumers and markets.
Whether or not the GSMA timed the release of its report to coincide with a speech by Kroes is mere speculation. In her speech, Kroes presented a plan to abolish mobile roaming charges by 2014 and ensure net neutrality across Europe.
To be sure, Europe's operators have already been irritated by the existing caps on roaming charges, and have blamed falling revenue on this policy--which has certainly been popular with consumers. Although careful to note that Kroes has recognised the value of market consolidation and the importance of economies of scale, the GSMA report clearly does not support a myopic focus on abolishing roaming charges, and instead urges regulators "to take a more far-sighted and dynamic view--to focus their attention on creating incentives for innovation that would dramatically increase consumer welfare, and on taking steps toward an more integrated mobile wireless ecosystem, including consistent spectrum allocation and assignment conditions."
This is just the start of what could be some interesting developments in mobile market regulation in the coming year.--Anne