US pulls ahead of Europe in next-gen mobile services

US pulls ahead of Europe in next-gen mobile services

 The next-generation mobile market in the U.S. has surged ahead of
European development, according to the GSMA industry organization, which
represents worldwide operators and handset manufacturers.
This is a rapid reversal of previous trends, when European operators were rolling out 2.5G data services like GPRS and Edge, and then widely available 3G services, before carriers in the U.S.

Report spots slowdown

The GSMA “Mobile Wireless Performance in the EU and US” report
says European legislation and the lack of a pan-European strategy for
the advancement of next-generation services is the reason for the U.S.
being well ahead. (See also “Testing America’s networks: AT&T has fastest LTE service, T-Mobile off to strong start.”)
“Europe was the early leader in mobile, with a wide range of companies
pioneering the innovation that now benefits more than 3.2 billion users
around the world,” said Anne Bouverot, director general of the GSMA.
“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 US. It is clear that enlightened
policy reforms could bring improvement, creating substantial benefits
for EU consumers and driving economic growth.”
Over the last few years the European Commission has passed legislation
to reduce the price of making and receiving calls while roaming, and
capping data charges while abroad too. The GSMA report suggests such
moves have hindered infrastructure investment to support the rapid
roll-out of next generation services like 4G across Europe.
The GSMA said that as recently as five years ago the European mobile
market was “performing as well as, or even better than the US.” Since
then though the report says the situation has been dramatically

On average, “U.S. consumers spend more each month than their EU
counterparts and use mobile services much more intensely, consuming five
times more voice minutes and nearly twice as much data,” the report
says. It predicts that by the end of 2013, nearly 20 percent of U.S.
connections will be on LTE (4G) networks, compared to fewer than 2
percent in the EU.
Average mobile data connection speeds in the U.S. are now 75 percent
faster than those in Europe, and by 2017 U.S. speeds “will be more than
twice as fast,” according to the report. Mobile investment in the US has
also outpaced that in Europe, with capital expenditure in the U.S.
growing by 70 percent since 2007 while declining in the EU, and “the gap
continues to widen.”

Recommendations and reforms

The GSMA says “fundamental regulatory reforms are needed to restore
growth in the European mobile industry.” In particular, “a focus on
facilitating investment and innovation, rather than on the direct
management of prices, is needed.”
The report recommends that the European Commission moves in the following areas:
  • Prioritize spectrum allocation and harmonize spectrum bands used
  • Enable efficient consolidation by streamlining merger reviews, and end “discrimination in favor of new entrants”
  • Drive a European single market for mobile, with “light touch”
    legislation allowing for easier network sharing and subsidies for rural
  • Support pan-European mobile-enabled public/private partnership
    initiatives, aimed at stimulating growth, building social inclusion and
    promoting investment in new technology and services
“We believe that undertaking these major policy reforms is essential in
reestablishing the leadership of Europe in mobile, driving new growth
and investment in our industry and, more importantly, generating
important socio-economic benefits for citizens across the EU,” Bouverot

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