The Mobile Economy 2018 - GSMA

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The Mobile Economy 2018 - GSMA
The Mobile
Economy
2018
Copyright © 2018 GSM Association
The Mobile Economy 2018 - GSMA
GSMA Intelligence

The GSMA represents the interests of mobile operators      GSMA Intelligence is the definitive source of global mobile
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The Mobile Economy 2018 - GSMA
Contents
EXECUTIVE SUMMARY                                                                   2

1     INDUSTRY OVERVIEW                                                             10
1.1   Mobile industry set to reach major milestones over the period to 2025         11
1.2   Mobile represents the highest scale consumer tech worldwide                   12
1.3   Mobile internet – new large smartphone markets emerge in the digital era      15
1.4   Transitioning from the connected consumer to the digital consumer             16
1.5   4G takes the lead in 2019, while 5G moves from trials to commercialisation    18
1.6   Financial outlook – pressure on traditional mobile revenue, while 5G capex    20
      still uncertain
1.7   Major operators exploring adjacent businesses in an evolving ecosystem        23
1.8   Scaling the Internet of Things – 25 billion connections by 2025               24

2     MOBILE CONTRIBUTING TO ECONOMIC GROWTH AND                                    26
      ADDRESSING SOCIAL CHALLENGES
2.1   Mobile contribution to economic growth, employment and public funding         27
2.2   The growing impact of mobile on the Sustainable Development Goals             33
2.3   Disaster response and the central role of mobile technology                   37
2.4   The challenge to connect the unconnected                                      38
2.5   Digitisation of the last mile across key industries                           39

3     MOBILE DRIVING AND ENABLING INNOVATION IN                                     42
      A FAST-EVOLVING ECOSYSTEM
3.1   Financing of tech innovation and development reaches unprecedented levels     43
3.2   The rise of mobile operator financing and collaboration with tech start-ups   44
3.3   Key areas of innovation – IoT, AR/VR, networks and AI                         48
3.4   Artificial intelligence moves towards mainstream adoption                     50

4     POLICY AND REGULATION – EXTENDING THE BENEFITS                                53
      OF THE DIGITAL AGE

                                                                                    Contents   1
The Mobile Economy 2018 - GSMA
The Mobile Economy 2018

    Executive
    Summary

              Mobile industry set to reach major milestones over the
              period to 2025

              Having surpassed 5 billion people connected        market that will add 1.75 billion new users over
              to mobile services in 2017, the global mobile      the next eight years, reaching a milestone of 5
              industry will reach further milestones             billion mobile internet users in 2025.
              over the next eight years. The number of
                                                                 Mobile internet adoption will increasingly
              unique mobile subscribers will reach 5.9
                                                                 become the key metric by which to measure
              billion by 2025, equivalent to 71% of the
                                                                 the reach and value created by the mobile
              world’s population. Growth will be driven by
                                                                 industry, including its contribution to the UN’s
              developing countries, particularly India, China,
                                                                 Sustainable Development Goals (SDGs). It
              Pakistan, Indonesia and Bangladesh, as well
                                                                 also contributes to developments in the wider
              as Sub-Saharan Africa and Latin America.
                                                                 digital ecosystem, as mobile internet users
              The speed of growth is slowing though, with        are the addressable market for e-commerce,
              most of the developed world approaching            fintech and a range of digitally delivered
              saturation. The more significant growth            services and content.
              opportunity will lie in mobile internet – a

2   Executive Summary
The Mobile Economy 2018 - GSMA
The Mobile Economy 2018

4G takes the lead in 2019, while 5G moves from trials
to early commercialisation
In 2019, 4G will become the leading mobile          2025, while Europe as a whole will continue to
network technology worldwide by number of           make progress with 5G deployments. In total,
connections (more than 3 billion) – another         these four economies will account for more
major milestone for the mobile industry,            than 70% of the 1.2 billion 5G connections
about 10 years since the launch of early 4G         expected globally by the end of the forecast
commercial services. Meanwhile, the mobile          period.
industry continues to make progress with 5G,
                                                    By 2025, two thirds of mobile connections
including successful trials around the globe
                                                    (excluding cellular IoT) across the world will
and the approval of the non-standalone 5G
                                                    operate on high-speed networks, with 4G
new radio specifications in December 2017.
                                                    accounting for 53% of total mobile SIMs and
A number of mobile 5G commercial launches           5G at 14%. To support customer migration and
are expected over the next three years in           further drive consumer engagement in the
North America and major markets across Asia         digital era, mobile operators will invest $0.5
and Europe. China, the US and Japan will be         trillion in mobile capex worldwide between
the leading countries by 5G connections in          2018 and 2020.

Scaling the Internet of Things: 25 billion connections by 2025

The number of Internet of Things (IoT)              Growth in IoT will be driven by a proliferation
connections (cellular and non-cellular) will        of uses cases for smart homes, cities,
increase more than threefold worldwide              buildings and enterprises, as well as
between 2017 and 2025, reaching 25 billion.         rising investor financing and a supportive
While IoT is rapidly becoming a mainstream          ecosystem for innovation. Developments
technology in some consumer markets                 in network connectivity to suit a variety of
such as consumer electronics and smart              IoT use cases, led by operators, also play a
homes, the industrial IoT segment is still in its   key role; at the end of 2017, there were 30
infancy – but is set to be the largest source of    commercial deployments of LTE-M and
connections growth going forward. Globally,         NB-IoT in 20 countries, including the US,
the industrial connections base will overtake       China and across Europe. Looking out to
consumer IoT connections in 2023.                   2025, licensed cellular IoT connections will
                                                    reach 3.1 billion worldwide, or 12% of total
                                                    IoT connections.

                                                                                Executive Summary     3
The Mobile Economy 2018 - GSMA
The Mobile Economy 2018

              Mobile contributing to economic growth and addressing
              social challenges
              In 2017, mobile technologies and services           As well as contributing to economic growth,
              generated 4.5% of GDP globally, a                   mobile technology is increasingly used for
              contribution that amounted to $3.6 trillion         disaster preparedness and response, and
              of economic value added. By 2022, this              to help address the challenges of access,
              contribution will reach $4.6 trillion, or 5%        cost and quality of service in key industries,
              of GDP, as countries around the globe               including healthcare, agriculture, utilities,
              increasingly benefit from the improvements          education and financial services. Two years
              in productivity and efficiency brought about        into the 2030 Agenda for Sustainable
              by increased take-up of mobile services and         Development, the mobile industry is
              M2M/IoT solutions. In 2017, the wider mobile        increasing its impact across all the 17 SDGs
              ecosystem also supported a total of 29 million      as a result of wider mobile reach and better
              jobs (directly and indirectly) and made a           networks. There is also growing adoption
              substantial contribution to the funding of the      of mobile-based tools and solutions that
              public sector, with almost $500 billion raised      aim to spur the digitisation of systems,
              through general taxation and $25 billion            processes and interactions across a number
              through mobile spectrum auctions.                   of industries, especially in low- and middle-
                                                                  income countries. Agriculture and healthcare
                                                                  are notable examples.

              Innovation reaching unprecedented levels in a fast-evolving
              ecosystem
              Globally, private equity companies, venture-        and in some cases moves into new business
              capital firms and corporates have invested          lines such as media, content and fintech.
              $1.2 trillion over the last five years to finance   Across Asia Pacific and Africa, collaboration
              tech start-ups and emerging companies in a          between mobile operators and start-ups is
              range of sectors, with an all-time record level     gaining momentum as operators have the
              of financing in 2017. This continues to support     scale and reach that start-ups lack, while
              innovation and development in technology            start-ups have the local innovation that
              areas such as IoT, augmented reality (AR),          operators need. Vodacom, MTN and Orange
              virtual reality (VR), networks, autonomous          have successfully collaborated with start-
              vehicles and the wider area of artificial           ups in Africa, as have Telenor and Axiata in
              intelligence (AI).                                  Asia. To support innovation across verticals
                                                                  and drive positive socioeconomic impacts,
              Recent trends and initiatives also show
                                                                  the GSMA Ecosystem Accelerator Innovation
              increasing corporate venture capital (CVC)
                                                                  Fund is rapidly moving to its third round of
              activity among operators in both developed
                                                                  applications for start-ups.
              and developing markets, to drive innovation

4   Executive Summary
The Mobile Economy 2018 - GSMA
The Mobile Economy 2018

Artificial intelligence is the next frontier
While the AI industry is currently dominated   the customer experience through better
by the big tech players in the US (Google,     understanding of customer behaviour.
Amazon, Apple, Facebook, Microsoft and
                                               As emerging technologies – including AI, IoT
IBM) as well as the Chinese ‘BAT’ companies
                                               and advanced data analytics – converge, 5G
(Baidu, Alibaba and Tencent), leading telcos
                                               could play an enabling role in realising their
across the world are also increasing their
                                               full potential. For example, IoT will require
focus on AI. From an operator perspective,
                                               both more pervasive intelligence and a
the range of AI-based applications is moving
                                               ubiquitous connectivity layer to allow devices
beyond chatbots and digital assistants,
                                               to communicate and to support the provision
already launched by a number of telcos
                                               of data analytics and intelligence on-demand.
across Europe and Asia. There is widespread
                                               Looking ahead, we expect this convergence
recognition that AI will be key to future
                                               to intensify, with AI increasingly integrated
business and digital transformation as
                                               into a growing number of IoT applications
well as driving increasingly autonomous
                                               and services as well as networks.
and intelligent networks and improving

Policy and regulation – extending the benefits of the digital age
For nearly three decades, policy and           competition and consumer welfare,
regulatory developments have supported         prescriptive (ex-ante) regulations should be
growth in the global mobile industry           replaced – where possible – with measurable,
by creating the conditions that attract        performance-based approaches.
investment and enable widespread access
                                               As the mobile industry moves into the 5G era,
to mobile services. However, regulatory
                                               the need for pro-investment, pro-innovation
reform has struggled to keep pace with the
                                               policies and modernised regulatory regimes
converged, highly dynamic and evolving
                                               has never been greater. Streamlined
digital ecosystem. Regulatory and policy
                                               regulation and further policy developments
objectives are best met by focusing on the
                                               in three main areas – spectrum, infrastructure
services delivered to consumers, rather than
                                               and economics – are key to realising the full
the type of company or technology that
                                               potential of 5G for consumers, societies and
delivers them. To promote market dynamism,
                                               industries.

                                                                          Executive Summary     5
The Mobile Economy 2018 - GSMA
GLOBAL MARKET
Unique                                                  Mobile
mobile                                                  internet
subscribers                                             users

5.0bn
2017

                                                         43%
                                                                PENETRATION RATE
                                                                 (% of population)    61%

66%
         PENETRATION RATE
                                71%                     3.3bn                        2017

                                                        5.0bn
          (% of population)              CAGR 2017–25

5.9bn
                                                                                                    CAGR 2017–25

                                           2.1%                                                          5.3%
2025                                                    2025

                                                            53%
Smartphones
                                              4G 29%
                                                        % of connections*
% of connections*

                57%
                                                                        2017                                  2025
                                  2017
                                  2025

                77%                           5G        1.2bn 14%                      2025   of connections*
                                                                                                *Excluding cellular IoT

SIM connections                                          Mobile operator
Excluding cellular IoT
                                                         revenue

7.8bn
                                                         2017

2017
                                                        $1.05tn
9.0bn
2025

 103%
          PENETRATION RATE
            (% of population)   110%
                                          1.9%
                                          CAGR
                                         2017–25        $1.10tn
                                                        2025
The Mobile Economy 2018 - GSMA
Mobile operator                                      Internet of Things
capex

                                                     7.5bn
$479bn
                                                                                  2017

                                                               Total connections

   2018      Capex (cumulative)        2020
                                                     25.1bn
                                                     2025

                 Mobile
                 industry
                                              4.5%   $3.6tn                       2017

                                                     $4.6tn
                 contribution
                 to GDP                       5.0%                                        2022

Public funding                                       Employment
Mobile ecosystem contribution
to public funding (before regulatory
and spectrum fees)

$500bn                                                        Number of jobs directly
                                                            and indirectly supported by
                                                                 mobile ecosystem

                                                     29m
2017

                                                                                          2017
The Mobile Economy 2018 - GSMA
The Mobile Economy 2018

             Global                            TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                    5G                 14% 4%            2025             2017              2025

                                         53%
                                                       29%
                                                                                  2G
                                                                                       66%                71%
                               4G
                                                       2017                            MOBILE INTERNET PENETRATION

                                               31%                         29%            2017              2025
                                                                   40%

                                                                                  3G
                                                                                       43%                61%

         Asia Pacific                          TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                    5G                 13%   5%          2025             2017              2025

                                         58%
                                                       34%
                                                                                  2G
                                                                                       67%               73%
                               4G
                                                       2017                            MOBILE INTERNET PENETRATION
                                                                            24%
                                                                                          2017              2025
                                                25%

                                                                                       41%               63%
                                                                   41%

                                                                                  3G

                CIS                            TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                    5G                 10%               2025             2017              2025

                                          58%          15%
                                                                                  2G
                                                                                       80%               82%
                                               35%
                               4G
                                                       2017                            MOBILE INTERNET PENETRATION

                                                                           32%            2017              2025

                                                             50%
                                                                                  3G
                                                                                       52%               72%

             Europe                            TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                    5G                 31%               2025             2017              2025

                                                       41%
                                                                           19%
                                                                                  2G
                                                                                       85%               88%
                                                                     22%
                               4G
                                                       2017                            MOBILE INTERNET PENETRATION

                                                                                          2017              2025

                                                                                       72%               82%
                                         49%
                                                      37%

                                                                                  3G

8   Executive Summary
The Mobile Economy 2018

     Latin America                                TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                          5G                 7%     5%            2025       2017               2025

                                                                                                             74%
                                                     66%
                                                             23%
                                                                                     2G
                                                                                          67%
                                     4G
                                                  43%        2017                  22%    MOBILE INTERNET PENETRATION

                                                                            34%
                                                                                             2017               2025

                                                                                     3G
                                                                                          50%                66%

           MENA                                   TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                          5G                 6%      6%
                                                                                  2025       2017               2025

                                                                                                             68%
                                                     51%

                                                      45%
                                                             9%
                                                                                     2G
                                                                                          62%
                                     4G
                                                             2017                         MOBILE INTERNET PENETRATION

                                                                                             2017               2025

                                                                      47%
                                                                            37%      3G
                                                                                          36%                 51%

    North America                                 TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                          5G                49% 3%                2025       2017               2025

                                                             68%     8%
                                                                                     2G
                                                                                          84%                86%
                                     4G
                                                             2017                         MOBILE INTERNET PENETRATION
                                                                             24%
                                                                                             2017               2025

                                                                                     3G
                                                                                          73%                80%
                                                                   47%

 Sub-Saharan Africa                               TECHNOLOGY MIX*                           SUBSCRIBER PENETRATION

                                          5G            29% 3%       6%           2025       2017               2025

                                                           36% 4%
                                                                                     2G
                                                                                          44%                52%
                                     4G
                                                             2017                         MOBILE INTERNET PENETRATION

                                                                                             2017               2025

                                                                                          21%                40%
                                               62%         60%

                                                                                     3G

*% of mobile connections excluding cellular IoT

                                                                                                           Executive Summary   9
The Mobile Economy 2018

     01
     Industry
     overview

10   Industry overview
The Mobile Economy 2018

1.1
Mobile industry set to reach major milestones
over the period to 2025
2017 was a milestone year for the mobile industry:          the end of 2017. Looking out to 2025, the mobile
the number of people connected to mobile services           industry will reach new major milestones across key
surpassed 5 billion globally, with 3.7 billion in           indicators – unique subscribers, internet users and
developing markets. As such, two out of three               4G/5G connections.
people in the world had a mobile subscription at

Figure 1                                                                                      Source: GSMA Intelligence

Major mobile milestones over the period to 2025

                                              Early 5G commercial launches                      1.2 billion 5G
                                                  across many markets                           connections

    TECHNOLOGY

                                               4G takes
                                               the lead

MOBILE INTERNET             Over
                                                                                                   5 billion
    USERS                 3 billion

  UNIQUE MOBILE                                                                                     Nearly
                          5 billion
   SUBSCRIBERS                                                                                     6 billion

                            2017                     2019                    2020                    2025

                                                                                               Industry overview          11
The Mobile Economy 2018

     1.2
     Mobile represents the highest scale consumer
     tech worldwide
     With more than 5 billion unique mobile subscribers                                              followed closely by Latin America and Asia Pacific
     at the end of 2017, mobile has a greater reach than                                             – this will largely be due to growing mobile network
     any other technology. Growth is slowing though as                                               coverage in rural areas and increasing affordability
     an increasing number of developed mobile markets                                                of both mobile devices and tariffs.
     are approaching saturation1; as such, it will take
                                                                                                     Mobile subscribers differ from mobile connections
     more than eight years to move from 5 to 6 billion
                                                                                                     such that a unique user can have more than one
     mobile subscribers compared to the four years
                                                                                                     SIM card. The number of connections excluding
     it took to move from 4 to 5 billion. Between 2017
                                                                                                     cellular IoT totalled 7.8 billion globally in 2017 and
     and 2025, India and China will add more than 200
                                                                                                     will reach 9.0 billion by 2025. There will therefore
     million and 70 million new subscribers respectively,
                                                                                                     be three SIM cards for every two subscribers (a SIM
     while Sub-Saharan Africa, Latin America and three
                                                                                                     ownership ratio of 1.5). In developing countries, the
     other major Asian countries (Pakistan, Indonesia
                                                                                                     SIM ownership ratio is often higher, especially in
     and Bangladesh) will generate a total of more than
                                                                                                     Sub-Saharan Africa (1.7), where many consumers
     350 million new subscribers.
                                                                                                     use multiple SIMs from different mobile operators,
     In terms of mobile penetration of population,                                                   often through dual-SIM handsets, to make use of
     Sub-Saharan Africa will have the largest increase                                               the best network coverage and call quality in certain
     between 2017 and 2025 (8 percentage points),                                                    locations.

     1.   By the end of 2017, 30% of the world’s mobile markets, including the majority of Europe, Russia, the US and Japan, had exceeded 85% penetration of their addressable market (those
          aged 5 years and older). As such, future unique subscriber growth in these markets will be closely linked to population growth.

12         Industry overview
The Mobile Economy 2018

Figure 2                                                                              Source: GSMA Intelligence

Unique mobile subscriber penetration
(Percentage of population)

                                                                               80% 81% 82%
                                      85% 86% 88%
   84% 84% 86%
                                                                                2017 2020 2025

                                      2017 2020 2025

   2017 2020 2025
                                                                                     CIS
                                                                    68%
                                                            62% 65%
                                         Europe

     North America                                                                                 73%
                                                            2017 2020 2025
                                                                                           67% 69%

                             74%
                     67% 70%
                                                                MENA                       2017 2020 2025

                     2017 2020 2025
                                                                                             Asia-Pacific
                                                52%
                                        44% 48%
                      Latin America
                                                  2025
                                        2017 2020

                                       Sub-Saharan Africa

                     66%
                     2017
                                               68% 2020
                                                                             71%
                                                                             2025

                                                  Global

                                                                                       Industry overview          13
The Mobile Economy 2018

     Although the divide in mobile adoption between              the highest and the lowest unique subscriber
     developed and developing regions will reach its             penetration will still be about 40 percentage points
     narrowest by 2025, significant differences remain at        in 2025. The 10 countries together account for
     the country level. For example, among the 10 most           nearly 60% of the global subscriber market.
     populous countries in the world, the gap between

     Figure 3                                                                                        Source: GSMA Intelligence

     Mobile penetration in the 10 largest countries by
     population
     Unique mobile subscribers as a percentage of population

         90%
                      86%          85%

                                              77%
                                                        75%
                                                                   72%

                                                                             63%
                                                                                        60%
                                                                                                     55%
                                                                                                                   50%

         89%
                      84%          82%        73%
                                                        68%        63%       53%        51%        49%            39%

         Russia        US          China    Indonesia   Brazil    Mexico     India   Bangladesh   Nigeria        Pakistan

                             Penetration in 2017            Increase           Penetration in 2025

14       Industry overview
The Mobile Economy 2018

1.3
Mobile internet – new large smartphone markets
emerge in the digital era
By 2025, mobile internet penetration will reach              and MiFi routers/hotspots). Smartphones will
61% of the global population and 86% of unique               become the leading handset type in all individual
subscribers. Most of the 1.75 billion increase in the        regions by 2020 and almost all individual countries
number of mobile internet users between 2017 and             globally by 2025.
2025 will come from China (around 350 million
                                                             While most developed countries are already highly
new users), India (330 million) and Sub-Saharan
                                                             penetrated, new large mobile internet markets are
Africa (280 million). Key drivers of growth include
                                                             emerging in the developing world. China overtook
increasing population coverage of 3G and 4G
                                                             the US to become the largest smartphone market
networks, more affordable smartphones and data
                                                             by installed base in 2012; four years later, India also
tariffs, and an increasing willingness among users to
                                                             overtook the US. Indonesia and Brazil are growing
consume social media and a range of services and
                                                             fast too; the number of smartphone connections in
content online.
                                                             Indonesia is approaching that of the US. By 2025,
Smartphone adoption will grow by 20 percentage               there will be more than 10 markets in the world
points globally between 2017 and 2025; by then,              with over 100 million smartphone connections.
three in four mobile connections will operate on             These represent major addressable markets for
smartphones, with the rest on basic/feature phones           e-commerce, fintech and a range of digitally
and data-only devices (e.g. cellular tablets, dongles,       delivered services and content.

Figure 4                                                                                            Source: GSMA Intelligence

Smartphone adoption
Smartphones as a percentage of total mobile connections excluding cellular IoT

                                                                                                   Top five smartphone
                                                                                                     markets (2025)*
      91%
80%               81%                      77%         77%                                                  China
                              76%                                  75%         73%                         1.4bn
            70%                                                                             68%
                        61%                                                                                  India
                                     57%         57%         55%                                           1.0bn
                                                                         52%
                                                                                                              US
                                                                                                          350m
                                                                                      34%
                                                                                                         Indonesia
                                                                                                          320m
                                                                                                            Brazil
                                                                                                          200m
  North      Europe      Latin         Asia       Global       CIS        MENA       Sub-Saharan
 America                America       Pacific                                           Africa
                                                                                                       *By installed base;
                                                                                                         country level;
                                                                                                      approximate figures
                                    2017         2025

                                                                                                     Industry overview          15
The Mobile Economy 2018

     1.4
     Transitioning from the connected consumer to
     the digital consumer
     While more than 3 billion people use mobile internet       (those who regularly consume digital services and
     globally (internet-connected consumers), their             content via their smartphones) has been fastest in
     digital engagement – measured by the GSMA                  some of the most developed and tech-advanced
     Global Mobile Engagement Index (GMEI) – varies             markets such as the US, South Korea, Australia
     significantly between countries. On a scale of 0–10,       and across Scandinavia. Indeed, the most highly
     South Korea (6.8), Scandinavian countries (e.g.            engaged smartphone users (‘Aficionados’) are
     Finland at 6.7, Sweden at 5.8), Australia (5.5) and        predominant in North America, while the least
     the US (5.3) have relatively high mobile engagement        engaged (‘Networkers’ and ‘Talkers’) dominate in
     scores (2017); many subscribers in these countries         most developing countries. See Figure 5.
     use their phones on a regular basis to access not
                                                                Two major trends will occur over the next decade.
     only internet-based messaging and social media
                                                                In the developing world, smartphone users will
     but also entertainment content (such as movies,
                                                                gradually transition to higher levels of engagement.
     music, games and sports), e-commerce and other
                                                                In the most developed markets, today’s digital
     digitally delivered services and content (i.e. financial
                                                                consumers will likely become tomorrow’s
     services, health, education, government services).
                                                                augmented customers in the 5G era; they will
     Pakistan, India and Tanzania have the lowest scores
                                                                increasingly adopt emerging technologies such
     (at around 1.0).
                                                                as augmented reality; virtual reality; technology
     A deeper look at the segmentation groups of                solutions and applications for smart homes, cities
     smartphone users by their mobile engagement                and buildings; and emerging services such as drone
     pattern reveals that the transition from the               delivery, consumer robotics and autonomous cars.
     connected consumer to the digital consumer

16      Industry overview
The Mobile Economy 2018

Figure 5                                                                   Source: GSMA Global Mobile Engagement Index

Consumer mobile engagement, 2017

                                SMARTPHONE USER SEGMENTATION BY ENGAGEMENT PATTERN
                                         (Percentage of total smartphone users)

                           Aficionados          Pragmatists         Networkers                    Talkers
                           Early adopters       Early majority      Late majority                Laggards

 North America                 53%                   36%                 5%                         6%

 Europe                        46%                   42%                 5%                         7%

 Middle East & North
 Africa                        34%                   33%                25%                         8%

 East Asia/Pacific             26%                   36%                24%                         14%

 Latin America                  12%                  45%                 31%                        12%

 South Asia                     9%                   24%                32%                        35%

 Sub-Saharan Africa            14%                   18%                49%                         19%

Migration to smartphones that operate on high-         As video technology continues to evolve (i.e. 4K,
speed mobile networks, coupled with increasing         8K, 3D video, 360-degree video) and video-based
consumer propensity to engage in the digital           content is increasingly consumed across all regions
world, is driving mobile data traffic up in all        and use cases, video will account for around 75%
regions. According to Ericsson (in its Mobility        of mobile data traffic worldwide by 2023, up from
Report November 2017), global mobile data traffic      55% in 2017 (Ericsson). Newer applications that
for all devices will increase eight-fold between       make content even more immersive and data
2017 and 2023, reaching 110 exabytes per month.        intensive (such as AR and VR), as well as the future
Smartphones will account for close to 95% of total     availability of 5G networks, will also be drivers of
mobile data traffic by 2023.                           video traffic growth in the most developed markets.

                                                                                               Industry overview         17
The Mobile Economy 2018

     1.5
     4G takes the lead in 2019, while 5G moves from
     trials to commercialisation
     In terms of number of mobile connections, 4G             years. As well as most of Europe, the list of countries
     will become the lead mobile network technology           includes Australia, China, Hong Kong, India, Japan,
     in 2019 (at more than 3 billion) and will continue       South Korea and the US.
     to dominate over the period to 2025. Developing
                                                              While 4G has been driving and enabling the
     markets are driving overall 4G connections growth.
                                                              transition from the connected consumer to the
     Of the 2.5 billion new 4G connections over the next
                                                              digital consumer during 2010–2020, 5G will play
     eight years, 1.1 billion will come from three major
                                                              a key role in the transition to the augmented
     markets in Asia (India, China and Indonesia) and a
                                                              consumer in the longer term. Today’s digital
     further 1 billion will come from Latin America, Middle
                                                              consumers are the key addressable market for 5G
     East and North Africa, and Sub-Saharan Africa.
                                                              services. Many of these consumers will increasingly
     Meanwhile, the mobile industry continues to make         adopt a range of technologies that are expected to
     progress with 5G, with early commercial launches         benefit from the faster speeds and lower latencies
     expected over the next three years in North America      promised by 5G. These include advanced video
     and in major markets across Asia and Europe. The         capabilities (i.e. 4K, 8K, 3D video, 360-degree video
     US will see its first commercial launch in late 2018.    for sports broadcasting), AR and VR applications for
     The non-standalone 5G new radio (NSA 5G NR)              gaming and immersive TV, autonomous cars, and
     specifications were officially approved in December      digital services and content for connected stadia
     2017 as part of a wider plan that targets complete       and smart cities.
     standardisation of the 5G system for both non-
                                                              China, the US and Japan will be the leading
     standalone and standalone models by mid-2018.
                                                              countries in terms of connections by 2025, while
     A large number of 5G trials are also currently being
                                                              Europe as a whole will continue to make progress
     conducted worldwide using various spectrum
                                                              with 5G deployment. In total, these four economies
     bands, especially 3.5 GHz and 26/28 GHz. More
                                                              will account for more than 70% of the global 5G
     than 30 markets are planning to assign spectrum in
                                                              market in 2025 – nearly 900 million connections in
     these two spectrum bands over the next couple of
                                                              a global market that will reach 1.2 billion.

     Fixed wireless
     Fixed wireless will be an initial 5G-based use case      the opportunity expands to around 30 million
     in the US, with early commercial launches in 2018        households outside of its existing fibre footprint.
     following trials in 2017. Verizon will launch in three   For operators, 5G-based fixed wireless offers a
     to five US markets in the second half of 2018.           potentially lower cost and faster means – compared
     The company is targeting a 20–30% penetration            to FTTH – of expanding high-speed offerings
     rate in these markets, with an initial focus on the      to households and businesses, bringing the
     residential space. Verizon plans a broader rollout in    opportunity to gain market share and incremental
     2019 and has indicated that over a three-year period     revenue.

18      Industry overview
The Mobile Economy 2018

Figure 6                                                                                          Source: GSMA Intelligence

Global mobile adoption by technology
Share of mobile connections, excluding cellular IoT

                                                                                                                53%     4G

                                                                                                                29%     3G

                                                                                                                 14%    5G

                                                                                                                 4%     2G

    2015    2016       2017        2018      2019         2020    2021      2022         2023      2024          2025

                         5G adoption in major countries/regions
                              (2025, percentage of connections excluding cellular IoT)

                                                    US            JAPAN            EUROPE               CHINA

                                               49%               45%               31%                 25%
              Global

            14%                                     CIS                                                   SSA
                                                                  LATAM             MENA

                                               10%                7%               6%                   3%

                                                                                                   Industry overview          19
The Mobile Economy 2018

     1.6
     Financial outlook – pressure on traditional
     mobile revenue, while 5G capex still uncertain

     Challenging revenue outlook for traditional
     mobile services
     Slowing unique subscriber growth, regulatory           Europe‘s mobile revenue over the period to 2025
     intervention and intense competition continue          will also be roughly stable across the majority of
     to put pressure on operators’ traditional mobile       markets. After several consecutive years of mobile
     revenues. Global revenue will grow by around 1%        revenue declines (since 2008), the European mobile
     between 2017 and 2020 (CAGR) and will roughly          sector is benefitting from a lessening regulatory
     stabilise beyond 2020 at $1.1 trillion.                impact, in-market consolidation, a shift to higher
                                                            4G data usage and an improved macro-economic
     China offers the largest revenue growth opportunity
                                                            performance across many countries.
     for operators. Despite growth slowing, especially
     beyond 2020, China will account for around 40%         Cross-sector competition is also intensifying in the
     of global mobile revenue growth between 2017 and       digital era; taking a share of the consumer wallet is
     2025. Three major Chinese mobile operators will        increasingly challenging for companies across the
     grasp this opportunity, while smaller revenue growth   telecoms, media and technology (TMT) ecosystem.
     in Sub-Saharan Africa, Middle East and North Africa,   Internet-based subscriptions for films and music are
     and Latin America will be spread across a larger       growing rapidly, and new devices and technologies
     number of operators.                                   are entering the market such as home speakers,
                                                            AR, VR, and the wider consumer Internet of Things.
     In the US, competition has reached unprecedented
                                                            This adds revenue pressure to the most established
     levels; unlimited plans are now the norm and
                                                            streams including mobile and fixed access,
     traditional mobile revenue is under pressure after
                                                            smartphones and traditional media content.
     years of growth. However, despite near-stable
     revenue going forward, the US will remain the
     largest mobile market in the world by revenue
     ($245 billion in 2025).

20      Industry overview
The Mobile Economy 2018

Figure 7                                                                                              Source: GSMA Intelligence

Mobile revenue outlook
$ billion

1,200
                                 1,051                        1,080                               1,095
                                  403                         426                                  443
1,000

                                                                                                               China driving
                                                                                                                most of the
 800                                                                                                             increase

 600
                                  648                         654                                  651

 400

                                                                                                               Europe and
                                                                                                              North America
                                                                                                                nearly flat
 200

    0
            2015       2016        2017        2018   2019    2020    2021   2022   2023   2024    2025

                                                  Developed           Developing

Note: totals may not add up due to rounding.

                                                                                                          Industry overview       21
The Mobile Economy 2018

      Mobile industry capex has peaked for 4G but 5G to come
      post-2020
      Between 2018 and 2020, mobile operators will                              There is little guidance on 5G operator mobile capex
      invest $0.5 trillion worldwide in mobile capex,                           around the globe. Ultimately, it will depend on a
      excluding spectrum acquisitions. Some operators in                        number of factors including the model (standalone,
      the most developed markets are upgrading their 4G                         non-standalone or phased approach) selected for
      networks to faster speeds and lower latencies, while                      5G network deployments, the targeted network
      5G investment is still in its infancy. In developing                      coverage, the range of spectrum bands in use, and
      countries, many operators are still investing in                          the availability of fibre infrastructure and nationwide
      increasing the coverage and capacity of their 3G                          LTE networks. It is also reasonable to assume a
      and 4G networks.                                                          gradual rollout path; indications from the Chinese
                                                                                mobile operators are that 5G investment will follow
      The expansion of 5G to a larger footprint could
                                                                                a more gradual route and over a longer period
      require incremental capex, above the approximately
                                                                                than 4G, roughly seven years, from 2018 to 2025.
      $160 billion expected in 2020. As many mobile
                                                                                Japanese operators claim that the deployment of
      markets face pressure on traditional mobile
                                                                                5G will not lead to any significant spike in capex.
      revenues, any further capex increase beyond 2020
      would push global capex as a percentage of revenue
      above the 15% expected during 2018–2020.

       Figure 8                                                                                                            Source: GSMA Intelligence

      Global capex and network coverage

                          250

                                                                                                                                  79%
                         200

                                                                                                                                              Network coverage (% of population)

                          150
     Capex ($ billion)

                          100

                           50

                                                                                                                                   11%
                                 2%                                                                                 2%
                            0
                                 2010        2011   2012   2013    2014      2015       2016       2017      2018   2019          2020

                                                           Capex          4G coverage          5G coverage

22                       Industry overview
The Mobile Economy 2018

1.7
Major operators exploring adjacent businesses in
an evolving ecosystem
The largest operators are moving beyond their            and bags, as well as home security.
traditional telco businesses (mobile and fixed) to
                                                         Several operators – such as Turkcell in Turkey and
explore new revenue streams in a fast-changing
                                                         SK Telecom, Singtel and NTT DoCoMo in Asia – are
competitive landscape. While this strategic
                                                         also targeting the wider digital consumer space
play has different flavours, timelines and scales,
                                                         by offering a range of digital services and content
the predominant drivers are the convergence
                                                         including fintech, e-commerce, content, lifestyle,
of telecoms and media, the rise of IoT and the
                                                         advertising/digital marketing, identity and security
evolution of the wider digital ecosystem.
                                                         solutions. In the fintech market, Orange Bank
In the US, AT&T is taking a lead position in the Media   launched across France in November 2017, offering
and Entertainment industry, although its Time            a full consumer banking service on a mobile-only
Warner bid – which follows that of DirecTV in 2014       platform.
– is still subject to regulatory approval. Verizon has
                                                         While telecoms will continue to be the dominant
also made a number of acquisitions across several
                                                         source of revenue for operators, these new
areas – digital media and advertising (Yahoo and
                                                         businesses provide new revenue streams, help
AOL), IoT (telematics and smart cities) and fibre
                                                         navigate the IoT learning curve and add business
networks – ahead of the 5G era.
                                                         capabilities in the digital space. For example,
In the IoT space, many European operators such           Turkcell makes nearly 20% of its domestic revenue
as Telefónica, Orange and Vodafone have IoT-             from digital services, while Smart Life accounts for
dedicated lines of business that provide solutions       10% of NTT DoCoMo’s revenue (both as of Q3 2017).
across verticals. In November 2017, Vodafone also        In the US, AT&T makes 26% of its revenue (2017)
launched ‘V by Vodafone’ in Germany, Italy, Spain        from DirecTV – this figure could become nearly 40%
and the UK. This is a consumer-oriented IoT product      if the acquisition of Time Warner goes through.
range that includes tracking solutions for cars, pets

                                                                                               Industry overview   23
The Mobile Economy 2018

     1.8
     Scaling the Internet of Things – 25 billion
     connections by 2025
     According to GSMA Intelligence, the number of                                               • Funding and innovation – IoT start-ups are
     IoT connections (cellular and non-cellular) will                                              increasingly backed by private investor financing
     increase more than threefold worldwide between                                                and a supportive ecosystem for innovation.
     2017 and 2025, reaching 25 billion. While IoT is                                              Amazon, Cisco, GE, Google, Intel, Microsoft,
     rapidly becoming a mainstream technology in                                                   Qualcomm and Samsung have invested significant
     consumer markets such as consumer electronics                                                 amounts into the developing IoT arena over the
     and smart homes, the industrial IoT segment is still                                          last five years. Some of them are also adopting a
     in its infancy – but is set to be the largest source of                                       horizontal business model by establishing their
     connections growth going forward. Globally, the                                               presence across multiple sectors and segments
     industrial connections base will overtake consumer                                            of the IoT value chain. A growing number of
     IoT connections in 2023.                                                                      companies (such as Sierra Wireless, Gemalto,
                                                                                                   MobileTEK, Quectel and Telit) commercialise
     A number of trends will drive development and
                                                                                                   mobile IoT2 modules for both LTE-M and NB-IoT,
     growth in the IoT ecosystem over the period to
                                                                                                   typically supported by software development
     2025:
                                                                                                   kits. Some mobile operators and equipment
                                                                                                   vendors are also establishing open labs to help
                                                                                                   solution developers test new concepts and certify
                                                                                                   products.
     Figure 9                                                                                                                                               Source: GSMA Intelligence

     IoT connections worldwide
     Billions

        25

        20
                                                                                                                                                                       4.7x
        15
                                                                                                                                                                   Growth
                                                                                                                                                                  2017-2025
        10

         5
                                                                                                                                                                       2.5x

         0
                 2015         2016         2017         2018          2019        2020          2021         2022         2023         2024          2025

                                                                    IoT connections include cellular and non-cellular connections. The term IoT connections refers to
                Consumer                   Industrial               devices capable of two-way data transmission (excluding passive sensors and RFID tags). It includes
                                                                    connections using multiple communication methods such as cellular, short-range and others.
                                                                    Excludes PCs, desktops, tablets, laptops, e-readers and smartphones.

     2. Mobile IoT refers to low power wide area (LPWA) 3GPP standardised secure operator managed IoT networks in licensed spectrum; in particular, LPWA networks designed for IoT
        applications that are low cost, use low data rates, require long battery lives and often operate in remote and hard to reach locations.

24        Industry overview
The Mobile Economy 2018

• Development in connectivity to best suit a                                                    the US and in other regions such as China (part
  variety of use cases – While the majority of                                                  of the 13th Five Year Plan), Singapore (Smart
  IoT devices – typically in indoor environments                                                Nation), India (100 Smart Cities Mission) and
  – will likely be connected by radio technologies                                              Qatar (2022 FIFA World Cup). Dubai is also taking
  designed for short-range connectivity (such as                                                a lead role in preparation for Dubai Expo 2020;
  Wi-Fi, Z-Wave and Zigbee), other IoT devices that                                             the CEO of the Smart Dubai project announced
  require wide-area network coverage, coverage on                                               the ambition for 25% of all journeys in Dubai to be
  the move, lower latency and ultra-reliability will                                            autonomous (i.e. driverless) by 2030.
  likely be primarily connected by cellular networks
                                                                                              • The rise of smart homes – Smart homes are
  using licensed spectrum. At the end of 2017, there
                                                                                                increasingly becoming a platform for a suite
  were 30 commercial deployments of LTE-M and
                                                                                                of digital services, applications and devices,
  NB-IoT across 20 countries, including the US,
                                                                                                and will be the largest source of growth within
  China and across Europe. Looking out to 2025,
                                                                                                the consumer segment. Connections will grow
  licensed cellular IoT connections3 will reach 3.1
                                                                                                threefold to more than 5 billion by 2025, driven by
  billion worldwide, or 12% of total IoT connections.
                                                                                                home security, thermostats for energy monitoring,
• Proliferation of use cases across verticals – The                                             and enabling infrastructure such as routers and
  number of industrial IoT connections will grow                                                extenders.
  from 3 billion to almost 14 billion between 2017
                                                                                              Asia Pacific will continue to be the largest regional
  and 2025, driven by rising adoption of solutions
                                                                                              IoT market by number of connections. In terms of
  for smart buildings (for heating, air conditioning,
                                                                                              growth, nearly 90% of all IoT net additions between
  building security, lighting, office equipment
                                                                                              2017 and 2025 will be in Asia Pacific, North America
  and automation), utilities (energy, water & gas
                                                                                              and Europe. Developing markets will lag behind in
  smart metering and smart grid solutions) and
                                                                                              growth and scale due to lower affordability among
  manufacturing (inventory tracking, monitoring
                                                                                              consumers and enterprises, and a less developed
  and diagnostics, warehouse management).
                                                                                              ecosystem and environment for innovation and
• Momentum in smart cities – Smart city initiatives                                           technology deployment.
  are on the rise across major metropolitan areas in

Figure 10                                                                                                                        Source: GSMA Intelligence

IoT connections and growth by region
Billions

                                                2017                                    Increase (billions)                                    2025

             Asia Pacific                         2.8                                                                             8.1           10.9
            North America                         1.9                                                   3.9                                      5.8
               Europe                             1.7                                             3.2                                            4.9
            Latin America                         0.4                     0.9                                                                    1.3
                MENA                              0.3                    0.8                                                                     1.1
                  CIS                             0.2                 0.4                                                                        0.6
     Sub-Saharan Africa                           0.1              0.2                                                                           0.3
3. Licensed cellular IoT refers to cellular M2M (2G/3G/4G/5G) and mobile IoT (NB-IoT/LTE-M)

                                                                                                                                  Industry overview          25
The Mobile Economy 2018

     02
     Mobile
     contributing
     to economic
     growth and
     addressing
     social
     challenges

     Mobile contributing to economic growth and
26   addressing social challenges
The Mobile Economy 2018

2.1
Mobile contribution to economic growth,
employment and public funding

The direct economic contribution of the mobile ecosystem
The mobile ecosystem consists of mobile operators;      employee compensation, business operating surplus
infrastructure providers; retailers and distributors    and taxes.
of mobile products and services; mobile device
                                                        In 2017, the total value added generated by the
manufacturers; and mobile content, application and
                                                        global mobile ecosystem was $1.1 trillion (or 1.4% of
service providers. The direct economic contribution
                                                        GDP), with mobile operators accounting for more
to GDP of these firms is estimated by measuring
                                                        than 60% of this.
their value added to the economy, including

Figure 11                                                                                       Source: GSMA Intelligence

Direct contribution of the mobile ecosystem to GDP
$ billion, % 2017 GDP

                                 690

                                 0.9%

                                                       120                 110                       110
                70
                                                       0.2%                0.1%                      0.1%
                0.1%
            Infrastructure       Mobile              Device           Distributors and      Content, applications
              providers         operators         manufacturers           retailers          and other services

                                                                       Mobile contributing to economic growth and
                                                                                       addressing social challenges         27
The Mobile Economy 2018

     Indirect and productivity impacts of mobile technology
     In addition to their direct economic contribution,               • 3G and 4G technology allow workers and firms
     firms in the mobile ecosystem purchase inputs from                 to use mobile data and internet services. This
     their providers in the supply chain. For example,                  improves access to information and services,
     device manufacturers purchase inputs from                          which in turn drives efficiency in business
     microchip providers, and mobile content providers                  processes across many industries, including
     require services from the broader IT sector.                       finance and health. The impact of mobile internet
     Furthermore, some of the profits and earnings                      is particularly significant in developing countries,
     generated by the mobile ecosystem are spent                        where fixed infrastructure is poor and mostly
     on other goods and services, stimulating further                   confined to large cities and business/industrial
     economic activity in those sectors. We estimate that               districts.
     in 2017, this additional economic activity generated
                                                                      • M2M and IoT allow for the digitisation of services
     a further $490 billion in value added globally (or
                                                                        and improvement of industrial processes. As
     0.6% of GDP).
                                                                        these technologies become increasingly adopted,
     The use of mobile technology also drives                           we expect them to create significant benefits by
     improvements in productivity and efficiency                        driving cost savings and operational efficiency
     for workers and firms. Different types of mobile                   gains in areas such as manufacturing, logistics
     technology have their own impact on the                            and retail.
     productivity of the global economy:
                                                                      Together, these productivity impacts generated
     • Mobile voice and text services allow workers                   $2 trillion in value added in 2017 (or 2.5% of GDP).
       and firms to communicate more efficiently and                  Overall, taking into account the direct, indirect and
       effectively (by reducing unproductive travel time,             productivity impacts, in 2017 the mobile industry
       for example).                                                  made a total contribution of $3.6 trillion in value-
                                                                      added terms, equivalent to 4.5% of global GDP.

     Figure 12                                                                                            Source: GSMA Intelligence

     Total (direct, indirect and productivity) contribution to GDP
     $ billion, % 2017 GDP

                                                                                    2,010               3,600

                                                                                     2.5%

                                                            490                                           4.5%

                                                    410     0.6%

                    690                             0.5%

                    0.9%

                   MOBILE                       RELATED    INDIRECT              PRODUCTIVITY             TOTAL
                 OPERATORS                    INDUSTRIES                                                 IMPACT

                           MOBILE ECOSYSTEM

     Note: totals may not add up due to rounding.

         Mobile contributing to economic growth and
28       addressing social challenges
The Mobile Economy 2018

Employment
In 2017, mobile operators and the wider mobile                                  sector. Furthermore, the wages, public funding
ecosystem provided direct employment to almost                                  contributions and profits paid by the mobile
12 million people across the world. In addition                                 industry are spent in other sectors, which provide
to this, economic activity in the ecosystem                                     additional jobs.
generated jobs in other sectors. Firms that provide
                                                                                We estimate that in 2017, around 17 million
goods and services as production inputs for the
                                                                                additional jobs were indirectly supported in this way,
mobile ecosystem (for example, microchips or
                                                                                bringing the total impact (both direct and indirect)
transport services) will employ more workers as
                                                                                of the mobile industry to 29 million jobs.
a result of the demand generated by the mobile

Figure 13                                                                                                       Source: GSMA Intelligence analysis

Employment impact
Jobs (million), 2017

                                                                                                               17                     29

                                                                                                             INDIRECT
                                          DIRECT
                                                                         CONTENT,
                                                                       APPLICATIONS
                                                       DISTRIBUTORS    AND SERVICES
                                                       AND RETAILERS                                                                 TOTAL
                                                                            1                  12
                                                            4
                                          DEVICE
                                       MANUFACTURERS
                          MOBILE
                        OPERATORS
                                               2
      INFRASTRUCTURE
         PROVIDERS
                            3                                                                 DIRECT

            1

Note: totals may not add up due to rounding.

                                                                                              Mobile contributing to economic growth and
                                                                                                              addressing social challenges           29
The Mobile Economy 2018

     Public funding contribution

     The mobile ecosystem also makes a significant                                         contributions of firms and employees. We estimate
     contribution to the funding of the public sector                                      that the ecosystem made a tax contribution to the
     through general taxation. In most countries, this                                     public finances of governments of $500 billion in
     includes value-added tax or sales tax, corporation                                    2017.
     tax, income tax and social security from the

     Figure 14                                                                                                             Source: GSMA Intelligence analysis

     Contribution to public funding by the mobile industry
     $ billion, 2017

                                                                                                 EMPLOYEE INCOME TAX AND
                                                                                                     SOCIAL SECURITY

                                                                                                         160                            500

                                                                             CORPORATION
                                                                                 TAX

                                                                                90
                                              HANDSET VAT, SALES TAXES AND
                                                   CUSTOMS DUTIES

                 MOBILE SERVICES VAT, SALES
                                                        100
                  TAXES AND EXCISE DUTIES
                                                                                                                                         TOTAL

                          150

     Note: totals may not add up due to rounding.

     Besides the public funding contributions through                                      billion) raised in the 600 MHz auction in the US.
     general taxation, mobile operators made                                               Additionally, in some countries, mobile operators
     contributions via two additional channels. In 2017,                                   are subject to sector-specific taxes such as revenue
     revenues gained from the auction of spectrum                                          share taxes, universal service obligation fund
     for mobile services totalled approximately $25                                        contributions, SIM and airtime voucher taxes or
     billion, with more than three quarters of this ($19                                   annual spectrum fees.

         Mobile contributing to economic growth and
30       addressing social challenges
The Mobile Economy 2018

Outlook and trends for the next five years

We expect the global economic contribution of the             Most of this value-added increase will be due
mobile ecosystem to continue to increase in both              to productivity gains. In the developed world,
relative and absolute terms. In value-added terms,            the adoption of M2M and IoT solutions will drive
we estimate that mobile will contribute $4.6 trillion         increased productivity. In developing countries,
to the global economy by 2022 (5% of GDP), up                 productivity growth will be mostly driven by the
from $3.6 trillion in 2017 (4.5% of GDP).                     adoption of mobile internet services.

Figure 15                                                                                     Source: GSMA Intelligence analysis

Outlook to 2022, value added
$ billion, % of GDP

 4,000

  3,500
                                                                                                           5.0%
                                                                                     4.9%
                                                      4.7%         4.8%
  3,000
                                           4.6%
                    4.5%
  2,500
                                                                                                         2,840
                                                                  2,480            2,660
  2,000
                  2,010                   2,160      2,310
  1,500

  1,000            490                     500        520          520              530                    550

    500
                  1,100                   1,150      1,170         1,190            1,220                 1,260
      0
                    2017                   2018       2019         2020              2021                  2022

                                   Ecosystem      Indirect   Productivity     % GDP

Note: totals may not add up due to rounding.

                                                                            Mobile contributing to economic growth and
                                                                                            addressing social challenges           31
The Mobile Economy 2018

     Mobile contributing to economic growth and
32   addressing social challenges
The Mobile Economy 2018

 2.2
 The growing impact of mobile on the
 Sustainable Development Goals
 At Mobile World Congress 2016 in Barcelona, the mobile industry became the first sector to commit as a
 whole to the Sustainable Development Goals (SDGs) – a universal plan unanimously adopted in 2015 by all
 193 countries in the United Nations General Assembly to end poverty, protect the planet and ensure that all
 people enjoy peace and prosperity.
 Two years into the 2030 Agenda for Sustainable Development, the mobile industry is having an important
 impact, demonstrated by its growing contribution across all 17 SDGs.4 The greatest upward movements
 between 2015 and 2016 were in SDG 3 – Good Health and Well-being, SDG 11 –Sustainable Cities and
 Communities, and SDG 13 – Climate Action. Of these, two (SDG 13 and 11) are also the SDGs to which the
 industry is contributing the most (2016 score), along with SDG 9 – Industry, Innovation and Infrastructure.

 While operators contribute to each SDG in different ways, three major underlying trends explain much
 of the improvement in the industry’s impact across all the SDGs between 2015 and 2016:

                     Better networks
                     Mobile operators have invested heavily in mobile broadband network infrastructure. Between
                     2015 and 2016, 4G population coverage grew from 48% to 66% of the world’s population.
                     Including 3G, mobile broadband network coverage reached 83% (2016). In addition to providing
                     wider access to mobile and mobile broadband services, improved network quality and resilience
                     play a critical role before and during epidemics, conflicts and natural or climate-related disasters.
                     They support emergency communication and broadcast services and provide accurate and
                     timely information on the movement of affected populations.

                     More connectivity
                     Operators continue to connect the unconnected and drive development in the cellular M2M
                     space. The economic and social benefits of this are wide-ranging, with connectivity driving
                     improvements in economic growth through improved productivity, infrastructure development
                     and efficiency. Operators have been particularly proactive in pursuing more innovative solutions
                     to roll out mobile networks in remote areas; making mobile services more affordable to the
                     poorest individuals; and driving efforts to accelerate digital inclusion for women.

                     Doing more with mobile
                     Connected consumers are increasingly engaged in the digital world and consume a range of
                     mobile-enabled services for education, agriculture, health, finance and utilities. Looking at the
                     drivers of SDG score improvement between 2015 and 2016, in 2016 more than 100 million new
                     mobile money accounts were registered to reach a total of more than 0.5 billion, allowing users
                     to access financial services that enable them to make investments and manage expenses. There
                     were also 500 million new users of social media on mobile to reach a total of 2.5 billion, helping
                     promote social and political inclusion and facilitating the development of education networks.

4. 2017 Mobile Industry Impact Report: Sustainable Development Goals, GSMA, 2017

                                                                                   Mobile contributing to economic growth and
                                                                                                   addressing social challenges   33
The Mobile Economy 2018

     Figure 16                                                                                                      Source: GSMA Intelligence

     SDG impact scores
     Normalised score (out of 100)

                           High                                             Medium                                     Low
                         Potential                                          Potential                                Potential

                               3.2
                                               4.1                                      3.9
        3.2 2.8 2.4                                                  3.1
                               41.6                                                                                          2.8 2.8
                                        3.4    37.4           4.1              2.9      36.5
                                                                                               2.4 3.5
        34.3      34.4 33.6                                          35.6
                                                                                                             2.7             32.6 33.9
                                        29.8           3.0                    30.0             30.8
                                                                                                      28.7          3.3
                                                              27.3
                                                                                                             25.5
                                                       22.7                                                         21.2

          1        5     8      9       10     13       2      3      4         7        11    12     17      6      14       15      16

                                                      2015 Impact               2016
                                                         score              Improvement

         Mobile contributing to economic growth and
34       addressing social challenges
The Mobile Economy 2018

Moving forward – key challenges and initiatives
Although the mobile industry is delivering                 to maximise their impact across all the SDGs.
substantial achievements and its impact is growing
                                                           The GSMA – in collaboration with operators – has
across all SDGs, it is still far from realising its full
                                                           made several commitments and is working on a
potential impact. On a scale of 0–100 (where a score
                                                           number of initiatives to grow the mobile industry’s
of zero means no impact at all and a score of 100
                                                           impact. See Figure 17. During 2018, the GSMA
means the industry is doing everything possible to
                                                           will focus on delivering these commitments. In
influence that SDG), SDG 9 – Industry, Innovation
                                                           September 2017, the GSMA also launched a new
and Infrastructure had the highest score in 2016 at
                                                           global campaign – Case For Change – that will put
nearly 45, followed by SDG 13 – Climate Action and
                                                           the spotlight on the work of the mobile industry
SDG 11 – Sustainable Cities and Communities, both
                                                           to help achieve the SDGs and, in doing so, connect
at just over 40. The overall impact remains lowest
                                                           everyone and everything to a better future.
for SDGs 14 – Life below Water, 2 – Zero Hunger, and
6 – Clean Water and Sanitation.                            Meanwhile, the GSMA and the mobile industry will
                                                           continue to report on its progress each year and
Mobile operators, working with the broader mobile
                                                           will continue to develop and improve the evidence
ecosystem, still have much to do to contribute to
                                                           used to track operators’ impact on the SDGs. With
achieving the SDGs. This includes working towards
                                                           this framework in place, both the industry and the
universal access, scaling up new solutions such
                                                           international community will be able to understand
as IoT, and helping to fill gaps in areas such as
                                                           the impact, progress, challenges and ultimately
health, education, finance and utilities through the
                                                           action needed for the mobile industry to harness its
development of mobile-enabled solutions. Only
                                                           full potential to achieve the SDGs.
when this has been achieved will operators be able

                                                                         Mobile contributing to economic growth and
                                                                                         addressing social challenges   35
The Mobile Economy 2018

     Figure 17                                                                                  Source: GSMA

     GSMA initiatives to grow mobile industry impact on SDGs

                                                          Big Data
                                                         for Social
                                                           Good

                                  GSMA                                  National
                              organisational                           Dialogues
                             programmes and                            for Digital
                                initiatives                              Impact

                  Partnerships                          GSMA                          We Care
                  for the Goals
                                                      initiatives                    Campaign

                                Mobile for                             Connected
                               Development                               Women
                                  (M4D)                               Commitment
                                Initiatives                             Initiative

                                                          IoT Big
                                                           Data

         Mobile contributing to economic growth and
36       addressing social challenges
The Mobile Economy 2018

2.3
Disaster response and the central role of mobile
technology
From Nepal’s 2015 earthquake to the recent                                            In response to the growing challenge, mobile
unprecedented hurricanes in the Caribbean, mobile                                     operators, humanitarian organisations and
technology is being used to support preparedness                                      innovation labs around the globe are exploring
and response activities and to maintain dignity for                                   the potential role of mobile technology in disaster
those impacted by natural and man-made disasters.                                     preparedness and response. The GSMA recently
There are a growing number of examples of mobile                                      launched the Disaster Response Innovation Fund
technology being used in innovative ways in disaster                                  providing an opportunity to unite these efforts,
and humanitarian preparedness and response as                                         linking initiatives which have mutual goals and
well as helping people after natural events – from                                    bringing their innovative ideas to life.5
‘super base stations’ to innovative connectivity
                                                                                      It is essential that both the mobile industry and
provision for displaced populations, humanitarian
                                                                                      the humanitarian sector continue to innovate in
call centres and digitised response activities, to
                                                                                      order to improve their capacity to deal with crises,
country-wide early warning systems.
                                                                                      and ensure that the needs of affected populations
New technology-enabled services have supported                                        can be met. While great strides are being made
communities and increased resilience around the                                       in the development of innovative services and
world. As natural and man-made disasters increase                                     solutions, no single sector can tackle the scale
in their frequency and impact, so the number of                                       of the challenges alone. The Disaster Response
people requiring help is growing. More than 90                                        Innovation Fund will support collaboration that has
million people across the world will have needed                                      the potential to enhance or transform preparedness
assistance over the course of 2017, with the number                                   and response activities and improve the delivery of
of displaced people exceeding 65 million and                                          dignified aid.
growing every day.

      Humanitarian payment digitisation in Northern Uganda
      Uganda is the largest recipient of fleeing migrants in Africa, with daily new arrivals of refugees
      averaging nearly 3,000 in March 2017. In less than a year, the refugee population in Uganda doubled
      to more than 1.3 million, largely as a result of the deteriorating situation in South Sudan. The Bidi Bidi
      refugee settlement in Yumbe is now the largest refugee settlement in the world, hosting more than
      280,000 refugees.
      In Northern Uganda, the mobile industry and humanitarian sector have collaborated to deliver
      humanitarian assistance to refugees via mobile money. Such partnerships are a first for mobile
      operators in Uganda who are rapidly developing their mobile money services to meet the needs
      of their humanitarian partners, allowing NGOs to deliver humanitarian cash transfers to refugees.
      Leveraging mobile money for such transfers can reduce logistical costs, give refugees greater dignity
      and choice, and offer the potential for financial inclusion.

5. https://www.gsma.com/mobilefordevelopment/programmes/disaster-response/innovation-fund

                                                                                                    Mobile contributing to economic growth and
                                                                                                                    addressing social challenges   37
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