How Europe's Mobile Operators Keep Pace with Asia Telecoms

How does the European mobile industry compare to its APAC counterpart?

In an increasingly digital world, mobile connectivity and the state of its infrastructure have a significant impact on an individual’s productivity as well as a country’s ability to compete at a global level. The mobile industry and its wider ecosystem are an important part of the economies of both Europe and Asia. In 2012, the mobile ecosystem created around 2.2% of Europe’s GDP, compared to 1.6% for the Asia Pacific region.

However, while Europe has traditionally been a leader in both connectivity and network infrastructure, Asia is quickly catching up and in some cases, surpassing Europe

The numbers go some way to explaining why. Europe’s mobile penetration rates may be among the highest in the world, both in terms of unique subscribers (79%) and smartphones (49%). But the real growth is to be found in Asia Pacific, which leads the world in new mobile subscriptions.

Furthermore, given the sheer quantity of data traffic already being consumed by mobile phones, tablets and mobile connected devices, it is the quality of the mobile broadband networks that will determine whether the industry can remain competitive in future.

In the emerging Asia Pacific economies, mobile users are predominantly connected through 2G mobile services. However, the switch to mobile broadband offered by 3G and 4G networks is well underway and mobile connections are expected to grow by around 17% between 2005 and 2020.

Compared to other developed markets, Europe is starting to lag behind. According to GSMA Intelligence, in the first quarter of 2014, only 58% of total mobile connections in the EU were mobile broadband while it was almost double that in South Korea at 99%. It is no coincidence that Sweden, an early adopter of 4G technology, is one of just a handful of European countries where mobile network operators saw profit growth in 2012.

European Commission Vice President Neelie Kroes is aware of the competitive disadvantage this lack of quality broadband creates for Europe. Only recently she pointed out that “mobile traffic is predicted to grow at over 60% per year and our networks are straining.” She’s right of course, but operators can only invest in better mobile broadband infrastructure with the support of a stable and favourable policy framework.

The challenge for Europe both now and over the long term will be to refocus its policies towards making it easier for mobile network operators to achieve the same economies of scale offered by a single telecoms market. At present, the two largest US mobile network operators are each larger than the three largest European combined. It is hard to see how Europe can compete against this kind of efficiency.

Enabling European mobile network operators to consolidate more easily will help cut operating costs and, in doing so, help companies fund investment in network upgrades and deliver new and better services for consumers. We also need to see clear and concerted action to increase the availability of the ‘right kind’ of spectrum for mobile broadband, as well as other measures to promote effective network management and consumer protection.

These short-term measures will require European policymakers to take a more dynamic approach to competition policy. A European single market for telecoms must first and foremost serve the needs of consumers and businesses. But it should not come at the cost of the investments needed to enhance growth, productivity and consumer welfare in the future.



GSMA Mobile Economy Europe 2013:

GSMA Mobile Economy Asia Pacific 2013:


Tom Phillips is Chief Regulatory Officer of the GSMA, which represents the interests of mobile operators worldwide