Mobile Communications

Research: 4G Delivers the American Dream

In the early 2000s, Europe was home to most of the world’s fastest mobile networks and leading mobile phone manufacturers. European operators were investing billions building-out state-of-the-art 3G networks at a time when their North American counterparts were still wrestling with which network technology to use. The most talked-about mobile devices of the day were being designed by Nokia in Finland rather than by Apple in California.

The picture looks very different today; North America is now a global leader in 4G networks and services, ranking alongside the super-advanced markets of Asia such as Japan and South Korea. The first commercial 4G-LTE networks were launched in the US in 2010, making the country one of the first in the world to take advantage of the new technology. 

The GSMA’s first comprehensive study of the market, “The Mobile Economy North America 2014”, has tracked how this early investment in 4G has transformed the region’s mobile landscape. By the end of 2013, the US had 85 million 4G mobile connections, making it the world’s single largest 4G market – larger than Japan (43.9 million) and South Korea (29.4 million) combined. The other major North American market, Canada, was the ninth-largest market with 2.7 million 4G connections.

4G accounted for approximately one in four of the total mobile connections in North America at the end of in 2013, the highest proportion of any global region. Close to 97% of the population lived within 4G network coverage range by year-end, also one of the highest levels globally. Build-out of 4G networks has occurred at a more rapid rate than the earlier move to 3G. Whilst it took around four years for 3G coverage to reach 95% of the North American population, it took 4G just two and a half years to accomplish the same.

A number of important factors have underpinned this rapid technology migration. Availability of suitable spectrum has been key. In the US, operators benefited from the early allocation of the Digital Dividend spectrum in 2008 (in this case the 700MHz band), which enabled local operators to achieve the near-nationwide 4G coverage seen today. Another driver has been the widespread availability of attractive 4G devices. According to the report, almost 90% of devices offered by Verizon Wireless today, for example, are 4G-enabled.

The proliferation of 4G networks and devices is contributing to an uptick in overall usage volumes. Mobile users in the region are using significantly higher volumes of mobile services compared to users in other developed markets, both in terms of traditional mobile services (voice/SMS) and mobile data services. On a per connection basis, time spent on voice calls is five times higher than in Europe, while over twice as many SMS are sent. Data from Cisco indicates that North America in 2013 accounted for over a quarter of global mobile data volumes, despite the region having just over 5% of total mobile connections.

Operators have been able to monetise mobile data growth by introducing pioneering concepts such as shared data plans that allow consumers to use a single data tariff (and the associated data usage) across a number of devices. This, in turn, has contributed to healthy operator revenue growth over recent years. In the period between 2008 and 2013, mobile revenue in North America grew by 4.7% a year (CAGR), according to our report. This was above the global average of 4.5%, and well ahead of Europe, where revenue declined by 3% per year over the period.

An important difference between the North American and European markets has been the regulatory situation. As discussed earlier, the early release of Digital Dividend spectrum in the US helped kick-start the 4G rollout, but North American regulators have also eased pressure on the industry by allowing market consolidation. The FCC, for example, approved last year’s T-Mobile/Metro PCS acquisition partly on the grounds that it would “enable the deployment of a substantial LTE network nationally”. This approach has been in contrast to Europe, where regulators have been wary of such deals due to anti-trust concerns.

Although subscriber growth is slowing, the future looks bright for the mobile industry in North America. The broader mobile ecosystem in the region is home to a number of global players that are shaping innovation around the world, while local operators are pioneering new services in areas such as digital commerce, automotive, home automation and mobile health. 


Michael O’Hara, Chief Marketing Officer, GSMA



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