4G is forecast to account for 60 per cent of Europe’s mobile connections by 2020, up from 20 per cent today, thanks to operator investment in network quality and coverage.
The mobile industry’s contribution to European GDP will hit €600 billion by 2020, the GSMA report added.
Alex Sinclair, acting director general and CTO at the GSMA, said “mobile subscribers in Europe are now benefiting from download speeds that far exceed the global average” and expects “investments in 4G deployments, capacity and spectrum to be sustained for the remainder of the decade” despite challenging macroeconomic and regulatory conditions.
What’s more, 4G network coverage passed 80 per cent of the European population in early 2015 and is forecast to be more than 95 per cent by the end of the decade (click image to enlarge).
The improved coverage, a greater number of available devices at a broader range of price points, and increasing use of music and video streaming services are some of the factors driving increased adoption of 4G devices, the report observed.
Although the use of third-party video sharing apps has continued to grow, operators are increasingly bundling video and audio streaming apps with their tariff offers, usually focused on 4G data and LTE capable devices, it added.
Vodafone is among operators including offers such as Netflix and Spotify Premium at no extra charge to encourage data consumption.
Migration to 4G networks has not just 4G coverage to thank but rising smartphone adoption as well. Smartphones are forecast to account for 76 per cent of Europe’s mobile connections by 2020, up from 60 per cent this year.
4G is also encouraging greater mobile data usage. According to Cisco, the average monthly data usage for Western Europe is set to grow from less than 1GB per month in 2014 to nearly 6GB in 2019.
Many European operators are reporting that 4G customers are using more than double the amount of data as 3G users. The report says revenue from mobile data services is helping operators return to service revenue growth after periods of negative growth.
Economy and connections
The study forecasts that the industry’s contribution to European GDP will increase from €500 billion in 2014 to €600 billion by 2020, as markets across the region benefit from improvements in productivity and efficiency thanks to the adoption of new mobile technologies.
Operators contribute to public funding via taxes and the payment of spectrum fees. In 2014, for example, the allocation of spectrum licences in countries such as Greece, Hungary and Estonia generated approximately €700 million in total for their respective governments.
Meanwhile, there are set to be 430 million unique mobile subscribers in Europe by the end of 2015, representing 79 per cent of the region’s population.
This makes Europe the most highly penetrated mobile region in the world, nearly ten percentage points higher than North America (click image to enlarge).
The report goes on to claim that the mobile industry is leading European digital innovation, particularly in areas such as mobile commerce, smart manufacturing, smart homes and smart health.
Mobile networks are providing the platform for the Internet of Things opportunity: the number of cellular M2M connections in Europe is forecast to grow from 68 million this year to 182 million by 2020.
There is also growing interest in the use of low-power, wide-area (LPWA) solutions, which will play an important role in connecting a range of IoT devices.
The innovation arms of operators Telefónica, Orange and Deutsche Telekom have announced plans to develop a mutual support network for each company’s startup ventures.
What’s more, four of the global top five mobile app-based gaming companies are European and app revenues are typically higher in Europe than in other regions, with over half of app developers making more than $500 per month.
Despite that, Europe is still trailing when it comes to seeing promising start-ups scale and gain prominence at a global level, the study warned.
As for mobile commerce, at the end of the first quarter of 2015, mobile accounted on average for around a third of total e-commerce transactions, with further growth expected over the rest of the year.
However, this is below the level in some of the more developed markets in Asia, such as South Korea and Japan, where over half of e-commerce transactions are on mobile devices.
A key challenge for Europe’s mobile industry is its ability to scale across a continent that has many different national regulatory and legal environments, the report states.
The EU’s proposal to create a European digital single market aims to reduce such barriers to innovation and use digital services and networks to drive future economic growth.
In October, the European Parliament backed the EU telecoms reform package, including key measures that would see an end to roaming charges and guarantee net neutrality
The GSMA’s Alex Sinclair believes transforming Europe into a world-leading digital economy will require “an extensive regulatory overhaul that encourages investment in future-proof infrastructure and addresses the current fragmented approach in areas such as spectrum.”