An additional one billion people will become mobile subscribers over the next five years, according to a major new GSMA (Groupe Speciale Mobile Association) report published at Mobile World Congress today. The new report, ‘The Mobile Economy: 2015’, forecasts that the number of unique mobile subscribers will increase from 3.6 billion at the end of 2014 to 4.6 billion by 2020, increasing by four per cent per year (CAGR) over this period. By 2020, almost 60 per cent of the global population will subscribe to mobile services, up from half of the population at the end of 2014.
The study also highlights a rapid migration to 3G/4G mobile broadband networks and rising smartphone adoption, which is fuelling growth in new mobile data services and applications. As the mobile ecosystem continues to expand in reach and size, the mobile industry is forecast to make an increasing contribution to global GDP, public funding and employment, as well as improving the lives of billions of citizens around the world.
“A decade ago, just one in five of the global population was a mobile subscriber – we have now surpassed the 50 per cent milestone and can look forward to connecting a billion new subscribers over the next five years,” commented Anne Bouverot, Director General of the GSMA. “Mobile sits at the heart of a new ecosystem that is uniting the digital and physical worlds, and powering economic growth. At the same time, mobile operators continue to deploy networks to all corners of the globe, connecting unconnected citizens and addressing socio-economic challenges in areas such as digital and financial inclusion, healthcare and education.”
Mobile penetration varies widely by global region. In Europe, nearly 80 per cent of the population were mobile subscribers at the end of 2014, while in Sub-Saharan Africa the figure is only 39 per cent. Global subscriber growth over the next five years will therefore be concentrated in the developing world, driven by the increasing affordability of mobile devices and services and rapidly expanding mobile coverage that serves to connect currently unconnected populations, especially those in rural areas.
The number of global SIM connections2 (excluding M2M connections) is forecast to grow from 7.1 billion in 2014 to 9 billion by 2020. This implies that every unique mobile subscriber will continue to account for roughly 1.8 SIM cards each, on average, during this period. Cellular M2M connections are forecast to reach 1 billion by 2020, bringing the total number of mobile connections to 10 billion by this point.
Rapid Migration to Mobile Broadband and Smartphones
The period out to 2020 will see a rapid migration to mobile broadband technology as 3G/4G network availability and affordability increases. Mobile broadband accounted for 40 per cent of SIM connections in 2014, but will increase to almost 70 per cent of the total by 2020 as subscribers migrate away from 2G networks and devices. As well as expanding 3G/4G coverage reach, this trend is being driven by the rising number of smartphone connections3. Smartphones accounted for 37 per cent of SIM connections in 2014, a figure forecast to rise to 65 per cent by 2020.
The smartphone adoption rate is already at 60 per cent in the developed world, ranging from 51 per cent of SIM connections in Europe to 70 per cent in North America. The developing world will lead smartphone growth over the next five years as the average selling price of smartphones continues to decline, adding a further 2.9 billion smartphone connections by 2020.
Supporting Growth with Investment
The increasing use of mobile broadband-enabled smartphones is fuelling an explosion in mobile data traffic. According to Cisco4, global mobile data volumes are forecast to grow at a CAGR of 57 per cent through to 2019, reaching 24,314 petabytes per month by that point, a result of rising on-demand video consumption via mobile devices.
Mobile operators are making significant investments in next-generation mobile networks to meet capacity demands and expand coverage reach. In 2014, mobile operators invested around US$216 billion in capital expenditure (Capex), a nine per cent year-on-year increase. Investment levels are forecast to reach a cumulative US$1.4 trillion in the six years from 2015 through to 2020.
A Growing Contributor to The Global Economy
The mobile industry is a cornerstone of the global economy. In 2014, the mobile industry contributed US$3 trillion to the world’s economy, equivalent to 3.8 per cent of global Gross Domestic Product (GDP)5. By 2020, it is estimated that the contribution from the industry will increase to US$3.9 trillion, representing 4.2 per cent of projected global GDP by this point.
The mobile industry directly employed 12.8 million people globally in 2014 and indirectly supported a further 11.8 million jobs, bringing the total to 24.6 million. By 2020, this figure is forecast to reach 28.7 million, with 15.3 million men and women directly employed by the industry. Even without factoring in spectrum fees – which generated more than US$14 billion in revenue for governments worldwide last year – it is estimated that the mobile industry contributed US$411 billion to public finances in 2014 via taxation and social security contributions. This public funding contribution is forecast to rise to US$465 billion by 2020.
“Operators require a supportive regulatory framework in order to deliver this new digital ecosystem being built on mobile broadband networks, smartphones and other connected devices,” added Bouverot. “Our new report published today includes a number of steps that policymakers can take to stimulate investment, competition and innovation in the mobile-powered digital economy, including reducing constraints on market-driven restructuring; ensuring operators have access to sufficient spectrum; and supporting operator efforts to expand mobile network coverage into rural areas in a sustainable way.”