Americans Benefit from Mobiles more than Europeans

Comments

The wireless industry has become a strong driver of the USA’s economy, comparable to the US automobile industry, according to Ovum the analyst and consulting firm. In a study commissioned by CTIA-The Wireless Association in the US, Ovum found that 3.6 million jobs were directly and indirectly dependent on the US wireless telecommunications industry in 2004. In that same year, the wireless industry generated US$118 billion in revenues and contributed US$92 billion to the US Gross Domestic Product (GDP), which is comparable to the US automobile industry.

Carried out in collaboration with Indepen, a London-based think-tank, the study has important repercussions for Europe.


“Most people think of the US as behind Europe in the area of mobile services,” says David Lewin of Indepen. “But this study shows that Americans extract far more economic and social value from mobiles services than Europeans.

Roger Entner, VP Telecoms at Ovum and co-author of the report explains: “The use of wireless telecommunications services in the US generated a consumer surplus of $157 billion per annum in 2004,” said Entner. “Were US carriers to charge at European Union levels, we estimate that it would be halved, demonstrating that US consumers and businesses enjoy substantially greater economical welfare from wireless services than their EU counterparts do.”

For example, if the average wireless consumer in America spends US$54 per month on wireless voice and data services, that same consumer would pay approximately US$125 for the same services in the European Union.

The research found that overall the use of mobile services for voice is 3 times higher in the US and 10 times as many had access to high speed data services at the end of 2004.

Ovum predicts that over the next 10 years, the wireless telecom industry will create an additional 2-3 million new jobs, adding a cumulative additional US$450 billion in GDP. This figure is based on the conservative assumption that no services are added beyond what are available today.