Mobile industry adds $3.1tr to global economy

Umar Danbatta, NCC Boss.

Umar Danbatta, NCC Boss.

Activities from the mobile industry showed that it contributed about $3.1 trillion in economic value to the global economy in 2015, which is equivalent to 4.2 per cent of the Gross Domestic Product (GDP).

In ‘The Mobile Economy: 2016’ report authored by the Global System for Mobile Telecommunications Association (GSMA) obtained by The Guardian, the figure is predicted to rise to $3.7 trillion by 2020.

The industry was said to have directly and indirectly supported 32 million jobs in 2015 (forecast to rise to 36 million in 2020) and contributed $430 billion to public funding in the form of various types of taxation, a figure expected to grow to $480 billion in 2020 based on current levels of taxation.

This public funding contribution, according to GSMA excluded fees paid by operators for spectrum licences, which generated more than $90 billion for governments around the world last year as operators continued to acquire the spectrum they require to deploy mobile broadband.

Indeed, at a recent forum in Lagos, the Executive Vice-Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, disclosed that while the Nigeria’s telecoms sector’s investments since the revolution began is in excess of $32 billion, it has equally contributed over N500 billion to government coffers from earnings majorly from spectrum administration. He equally disclosed that the sector has created directly and indirectly over two million jobs.

Danbatta stressed that the commission boosted the Federation Account by N70 billion in the last six months.

Meanwhile, the 2016 Mobile Economy report noted that the widespread availability of mobile networks is accelerating the ability to achieve the United Nations (UN) Sustainable Development Goals.

According to it, from improving access to vital services such as education, healthcare and financial services, to delivering smart agriculture and electricity management solutions, building resilient infrastructures or closing the gender gap, mobile technology is central in addressing a range of socio-economic development challenges.

However, the report also notes the need for regulation to keep pace with rapid innovation.

Commenting, the Director General of GSMA, Mats Granryd, said the fast pace of change means regulation can quickly become obsolete, irrelevant or, in some cases, harmful – distorting competition, slowing innovation and ultimately depriving consumers of the benefits of technological progress.

“Recognising these challenges, the mobile industry is calling on policymakers worldwide to adapt out-dated market regulations to reflect the new digital ecosystem”, he stated.

The report claimed that 4G accounted for one billion of the 7.3 billion mobile connections reached by the end of 2015. The number of 4G connections doubled in 2015, largely as a result of the increase in 4G network deployments in the developing world, including Nigeria.

At the end of the year there were 451 live 4G (LTE) networks available in 151 countries, with almost half of these in the developing world.

Besides, GSMA observed that the combination of increasing mobile broadband access and rising smartphone adoption is contributing to an explosion in mobile data usage. Smartphones accounted for 45 per cent of mobile connections in 2015 (up from just eight per cent in 2010) and a further 2.6-billion smartphone connections are expected to be added over the next five years. Mobile data volumes are forecast to grow at a CAGR of 49 per cent over the next five years – a more than seven-fold increase – approaching 40 exabytes per month by 20202. This will be equivalent to a global average of 7 gigabytes per subscriber per month.

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