Despite the maturity of its U.S. and Canadian segments, the North American mobile industry is expected to grow to contribute nearly $1 trillion each year to the region’s economy by 2020, a new report from GSMA said.
According to the report, mobile technologies and services accounted for approximately 3.6 percent – or around $710 billion – of North America’s gross domestic product (GDP) in 2015. The industry also supported around 2.3 million jobs last year, including employees directly employed by operators and ecosystem partners as well as those employed to indirectly support the activity generated by the mobile economy. Further, the mobile sector contributed around $82 billion in taxes in 2015 as well as an additional $46 billion in revenues to the government from various spectrum auctions, the report said.
And these figures are expected to continue to grow.
GSMA forecast subscriber penetration in the U.S. mobile market will grow 2 percent annually through 2020 while the less-mature Canadian market will grow at an annual rate of 3.1 percent. Though penetration stood at 79 percent in 2015, GSMA said that figure is expected to hit 84.5 percent in 2020. The total number of unique subscribers is also expected to grow from 284 million in 2015 to 315 million by 2020, the report said.
By the start of the next decade, GSMA said, the combined North American mobile industry will contribute almost $1 trillion or 4.5 percent of GDP to the region’s economy thanks to the adoption of machine-to-machine technology and digitized services. Cellular M2M connections totaling 60 million in 2015 are expected to explode to hit 175 million by 2020, the report said.
For all its maturity, though, GSMA said the North American Market still has some catching up to do.
The report noted mobile data traffic among North American customers is expected to hit nearly 9 GB per month by 2020, up from a global average of 5 GB per month. However, average network speeds in the United States (20.1 mbps download) and Canada (25.9 mbps download) lagged behind network speeds in South Korea (38.5 mbps), China (32.1 mbps) and Sweden (26.5 mbps).
In order to achieve greater capacity and faster speeds, the report said more investment is needed. But it looks like the region may have that covered.
Total operator capex in the region is forecast at nearly $170 billion over the five year period to 2020, marking the highest level of investment expected in any region outside the Asia Pacific market.