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TheMobileEconomy Europe2015

THEMOBILEECONOMYEUROPE2015

TheGSMAepesentstheinteestsofmobileopeatos woldwide,unitingnealy800opeatoswithmoe than250companiesintheboademobileecosystem, includinghandsetanddevicemakes,softwae companies,equipmentpovidesandintenetcompanies, aswellasoganisationsinadjacentindustysectos.The GSMAalsopoducesindustyleadingeventssuchas MobileWoldCongess,MobileWoldCongessShanghai andtheMobile360Seiesconfeences.  Fomoeinfomation,pleasevisittheGSMAcopoate websiteatwww.gsma.com FollowtheGSMAonTwitte:@GSMA

ThisepotisauthoedbyGSMAIntelligence,thedenitive souceofglobalmobileopeatodata,analysisand foecasts;andapublisheofauthoitativeindustyepots andeseach.Oudatacoveseveyopeatogoup, netwokandMVNOineveycountywoldwide–fom AfghanistantoZimbabwe.Itisthemostaccuateand completesetofindustymeticsavailable,compisingtens ofmillionsofindividualdatapoints,updateddaily.GSMA Intelligenceiseliedonbyleadingopeatos,vendos, egulatos,nancialinstitutionsandthidpatyindusty playes,tosuppotstategicdecisionmakingandlong teminvestmentplanning.Thedataisusedasanindusty efeencepointandisfequentlycitedbythemediaand bytheindustyitself.Outeamofanalystsandexpets poduceegulathoughtleadingeseachepotsacoss aangeofindustytopics. www.gsmaintelligence.com|info@gsmaintelligence.com FollowGSMAIntelligenceonTwitte:@GSMAi

THEMOBILEECONOMYEUROPE2015

Contents 1

exeCutivesummary

industryoverview

1.1

Europeisthemostpenetratedregion,withlimitedroomforsubscribergrowth

1.2

4Gadoptioncontinuesapaceascoveragehasimproved

1.3

Spectrumneededtosupportdatatracgrowthandgeographiccoveragerequirements

1.4

Smartphoneadoptionwillcontinuetogrow,albeitmoreslowly

1.5

Datagrowthenablingrevenuerecovery

1.6

Driversofdatagrowth:videoandaudiostreamingsupportedbygoodspeeds

1.7

Movetotiereddataplanscontinues,helpingosetlossesofvoiceandSMSrevenuesto internetplayers

1.8

Rateofgrowthindatamayhavepeaked

1.9

OutlookforpendingmobileM&Adealsnowlesscertain,drivingmovetoconvergence

1.10 Financialoutlook:morestablerevenuesandcashowbutlittlegrowth

1.11

Sectorsharepriceperformancelikelytoimprovealongwithrecoveryinnancial performance

mobiledrivinggrowthandinnovationineurope

2.1

Mobileindustry’scontributiontoeconomicgrowth

2.2

MobiledeliveringinnovationandadigitalEurope

2.3

FuturenetworksinEurope

2.4 GSMAactivitiestosupportthedevelopingmobileecosystem

deliveringthedigitalsinglemarket

THEMOBILEECONOMYEUROPE2015

ExecutiveSummary Europehasthehighestregionalrateofuniquesubscriber penetration,atjustunder80%,whichisnearly10percentage pointsabovebothNorthAmericaandtheCommonwealthof IndependentStates(CIS).Withthislevelofmaturity,scope forfurthersubscribergrowthislimited.Uniquesubscribers inEuropewillreach450millionbytheendof2020,withthe penetrationratereaching81%.

4GLTEcoverageandadoptionhavecontinuedto expandrapidlyacrosstheregion.TheproportionofLTE connectionsinEuropeissettoalmosttriplefrom20% asofthethirdquarterof2015,toalmost60%oftotal connectionsby2020.Averagedownloadspeedsin Europeexceedtheglobalaveragebysomemarginand inmanycountriesareaheadofspeedsinbothJapan andtheUS. Operatorinvestmentsin4Gnetworkqualityand coverage,andgrowthinsmartphoneadoption, continuetodrivedatausage.Averagemonthlydata usageinWesternEuropeissettogrowfromlessthan1 GBpermonthin2014tonearly6GBin2019,aCAGRof 45%.Therearenowsignsthatthegrowthratefordata usageacrosstheregionmayhavepeaked;theoutlook isoneofstrongbutslowingtracgrowth. Dataishelpingrecurring(service)revenuesreturn togrowthattheregionallevelforthersttimethis decade,withgrowthforecastfrom2017atanannual rateofaround1%to2020.Marginshavebeenaected bycompetitionandregulation,buthavestabilised inthersthalfof2015.Investmentin4Gnetworks, spectrumauctionsandnetworkcapacityexpansion haveraisedthelevelofcapexfromlessthan15%of

|ExecutiveSummary

revenuesatthebeginningofthedecadetoaround 20%inrecentyears.Althoughtherearesignsofa stabilisation,cashowmarginsremainwellbelowtheir historicalaverages.Thismayraisequestionsoverthe industry’sabilitytonancethenextwaveofinvestment around5G. In2014,mobiletechnologiesandservicesgenerated 3%ofGDPinEurope,acontributionthatamountedto around€500billionofeconomicvalue.Intheperiod to2020weexpectthistoincreasetoalmost€600 billion,ascountriesbenetfromtheimprovements inproductivityandeciencybroughtaboutbythe adoptionofnewmobiletechnologiesandmachineto machine(M2M)applicationsandservices. Themobileecosystemalsosupported3.8millionjobs in2014.Thisincludesworkersdirectlyemployedinthe ecosystemandjobsthatareindirectlysupportedby economicactivitygeneratedbythesector.Inaddition tothemobilesector’simpactontheeconomyand labourmarket,itmakesasubstantialcontribution tothefundingofthepublicsector,withapproximately €84billionraisedintheformofgeneraltaxation in2014.

THEMOBILEECONOMYEUROPE2015

Europecontinuestoseeinnovationacrossallareas ofthemobileecosystem,withagrowingnumberof playersandinnovativenewappsandservicesaecting allareasofdailylife.Operatorsarehelpingtodrive innovationacrosstheecosystemthrougharangeof investmentsandpartnerships.Aparticularareaof successisgaming:fouroftheglobaltopvemobile appgamingcompaniesareEuropean.

inAsiasuchasChinaandIndia.Thischallengeis compoundedbythedierentnationalregulatory andlegalenvironments,withanoverallregulatory environmentthatisoftennotsupportiveofinnovations andthelaunchofnewdigitalproductsandservices.To reducebarrierstoinnovationandfostergrowthinthe entrepreneurialcommunityacrosstheregion,theEU hasdevelopeditsDigitalSingleMarketstrategy.

Mobilecommerceisgrowingstronglyacrossthe region,andtheGSMA’sMobileConnectiswell placedtoaddressthedemandforstraightforward andsecureauthenticationandidentication.Mobile Connecthasbeenspecicallydesignedtocomply withtheEuropeanUnion’sElectronicIdentication, AuthenticationandTrustServices(eIDAS)regulation, whichiscurrentlybeingimplementedacrossthe memberstates.

RealisingagenuineDigitalSingleMarketwillrequire increasedinvestmentandinnovation,rstandforemost indigitalnetworks.EuropeanCommissionPresident JeanClaudeJunckerhasprioritisedtheDigital SingleMarketasarguablythesinglebiggestfactorin determiningEuropeangrowthoverthecomingyears. Investinginmobilenetworksandmeetingthegoalof digitalisingeverythingiskeytorealisingitspotential. However,deliveringtheDigitalSingleMarketisabout farmorethanjustconnectivity.Thestrategyrecognises theneedtoremoveonlinebarriersforbusinessesand consumers,creatinganenvironmentofinnovation arounddigitalservicesandnetworks.Itenvisages anextensiveoverhaulofrules,policiesandinitiatives acrosstheboard.

TheInternetofThings(IoT)canplayasignicant roleinrealisingthepotentialofthedigitalfuturein Europe,withpositiveimpactsonboththeeconomy andbroadersociety.TheEuropeanCommissionis supportiveofthepotentialforIoTtoimprovethelives ofcitizensacrosstheEU.Arecentstudysupported bytheCommissionestimatedthatthenumberofIoT connectionsacrosstheEU28couldreach6billionby 2020,bywhichtimetotalrevenuescouldtotal€1.2 trillion(includinghardware,softwareandservices). DespitethegrowthoftheEuropeanmobileecosystem, theworld’slargesttechcompaniestodayaremainly USbased.Aswellasthemoreestablishedinternet companiessuchasGoogleandFacebook,theUS markethasrecentlyseenanumberofnewapps andservicesscalerapidly,bothdomesticallyand internationally,particularlythosebasedonthenew ‘sharingeconomy’,suchasUberandLyft. AkeychallengeforEuropeandevelopersand internetcompaniesisthelackofscaleinnational marketscomparedtotheUSoremergingmarkets

TheEUTelecomsFrameworkReviewthatisunder wayisanexampleofhowrulescanplayapivotal roleindeterminingthedegreeofconnectivity.With anewsetofrulesthatencouragesmobilesectorand nextgenerationbroadbandinvestment,thereisa realopportunitytorealisethepotentialoftheDigital SingleMarket.Sincethelastreview,therehasbeen widespreadinnovationacrossthemobileecosystem, withnewplayers,servicesandbusinessmodels fundamentallyalteringhowpeoplecommunicateand interactinthedigitalworld. Somuchhaschangedandyetsomuchisexpected oftheDigitalSingleMarketthattheindustryneeds acompleterethinkoftelecomsregulationinEurope. TheTelecomsFrameworkReviewcurrentlyunderway meanstherethinkopportunityisnowornever.

ExecutiveSummary|

MOBILE ECONOMY EUROPE Uniq ue sub scrib ers and SIM co nnect io ns 2 1

8. % E E

EC I

2 1

2 2

68 m

12 . % E E

81. % E E

*Excluding M2M

2 2

% o co nnect io ns

. % E E

o p ulat ion co era e 2 1

86 .1%

2 2

56.9%

2 1

21.9%

2 2

92.6%

Mo b ile d at a

2 1

p er user p er m o nt

2 19

p er user p er m o nt ( Source: Cisco)

2 1 19

C A G R

Eco syst em co nt rib ut io n t o

M2M connect ions

2 1

€

2 1

.2% 2 1

68m

2 1 2

22%

2 2

C A G R

EC C

MIC I U I

182m

€600bn

Mo b ile o p erat o r re enues

Em p loy m ent

2 2

2.3mJOBS

2 1

at a

ro t

€1

d ri in

re enue reco ery

2 1

€155bn 2 2

lus an ad d it io nal

1.5 m IN D IR E C T

J O B S

THEMOBILEECONOMYEUROPE2015

Industryoverview

| Ind ustry overview

THEMOBILEECONOMYEUROPE2015

1.1 Europeisthemostpenetratedregion,with limitedroomforsubscribergrowth Basedonuniquesubscribers,Europeisthemost penetratedregionglobally,withanearsaturation levelof78%currently,nearly10percentagepoints abovebothNorthAmericaandtheCIS.Intermsof

connectionspenetration,theCISexceedsEurope. LatinAmericaandMENAalsoshowhighconnections penetration,inallcasesduetogreateruseof multipleSIMs.

Source:GSMAIntelligence,Q32015data

Populationpenetrationrates SubSaharanAfrica

AsiaPacic

MiddleEastandNorthAfrica

World

LatinAmerica

NorthernAmerica

CommonwealthofIndependentStates

Europe

Connection penetrationrate

76% 42% 93% 46% 105%

50%

98% 51% 112% 52% 102% 70% 147% 70% 78%

124%

Uniquesubscriber penetrationrate

Industry overview |

THEMOBILEECONOMYEUROPE2015

Withthislevelofmaturity,thereislimitedscope forfuturesubscribergrowthinEurope.Theunique subscriberbasewillreach450millionbytheendof 2020,growthoflessthan5%fromthecurrentlevel.

Thepenetrationratewillreach81%bytheendofthe decade.Growthintotalconnections(excludingM2M)is morerobustatjustover9%throughto2020.

Source:GSMAIntelligence

TotaluniquesubscribersinEurope (Million)

81%

411

416

421

424

428

430

435

439

443

447

450

75% 2010

2011

2012

2013

2014

Uniquesubscriber penetration

| Ind ustry overview

2015

2016

2017

Unique subscribers

2018

2019

2020

THEMOBILEECONOMYEUROPE2015

1.2 4Gadoptioncontinuesapaceascoverage hasimproved 4Gnetworkcoveragepassed80%oftheEuropean populationinearly2015andwillexceed90%inearly 2016,growingfurthertoreach93%bytheendofthe decade.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.

Source:GSMAIntelligence

4GadoptioninEurope

600

93%

500

Million

400 57%

300

200

100

2010

2011

4Gpopulation covered

2012

2013

2014

4G connections

LTEconnectionsasaproportionoftotalconnections inEuropearesettoalmosttriplefrom20%asofthe thirdquarterof2015,tocloseto60%by2020.Thiswill leaveEuropetrailingNorthAmerica(wherefourout

2015

2016

2017

4Gpopulation coverage

2018

2019

2020

4G adoption

ofveconnectionsaresettobeLTEby2020),butwill positionEuropeinsecondplacegloballyintermsof LTEadoption.

Industry overview |

THEMOBILEECONOMYEUROPE2015

1.3 Spectrumneededtosupportdata tracgrowthandgeographiccoverage requirements Akeyfactorbehindincreasingcoverageandadoption of4Gisspectrumallocation.Overthepastseveral years,mostEuropeancountrieshaveauctionedthe 800MHz‘digitaldividend’spectrum,whichhadbeen freedupbytheswitchoverfromanaloguetodigital broadcasting.OftheEU28,24havealreadyauctioned andallocatedthesefrequencies;Poland,oneofthefour outstanding,hasrecentlycompleteditsmultiband auctionincluding800MHzspectrum. Morespectrumisrequiredtomeetfutureneedsas datatraccontinuestogrow,andinEuropesome

| Ind ustry overview

countrieshavetakenthelead.Inparticular,Germany wasthersttoauctiontheseconddigitaldividend includingtheLbandinanauctionearlierin2015,which alongwiththe900MHzandthe1800MHzraisedmore than€5billion.Franceisalsosettoauctionthe700 MHzspectrumbeforetheendof2015,whileSweden andFinlandplandoitby2017and2016respectively. Allocatingadditionalfrequenciesandinparticular theseconddigitaldividendisacrucialsteptowards achievingtheDigitalAgendaobjectivesandconnecting Europeancitizensthroughoutthecontinent.

THEMOBILEECONOMYEUROPE2015

1.4 Smartphoneadoptionwillcontinuetogrow, albeitmoreslowly Thelevelofsmartphoneadoption,asapercentageof connections,passedthe50%levelin2014andwillend 2015onaround60%,growingmoreslowlythereafter tonishthedecadeon76%.Whilein2014therewere signicantdierencesbetweenthelargercountries (withFranceona72%adoptionlevelcomparedto

Germanyon44%),thelaggardshavebeguntoclose thegap,withGermanynishing2015on60%.Bythe endofthedecade,Francewillstillhavealeadon84% butamuchnarrowerone,withnoneoftheotherve largesteconomiesbelow76%.

Source:GSMAIntelligence

SmartphoneadoptioninEurope

66%

47%

51%

17%

75%

76%

60%

Smartphone adoptionrate

18%

Smartphone connections growth

51% 39% 35%

25%

70%

73%

43% 26% 17%

2 0 10 Thegrowinglevelofsmartphoneadoptionis happeningatthesametimeasoperatorsinEuropeare movingawayfromsubsidisinghandsetsonasbroad ascaleastheyhavedoneinthepast.Thisfollows theexampleofoperatorsinothermaturemarkets suchastheUSandSouthKorea.TheUKpollingrm YouGov,forexample,foundthattheproportionof UKsmartphoneownersonSIMonlyplanshadmore thantripled,from5%to16%,betweenJune2010and

12%

2 0 2 0 June2015.Meanwhile,contractplans(whichusually includeahandsetsubsidy)fellfrom80%to67%over theveyearperiod1.ThemovetobothSIMonlyas wellasequipmentinstalmentplanshasbeencredited withhelpingoperatingmarginsstabiliseafteryears ofpressure.Thelatterarealsocurrentlyhelpingtotal revenuesrecovermorequicklythanservicerevenues, thoughthiseectwillnormaliseovertime.

1. Souce:“SIMonlyonthemachasconsumesholdontohandsetsfolonge”,YouGov,August2015.

Industry overview |

THEMOBILEECONOMYEUROPE2015

1.5 Datagrowthenablingrevenuerecovery Enabledbyincreased4Gcoverageanddevice adoption,datausagecontinuestogrowstronglyacross Europe.TheaveragemonthlydatausageforWestern Europeissettogrowfromlessthan1GBpermonthin

2014tonearly6GBin2019,aCAGRof45%2.Thereisa clearcorrelationbetween4Gadoptionanddatausage acrossmanydevelopedmarkets.

Sources:CiscoMobileVNI2015,GSMAIntelligence

Increasingdatausagedrivenby4Gadoption Datausage(GB)peruserpermonth,4Gadoption(%ofconnections)

13.9 79% 74% 66%

10.8

69%

67%

63%

64%

9.9

53%

44% 40%

5.8 3.6 0.5

0.5

France

Germany

2014usage

2. Souce:CiscoVNIMobileFoecast,2015.

| Ind ustry overview

23% 14%

13%

11%

0.8

Italy

1.3

0.6 Spain

2019usage

28%

4.3

3.4 3.7

2.9

17%

5.7

Sweden

1.8

0.9 Western Europe

20144Gadoption

0.6 North America

Global

20194Gadoption

THEMOBILEECONOMYEUROPE2015

1.6 Driversofdatagrowth:videoandaudio streamingsupportedbygoodspeeds 4Gcoverageandgreateradoptionof4Gcapable devicesareclearlyencouraginggreaterdatausage. Telefónica,forexample,saysthatits4Gcustomers’ usageis60%higherthan3G,whileVodafonehassaid

thatits4GcustomersacrossfourEuropeanmarkets use,onaverage,slightlymorethandoubletheaverage 3Gcustomer(varyingfrom50%moreinGermanyto 1.3xasmuchintheUKand3xasmuchinSpain).

Source:Vodafone

Vodafoneupliftin4Gusagevs3G Averagemonthlyusage(GB)inQ12015

3.7 3G

1.6

1.8

1.5 1.0

Germany

Althoughtheuseofthirdpartyvideosharingappshas continuedtogrow,operatorsareincreasinglybundling videoandaudiostreamingappswiththeirtari oers,usuallyfocusedon4GdataandLTEcapable devices.Vodafoneisamongoperatorsincluding oerssuchasNetixandSpotifyPremiumatno extrachargeinitsmostrecentoers,aclearmethod ofencouragingitscustomerstoincreasetheirdata consumption.Telefónicaaswellhassaiditis“actively bundlingcontenttodrivedatausageup”.Overall, dataconsumptionbyvideoisexpectedtoriseto

0.9

Netherlands

2.2 0.7 Spain

almostthreequartersoftotalusagein2019inWestern Europe,upfrom56%in20143. Enablingdataheavyconsumption,suchasfrom video,arenetworksthatinadditiontooeringbetter coveragearefastenoughtomaketheuserexperience moresatisfying.AveragedownloadspeedsinEurope exceedtheglobalaveragebysomemargin,andmany countriesintheregionareaheadofotherdeveloped marketssuchasJapanandtheUS,accordingto OpenSignaldata4.

3. Souce:Cisco 4. Souce:“TheStateofLTE”,OpenSignal,Septembe2015

Industry overview |

THE MOBILE ECONOMY EUROPE 20 15

Source: Op enSig nal

Europ ean sp eed s com p are favourab ly t o ot her reg ions Averag e LTE dow nload sp eed in Q3 20 15 (Mb p s)

South Korea

Japan

Slovenia

Estonia

Portugal

Sweden

Norway

Germany

Ireland

Czech Rep.

Croatia

Switzerland

Poland

Lithuania

France

Belgium

Italy

Finland

18 18 17 17 17 17 16 16 16 15 14 13 13 13 13 13 14 12 12

Slovakia

Netherlands

20 19

Latvia

Spain

22 21

Austria

Hungary

Denmark

Romania

25 24

1.7 Move to tiered data plans continues, helping internet players The GSMA recently conducted a survey of consumers in 54 countries globally, including many European nations, asking “Do you use OTT messaging services more than traditional text messages?” Within Europe, there was wide variation, from less than 10% answering “more” in Denmark to over 80% in Spain. On average 35% of respondents in Europe used online messaging more

| Ind ustry overview

than SMS – more than twice the level of respondents using it less frequently. By comparison, in the US where prepaid plans are less common, and where tiered and shared data plan adoption is higher, 18% of respondents used online messaging more, which was only slightly higher than the percentage of respondents using online messaging less frequently than SMS.

THEMOBILEECONOMYEUROPE2015

Source:GSMA

UseofonlinemessagingappsinEurope Percentageofrespondentswhouseonlinemessagingmorethantexting

82%

57%

62%

66%

44% 46%

Osettingthis,Europeanoperatorsaremoreeectively monetisingthegrowthindatausagethroughthe useoftiereddataplans.Telefónica,forexample, recentlysaidthat30%ofitsclientsexceedtheirdata bundleallowancesand,ofthese,40%buyatopup orincreasetheirallowance.Overall,theuseofdata

Spain

Netherlands

Italy

Switzerland

Germany

Austria

Europeanaverage

Finland

Romania

Greece

Poland

21% 22%

Portugal

Sweden

Belgium

France

Denmark

14% 15% 16%

27% 28% 29%

33% 35%

beyondallowancesaddedonepercentagepointto organicrevenuegrowthinQ22015.Ciscopublisheda casestudywhichfoundthattieredplanscanincrease thenumberofmobiledatasubscribersbyabout45%, presumablybecausesubscribersdonothaveafearof ‘billshock’,andcanincreaseARPUbyalmost$75.

5. Souce:“UseCase:SpeedTiesDataPlan”,Cisco,2014

Industry overview |

THEMOBILEECONOMYEUROPE2015

1.8 Rateofgrowthindatamayhavepeaked Afterseveralyearsofstronggrowth,therearesigns thatdatagrowth,inpercentageterms,mayhave plateaued,withtherateofgrowthnowslowing.For example,Vodafonereportsaggregatemobiledata usageacrossitsentireEuropeanbase,whichincludes subscribersinGermany,Greece,Italy,theNetherlands, Portugal,Romania,SpainandtheUK.Although Europeandatausagecontinuestogrowatmorethan

60%yearonyear,thisisdownslightlyonthearound 70%growthrateinlate2014/early2015,butstillalmost doubletheannualgrowthin2013.However,are accelerationcannotberuledout;forexample,some operatorsinSouthKoreasustainedgrowthratesabove 100%atonepoint6,andintheUSVerizonrecentlysaid thatitsLTEtracisgrowingata75%annualrate.

Source:Vodafone

VodafoneEuropedatagrowthrobustbutslowing Totaldatausage(thousandsofterabytes)

212.0

131.5

43%

70.9 70.5 58.5 64.3

Q3 2012

Q4 2012

Q1 2013

Q2 2013

95.0 8 7 .4 80.2

Q3 2013

Q4 2013

Q1 2014

VodafoneEuropean datausage

6. GSMAIntelligence,SKTelecomdatagowth133%yeaonyeainQ42013

| Ind ustry overview

145.6

161.5

177.2 61%

107.7

Q2 2014

Q3 2014

Q4 2014

Yearonyear growthrate

Q1 2015

Q2 2015

Q3 2015

THEMOBILEECONOMYEUROPE2015

Afterseveralyearsofstrong growth,therearealsosignsthat datagrowth,inpercentageterms, mayhaveplateaued.

Industry overview |

THEMOBILEECONOMYEUROPE2015

1.9 OutlookforpendingmobileM&Adealsnow lesscertain,drivingmovetoconvergence Inthepastyear,mergersthatwouldhavereducedthe numberofmobileoperators,fromfourtothreeineach case,havebeenannouncedinDenmark,Italyandthe UK.InSeptember2015,themergerbidofTelenorand TeliaSonera’sbusinessesinDenmarkwaswithdrawn astheownersfeltthattheconcessionsrequiredto achieveclearanceofthetransactionwouldhave negatedthebenets.MeanwhiletheEU’sCompetition CommissionerMargretheVestagermadecomments thatraisequestionsaroundthelikelihoodofapproval ofthependingdealsinItalyandtheUK–though shehasalsomadeclearthatapprovalorrejectionof aproposedtransactionisnotamattersolelyofthe absolutenumberoflicensedoperators. FootprintexpandingM&Adealshavebeenapproved muchmorequicklythanmarketconsolidationdeals, whichreducethenumberofplayers,andapprovalhas comewithfewerandlessonerousconditionsattached. ExamplesincludeVodafone’scableacquisitionsin GermanyandSpain,andtheNumericableSFRmerger inFrance.IntheUK,BT’sacquisitionofEEwasrecently

| Ind ustry overview

givenpreliminaryapprovalwithoutanyremedies. However,theapprovaloftheacquisitionbyOrangeof JazztelinSpaincamewithmoresignicantconditions attachedthanexpected,whileTelenet’sproposed purchaseofBaseinBelgiumiscurrentlysubjecttoan indepth(phaseII)reviewbytheCommission.Inthe UK,theCompetitionandMarketsAuthorityiscurrently reviewingThree’sproposedacquisitionofO2.Whileit istoosoontosaywhetherthesependingtransactions willgoaheadandifsoinwhatform,theuncertaintyis likelytoputapauseonfurthersignicantactivityuntil thereisgreaterclarityontheoutcomes. Adoptionofconvergence/quadplaypackages byconsumerscontinuestogainpace,drivenby incumbentslookingtolowerchurnthroughmulti serviceplatforms.Pricingisakeytoolthatnumerous operatorsusetodrivetheuptakeofmultiplayoers. Belgium(27%),France(24%)andSpain(21%)aresome ofthemostdevelopedmarketsinEuropeforquadplay adoptionin2015,accordingtotheGSMAIntelligence SIMsurvey.

THEMOBILEECONOMYEUROPE2015

1.10 Financialoutlook:morestablerevenues andcashowbutlittlegrowth Takingintoaccountthecombinationofaslowly improvingeconomicenvironment,decliningimpact ofmobileterminationratecutsandotherregulatory impositions,increasingadoptionoftiereddataplans andoverallincreaseddatausage,monthlyARPUona peruniquesubscriberbasiswillbottomoutinthenext yeartoaround€24andthengrowslightly.Helpedby

theongoingstronggrowthindatatrac,aswellasa reductioninregulatoryheadwinds,recurring(service) revenuesaresettoreturntogrowth.AtaEuropewide level,revenuesareforecasttoseemodestgrowthfrom 2017butatarateofonlyaround1%peryearthrough to2020.

Source:GSMAIntelligence

Revenuesslowlyreturningtogrowth Mobileoperatorrevenues(€billion)

1.3%

200

0.9%

180 160 140

1.6%

120

2.4%

100 80 60 40 20 0

2010

2011

2012

Recurring revenues

2013

2014

Total revenues

2015

2016

2017

Totalrevenue growth

2018

2019

2020

Recurring revenuegrowth

Industry overview |

THEMOBILEECONOMYEUROPE2015

Belowthetopline,marginshavebeenaectedby competition,regulationandrevenuedeclines.Margins havefallenbyaround9percentagepointsbetween 2009and2014,buttherearetentativesignsofa recoveryinrecentquarters.Theoutlookformargins shouldalsoimprovewiththerecoveryintopline trends,aswellastheimpactofconsolidationdeals inseveralmarketsoverthelastfewyears.Asidefrom thetoplinerecovery,otherfactorspositivelyaecting marginsincludelowerlevelsofhandsetsubsidies andgreateroutsourcingofsitestothirdpartytower companies,whichallowsrelatedcoststobebookedas nancingratherthanoperatingexpenses.

Atthesametime,investmentin4Gnetworks, spectrumauctionsandoverallnetworkcapacity haveraisedthelevelofcapexfromlessthan15%of revenuesatthebeginningofthedecadetoaround 20%inrecentyears.Investmentwillremainhigher thaninearlieryearsbuthasreachedasustainablelevel forthenextseveralyears.Takingtherevenue,margin andcapexoutlooktogether,thenancialoutlookfor thesectorlookshealthierthanithasforanumberof years.However,cashowmarginsremainwellbelow theirhistoricaveragesandmayraisequestionsover theindustry’sabilitytonancethenextwaveof investmentaround5G.

Source:GSMAIntelligence

Cashowlevelsarestabilising (€billion)

23%

20%

11%

2008

2009

2010

EBITDA lesscapex

| Ind ustry overview

2011

2012

2013

Total capex

2014

2015

2016

EBITDAcapex margin

2017

2018

2019

Capex/revenues

2020

THEMOBILEECONOMYEUROPE2015

1.11 Sectorsharepriceperformancelikelyto improvealongwithrecoveryinnancial performance Inthepastveyears,theEuropeantelecomssector, asmeasuredbytheDowJonesStoxxTelecomsIndex, hasfallenbyabout15%,whiletheoverallmarkethas risenbyapproximately35%.Thishasoccurredlargely intandemwithnancialresults,withsectorrecurring (service)revenuesfallingacumulative21%from2010 to2014inclusive,aswellasheavycapitalexpenditure

on4Gnetworkrolloutandoperatingmarginpressure ascostscouldnotbecutasquicklyasrevenueshave fallen.However,withrevenuesforecasttobegin stabilisingintheneartomediumterm,margins recoveringslightlyandcapexasapercentageof revenuesalsohavingpeaked,theoutlookisnowmore optimistic.

Source:Stoxx

Sectorsharepriceperformance 160 150 140 130 120 110 100 90 80 70 60 50 Oct10

Apr11

Oct11

Apr12

Oct12

DowJonesStoxx TelecomsIndex

Apr13

Oct13

Apr14

Oct14

Apr15

Oct15

StoxxEurope 600Index

Industry overview |

THEMOBILEECONOMYEUROPE2015

Mobiledriving growthand innovationin Europe

| Mob ile driving growt h and innovation in Europ e

THEMOBILEECONOMYEUROPE2015

2.1 Mobileindustry’scontributiontoeconomic growth Themobileecosystemconsistsofmobilenetwork operators;infrastructureserviceproviders;retailersand distributorsofmobileproductsandservices;handset manufacturers;andmobilecontent,applicationand serviceproviders.Thedirecteconomiccontribution toGDPofthesermsisestimatedbymeasuringtheir

valueaddedtotheeconomy,includingemployee compensation,businessoperatingsurplusandtaxes. In2014,thetotalvalueaddedgeneratedbythemobile ecosystemwas€154billion(or1%ofGDP),with networkoperatorsaccountingforthemajorityofthis (almost70%).

Source:GSMAIntelligence

DirectGDPcontributionofthemobileecosystem (€billion,%2014GDP)

0.67%

0.18%

3 Infrastructure providers

Network operators

0.05%

0.07%

Handset manufacturers

Distributorsand retailers

28 €BILLION

0.02%

%2014GDP

105

Content,applications andotherservices

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

Inadditiontotheirdirecteconomiccontribution, rmsinthemobileecosystempurchaseinputsfrom theirprovidersinthesupplychain.Forexample, handsetmanufacturerspurchaseinputsfrommicrochip providersandcontentprovidersrequireservicesfrom theITsector.Furthermore,someoftheprotsand earningsgeneratedbytheecosystemarespenton othergoodsandservices,stimulatingeconomic activityinthosesectors.Weestimatethatin2014, thisadditionaleconomicactivitygeneratedafurther €92billioninvalueadd(or0.6%ofGDP)inEurope.7

Theuseofmobiletechnologyalsocontinuesto driveimprovementsinproductivityandeciency forworkersandrms.Forexample,itreduces unproductivetraveltimeandfacilitatesimproved logisticsforbusinessesandworkersinservicesand manufacturing.Weestimatetheseproductivityimpacts werewortharound€254billionin2014(or1.6%of GDP).Overall,takingintoaccountthedirect,indirect andproductivityimpacts,in2014themobileindustry madeatotalcontributionof€500billiontoEurope’s economiesinvalueaddedterms,equivalenttojust over3%oftheregion’stotalGDP.

Source:GSMAIntelligence

Total(directandindirect)contributiontoGDP (2014€billion)

254

500

1.6%

92 49

105

3.2%

0.6%

0.3%

0.7% Mobile opeatos

related industies

Indiect

Poductivity

DIrECT

7. TheindiectimpactiscalculatedusingmultiplieestimatesthataedeivedfomthemostecentInputOutputtablespublishedbyEuostat.

| Mob ile driving growt h and innovation in Europ e

Total

THEMOBILEECONOMYEUROPE2015

2.1.1 Asignicantcontributiontoemployment andpublicfunding In2014mobileoperatorsandtheecosystemprovided directemploymenttoapproximately2.3millionpeople intheregion.Inadditiontothis,economicactivityin theecosystemgeneratesjobsinothersectors.Firms thatprovidegoodsandservicesasproductioninputs forthemobileecosystem(forexample,microchipsor transportservices)willemploymoreindividualsasa resultofthedemandgeneratedbythemobilesector.

Furthermore,thewages,publicfundingcontributions andprotspaidbytheindustryarespentinother sectors,whichprovideadditionaljobs.Weestimate thatin2014,around1.5millionjobswereindirectly supportedinthisway,bringingthetotalimpact(both directandindirect)ofthemobileindustrytoaround3.8 millionjobs.

Source:GSMAIntelligence

Employmentimpact Jobs(thousands)

1,509

1,344

486

3,761

2,251

281

48 Infastuctue

Opeatos

Handset Distibution Content,apps manufactuing andsevices

Diect

Indiect

T tal

Totalsmaynotaddupduetorounding.

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

Themobileecosystemalsomakesasignicant contributiontothefundingofpublicsectoractivity intheregionthroughgeneraltaxation.Formost countries,thisincludesvalueaddedtax,corporation tax,incometaxandsocialsecurityfromrmsand employees.Weestimatethattheecosystemmadea taxcontributiontothepublicnancesoftheregion’s governmentsofapproximately€84billionin2014.

Inadditiontotaxcontributions,mobilenetwork operatorsgeneratepublicfundsthroughthepayment offeesforspectrum.In2014,theallocationofspectrum licencesincountriessuchasGreece,Hungaryand Estoniageneratedapproximately€700milliontotheir respectivegovernments.

Source:GSMAIntelligence

Contributiontopublicfundingbythemobileindustry (2014€billion)

Mobilesevices VAT

HandsetVAT

| Mob ile driving growt h and innovation in Europ e

Copoatetax

Employeeincomeand socialsecuity

Totaltax

THEMOBILEECONOMYEUROPE2015

2.1.2 Outlookandtrendsfortheperiod 20152020 Weexpecttheeconomiccontributionofthemobile industryinEuropetocontinuetoincrease.Invalue addedterms,weestimatethattheecosystemwill generatearound€600billionby2020.Duetothe limitedgrowthprospectsforoperatorsandthe

ecosystem,themajorityofthisgrowthwillbedriven byimprovementsinproductivityandeciency,as theadoptionofnewermobiletechnologiesandM2M increases.

Source:GSMAIntelligence

EconomiccontributionofmobileindustryinEurope:outlookto2020 (€billion)

568

585

599

549 527 500

2014

504

2015

2016

2017

2018

2019

2020

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

2.2 Mobiledeliveringinnovationanda digitalEurope Europecontinuestoseeinnovationinallareasofthe mobileecosystem,withagrowingnumberofplayers andinnovativenewappsandservicesaectingall areasofdailylife.Operatorsarehelpingtodrive innovationacrosstheecosystemthroughpartnerships andinvestments.Telefónicaannouncedearlierin2015 thatitwouldinvestupto$200millioninastrategic partnershipwithCoralGroup,aventurecapitalrm thatinvestsininnovativestartups.Telefónicawillwork withCoralGrouptoexpandtheactivitiesofTelefónica OpenFuture,anonlineplatformthatfocuseson helpingstartupstoaccelerateandmature. Theinnovationarmsoffouroperators,Telefónica, OrangeandDeutscheTelekominEuropeaswellas SingaporeTelecom,haveannouncedplanstodevelop amutualsupportnetworkforeachcompany’sstart upventures.Thegoalistohelpnewventuresscale morequicklybygainingaccesstoresourcesand potentialcustomersoutsidetheirdomesticmarkets. AllthreeEuropeanoperatorshavealreadyestablished innovationhubsinEurope,andthesewillnowbe networkedwithSingTel’sInnov8networkinAsia. Therearealreadyanumberofareasofparticular successinEurope;forexample,fouroftheglobal topvemobileappbasedgamingcompaniesare European–anareaofgenuinemarketleading expertiseinthedigitalarena.DatafromVisionMobile indicatesthatintherstquarterof2015therewere morethan1.3millionappdevelopersintheEU28, equivalenttoaround23%ofthetotalglobaldeveloper base.ApprevenuesarealsotypicallyhigherinEurope thaninotherregions,withoverhalfofappdevelopers makingmorethan$500permonth.

8. Souce:“EuopeanUnicons–DoTheyHaveLegs?”GPBullhound,June2015

| Mob ile driving growt h and innovation in Europ e

Appsandnewserviceshavealreadyhadapositive impactonthedailylivesofindividualsacrossthe region,andarealsohavingapositiveeecton enterprises.Someofthesedevelopmentsarediscussed inmoredetailintheremainderofthissection.The transformativepotentialoftheappeconomyis allowinganewgenerationofentrepreneurstoemerge, withapositiveimpactonEurope’seconomyaswellas newexportopportunities. However,despitetheongoinggrowthoftheEuropean mobileecosystem,particularlyintheareaofapps andgaming,thelargesttechcompaniesgloballyare largelyUSbased,withseveralrecentlyemergingfrom AsiaPacic.NorthAmericahasclearlyestablished itselfatthecentreofthemobileecosystemoverthe lastdecade.Aswellasthemoreestablishedinternet companiessuchasGoogleandFacebook,theUS markethasrecentlyseenanumberofnewapps andservicesscalerapidly,bothdomesticallyand internationally,particularlythosebasedonthenew ‘sharingeconomy’,suchasUberandLyft. AsofJuly2015,thereweremorethan60UStech ‘unicorns’(privatecompanieswithvaluationsofmore than$1billion).Thereareagrowingnumberofunicorns inEurope,with13companiesattainingthisvaluation sinceApril20148.However,Europeisstilltrailingwhen itcomestoseeingpromisingstartupsscaleandgain prominenceatagloballevel.Oftheworld’stenlargest internetcompaniesbymarketvalue,themajorityare basedinNorthAmerica,afewinAsia,butnonein Europe.Europe’slargesttechnologycompany,Rocket Internet,hasacurrentvaluationofjustunder$5.5 billion.

THEMOBILEECONOMYEUROPE2015

Source:Bloomberg,CBInsights

World’sleadinginternetcompaniesbymarketvalue ($billion)

648 452 273

Althoughitoncedominatedtheglobalmarketforboth devicesandequipment,Europe’spositionhasbeen underminedoverrecentyears.Nokiawasthedominant handsetmakerin2007,accountingfornearlytwo thirdsofsmartphonesales.However,Nokiahasnowall butdisappearedfromthehandsetmarket,withlittle signofarevivalevenafteritsacquisitionbyMicrosoft. Thepositionismoreencouragingonthenetwork equipmentside,withthreeEuropeancompanies (AlcatelLucent,NokiaNetworksandEricsson)in theglobaltopve,althoughHuaweiandCiscoare generallyrecognisedasthegloballeaders. AkeychallengeforEuropeandevelopersandinternet companiesisthelackofscaleinnationalmarkets comparedtoforexampletheUS,oremergingmarkets inAsiasuchasChinaandIndia.Thechallengeofscale iscompoundedbytheissueofdierentnational

5 RocketInternet

NaverCorp.

Uber

Ebay

Tencent

Alibaba

Facebook

Alphabet

Apple

Rakuten

172

Baidu

175

regulatoryandlegalenvironments,withanoverall regulatoryenvironmentthatisoftennotsupportive ofinnovationsandthelaunchofnewdigitalproducts andservices.Partlytoaddressthisimbalance,aswell astohelpstimulatefutureeconomicgrowthandjob creationacrosstheregion,theEUhasdevelopedits DigitalSingleMarketstrategy.Thisstrategyaimsto fosterEuropeanentrepreneursandhelpreducebarriers toinnovation. Anumberofinnovationhubshavealreadyemergedin countriesacrosstheEU,thoughnonetodatehascome closetoreplicatingthecriticalmassofSiliconValley. TheseinnovationhubsincludeOxfordScienceParkand EastLondonTechCity(‘SiliconRoundabout’)intheUK, ‘SiliconAllee’inBerlin,IsarValleyinMunichand‘Silicon Docks’inDublin.

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

2.2.1 Mobilecommerceisgrowingstrongly Digitalcommercecontinuestoseestronggrowth acrosstheworld,butinEurope(asinmanyregionsof theworld)agrowingproportionofthesetransactions arenowbeingundertakenonmobiledevices.Atthe endoftherst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.Thisisstill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.

Source:Criteo

Mobileshareofecommercetransactions

29% 26% 30% 28%

Italy

Netherlands

36%

Spain

29%

Germany

30%

45% 43%

UK

Q42015 (estimate)

37%

| Mob ile driving growt h and innovation in Europ e

Q1 2015

THEMOBILEECONOMYEUROPE2015

GooglehaslaunchedAndroidPay(replacingthe GoogleWalletservice)intheUS,witharangeof bankingpartners.Fornow,however,itrelieson tokenisationofpaymentinformationastheprimary meansofsecurity.VisaEuropehasalreadyannounced planstopartnerwithGooglewhenAndroidPlay launchesinEurope,buttodatethereisnoformal launchdate.Morerecently,Samsunghasannounced planstolaunchSamsungPayinEurope,following theinitiallaunchinSouthKorea.Thecompanyhas announcedtheUKandSpainastheinitialfocus marketsforlaunch. TherealityisthatEuropeislikelytoseeongoingstrong growthinthemobilecommercespace,supportinga rangeofmobilepaymentapplicationsfromarange ofdierentproviders,includingbanksandmobile operators.Themovetomobilepaymentsisstrongly supportedbytheEU,giventheopportunitytomove

awayfromcashandintheprocessreduceboth transactioncostsandscopeforfraud. TheCommissionrecentlyagreednewrulesforpayment servicesinEuropethatshouldhelpreducecosts andencourage‘theemergenceofnewplayersand thedevelopmentofinnovativemobileandinternet paymentsinEurope’9.TheEuropeanPaymentServices Directive(PSD2)isareviewoftheoriginal2007 directive,designedtofacilitatetheemergenceofnew mobileandinternetpaymentservices.Therecognition ofnewplayersaspaymentinstitutions,authorisedto accessusers’accounts,meansnewplayersthatoer consumerstheopportunitytopayonlineviabank accountswillnditmucheasiertoenterthemarket. Asaresultofthis,newservicesarelikelytobecome amuchmoreprevalentpartofthemobileandonline commercialexperience.

2.2.2 ThepotentialofIoTinEurope TheInternetofthings(IoT)hasthepotentialtoplaya signicantroleinrealisingthepotentialofthedigital futureinEurope,withpositiveimpactsonboththe economyandbroadersociety.Mobileoperators,other ecosystemplayersandnationalgovernmentshave allrecognisedthepotentialofIoT,andthenumberof deploymentsandnewservicelaunchescontinuesto increase. TheEuropeanCommissionissupportiveofthe potentialforIoTtoimprovethelivesofcitizensacross theEU.ArecentstudysupportedbytheCommission estimatedthatthenumberofIoTconnectionsacross theEU28couldreach6billionby2020,bywhich timetotalrevenuescouldtotal€1.2trillion(including hardware,softwareandservices)10.Thereportidentied

severalkeyfocusareasor‘smartenvironments’with themostattractivegrowthopportunities,namelysmart manufacturing,smarthomes,smarthealthandsmart customerexperience. TheCommissionrecentlyannouncednewfunding commitmentsforitsHorizon2020programme,which fundsresearchinpriorityareasacrosstheregion.These includednewcommitmentsintheareasofautonomous carsandIoT,whichhavereceivedmorethan€100 millionand€139millionrespectively.Thetechnologies areexpectedtobekeyfactorsinthedevelopmentof smartcities,anareathathasitselfreceived€232million tobetterintegrateenvironmental,transport,energy anddigitalnetworksintheEU’surbanenvironments

9. Souce:“CommissioneHillwelcomesageementontheevisedPaymentSevicesDiective”EuopeanCommissionpesselease,May2015 10. Souce:“DefinitionofareseachandInnovationPolicyLeveagingCloudComputingandIoTCombination”EuopeanCommission,May2015

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

2.2.3 Smartmanufacturing Thepotentialfortheindustrialinternettorevolutionise manufacturinghasbeenrecognisedforsometime, andEuropeisnowseeingincreasinginternetand innovationinthisarea.InGermany,thegovernment hasinvestedtosupporttheconceptof‘Industrie4.0’, whichcouldseethetransformationofindustrythrough newtechnologiesanddigitisation.Thiscouldinvolve forexamplethecreationofselforganisingnetworks thatallowthemasscustomisationofproduction,using acombinationofrobotics,sensorsandconnectivityto

enableremotediagnosticsandpredictivemaintenance. Mobileoperatorsandotherecosystemplayersare alreadyplayinganactiveroleinrealisingthepotential ofsmartmanufacturing.Huaweihasbeenpartnering withDeutscheTelekominsupportofIndustrie4.0, whileanumberofplayersarepushingaheadwith outliningthestandardsfor5G,whichislikelytobea keyenablingplatformformanyoftheapplicationsand usecasestosupportthesmartmanufacturingconcept.

2.2.4 Smarthomes Smarthomesisanareathathasseennumerous servicelaunchesandisgainingparticulartraction withconsumers,helpedbythegrowingadoption ofsmartphonesandtabletsthatcanactasremote controlsforthewiderangeofconnecteddevices. Smarthomeplatformshavebeendevelopedbyarange ofplayersfromacrossthemobileecosystem,including AppleandGooglebutalsoanumberofmobile operators.DeutscheTelekomhaslaunchedaplatform forthedomesticmarket,QIVICON,withthecompany indicatingthatitisindiscussionswithoperatorsin otherEuropeanmarketsoutsideGermany.Telefónica hasbeentrailingahomesecurityandmonitoring servicebasedonAT&T’sDigitalLifeplatform,and recentlylaunchedaserviceoeringforitsMovistar customersintheSpanishmarket.OrangeFrance launchedHomeliveinNovember2014,asolution thatlinkstheconsumertotheconnectedobjects (thermostats,lightswitches,smokedetectorsandso on)intheirhome,allowingthemtomanageappliances remotely.Theoperatorannouncedthatinseven monthsitsold15,000Homeliveautomationpackages. TheUKoperatorEEhasannounceditsownpushinto connecteddevices,withthecompany’sConnected Strategyfocusedontheconnectedhome,aswellascar andbusiness.EECEOOlafSwanteepredictedsalesof

| Mob ile driving growt h and innovation in Europ e

connecteddeviceswillexceedthoseofsmartphonesin lessthantwoyears. Agrowingrangeofappliancemanufacturersarealso supportingthesmarthomesinitiative.Boschrecently announcedthatitwillusetheHomeConnectstandard thatwillallowarangeofdomesticappliancesto beincludedinhomeenergymanagementsystems, allowingforexampleconsumerstousesolarenergy topowertheirappliances.Samsunghasannounced arangeofnewsmarthomesensorswithanupdated controlhub,undertheSmartThingsbrandthatthe companyacquiredin2014.SamsungSmartThings iscompatiblewithmorethan150connectedhome devicesfromarangeofmanufacturers,including PhilipsHue,Bose,Yale,Honeywell,Lifx,DLink,Fibaro andAeotec. Achallengewiththegrowingrangeofconnected devicesanddierentplatformstolinkandcontrol themisinteroperability,anissuethatcouldprovea signicantbarriertoconsumeradoption.Samsungis takingtheapproachofmaintainingSmartThingsas anopenplatformwithopenstandards,withthegoal ofattractingawiderangeofdevelopersandallowing dierentmanufacturerstoconnecttheirdevicestothe platform.

THEMOBILEECONOMYEUROPE2015

2.2.5 Smarthealth Thereisgrowingconsumeradoptionofwearable devicesacrossmanyEuropeanmarkets,butwitha particularapplicationintherelatedareasoftnessand health.Locationawaremedicalwearableshavefor sometimeheldthepromisethattheycouldaddressa rangeofhealthissues,andthispromiseisstartingtobe realised.Withagrowingnumberofmhealthappsnow available,theiruseisdevelopingrapidlyfromlifestyle andwellbeingapplicationstomoresophisticated diagnostictools. VodafoneisworkingwithLively,anemergingproviding ofremotehealthservices,tosupportawearabledevice thatcanhelpelderlypeopleremainindependentandin theirownhomesforlonger.Thedeviceconnectstoan inhomehubthatispreinstalledwithaVodafoneM2M SIM,andconnectswithactivitysensorsdesignedtobe placedonpillboxes,refrigeratorsanddoorsinorderto logtheuser’sdailyroutines.Informationcanthenbe accessedbyrelativesandcarerstocheckforexample

thatmedicationhasbeentakenasrequiredandwhen theuserleavesthehouse.Theservicehasalreadybeen launchedintheUSandisbeinglaunchedintheUK. TheCommissionhassupportedthedevelopment ofmhealthapplicationsinEurope.EUfunding programmesforresearchandinnovationaimto encouragethedevelopmentofinnovativemhealth solutions,includingtheHorizon2020initiative,for example. InEuropethereremainsthequestionofwhether medicalappsshouldberegulatedasmedicaldevices (undertheEUMedicalDevicesDirective).Greater guidanceforappdesignerswouldbehelpful,andcould helpstimulatefurtherdevelopmentofthemhealth marketinEurope.Generally,healthappsareregulated asmedicaldevicesandwillhavetocomplywiththe MedicalDevicesDirectiveiftheirintendedpurposeis theprevention,diagnosis,treatmentand/ormonitoring ofadisease.

2.2.6 Otherareas Thereareongoingdevelopmentsinmanyotherareas oftheIoTspace,particularlyinconnectedcarandeet telematicsservices.OrangeBusinessServicesacquired Ocean,aeetmanagementcompany,tostrengthen itsverticalexpertiseanddevelopcustomizedM2M/IoT solutions.Inaddition,OrangeplanstoworkwithOcean todevelopneweetmanagementsolutionsbasedon Ocean’sserviceplatform.Thisfollowsinthefootsteps ofVodafoneacquiringCobraAutomotiveinAugust 2014,asimilarmovetostrengthenthecompany’s credentialsintheconnectedcarmarket. Thereisgrowinginterestintheconceptofthe automatedordriverlesscar,withactiveparticipants fromthetraditionalcarmakerstoplayersfromacross themobileecosystem.Governmentsarealsonow becominginvolvedandsupportinginitiatives.An increasingnumberofautomotivemanufacturersnow

supporteithertheAndroidAutoorAppleCarPlay interfaces,althoughmanufacturersarealsolookingto automateagrowingnumberoffunctionsintheircars astheylooktomaketheconceptofthedriverlesscara reality.However,questionsoverthelegalityandsafety ofcertainautomatedfunctionsatthenationallevel remainachallengeinEurope.Providersalsoneedto addressEuropeanlawsarounddataprivacy. AconsortiumofGermancarcompaniesacquired Nokia’s‘Here’mappingbusinessfor€2.8billion, animportantstepinensuringthepositionofcar manufacturersintheselfdrivemarket.Internet playerssuchasUberandBaiduwereintherunningto purchasethebusiness,reectingthestrategicvalueof HereaspossiblythestrongestcompetitortoGooglein mapping.

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

2.2.7 GrowthinM2Mconnections ThetotalnumberofcellularM2Mconnectionsstood at64millionattheendofthethirdquarterof2015,a gurethatissettoincreasetomorethan180million bytheendof2020.Thereremainspotentialupsideto

thisforecastifgovernments,regulatorsandindustry playersenableanumberofgrowthfactorsoverthe comingyears.

Source:GSMAIntelligence

M2MconnectionsinEurope (Million)

182.0 158.0 134.6 110.9 87.8 45.9

2013

54.7

2014

67.9

2015

2016

Severalcompanieshaveexperiencedstronggrowthin thenumberofM2Mconnectionsinrecentquarters.For example,intheGermanmarketduringthersthalfof 2015,DeutscheTelekomGermanyadded588,000new M2MSIMcardsinwhatitclaimedwasanaggressively pricedmarket.Itstatedthisgrowthwasduetothe increaseduseofSIMcards,especiallyintheautomotive andlogisticsindustries. Althoughcellularwillcontinuetoplayanintegralrole inthedevelopmentofIoT,manyoftheconnected

| Mob ile driving growt h and innovation in Europ e

2017

2018

2019

2020

devicesthatwilldeliverIoTserviceswilluseshort rangewirelesstechnologies,ratherthancellular connectivity.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devices thatneedtobelowmobility,lowpowerandlowcost. However,mobilewillcontinuetoplayacrucialroleas anenablingtechnologyforIoT,actingasanaggregator orhubtoconnectarangeofdevicesandoeringwide areaconnectivity.

THEMOBILEECONOMYEUROPE2015

2.3 FuturenetworksinEurope Operatorsinmanycountriesacrosstheregionhavealready launchedRichCommunicationsServices(RCS),whilethereis growingmomentumbehindvoiceoverLTE(VoLTE)andvoice overWiFideployments.Vodafoneclaimedtherstcommercial VoLTEdeploymentinGermanyearlierin2015,aservicethe companyisnowrollingoutinotherEuropeanmarkets.VoLTE servicesarecurrentlyavailableineightcountriesacrossEurope, andHDvoiceisavailableinthevastmajorityofcountries.

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

rCs,vltehdc RCS

V LTE

HD v ice

Austria

NOPLANS

LIVE

Belgium

NOPLANS

LIVE

Bulgaria

NOPLANS

LIVE

Cr atia

PLANNING

NOPLANS

LIVE

Denmark

NOPLANS

PLANNING

LIVE

Est nia

NOPLANS

LIVE

Finland

NOPLANS

LIVE

France

LIVE

PLANNING

LIVE

Germany

LIVE

Greece

LIVE

NOPLANS

LIVE

Hungary

LIVE

NOPLANS

LIVE

Ireland

LIVE

NOPLANS

LIVE

Italy

LIVE

Latvia

NOPLANS

LIVE

Lithuania

NOPLANS

LIVE

Luxemb urg

LIVE

NOPLANS

LIVE

Malta

LIVE

NOPLANS

LIVE

PLANNING

LIVE

N r ay

NOPLANS

PLANNING

LIVE

P land

PLANNING

LIVE

P rtugal

LIVE

R mania

LIVE

NOPLANS

LIVE

Sl vakia

LIVE

NOPLANS

LIVE

Sl venia

NOPLANS

LIVE

S eden

NOPLANS

PLANNING

LIVE

S itzerland

NOPLANS

LIVE

Czech Republic

M ntenegr Netherlands

Serbia

Spain

| Mob ile driving growt h and innovation in Europ e

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With4Gnetworkcoveragehavingexpandedsignicantly inrecentyearstostandtodayatmorethan80%ofthe population,operatorsacrossEuropearealsomovingtodeploy LTEAdvanced(LTEA).LTEAoersmuchfasterspeedsthrough carrieraggregation.Anumberofcountrieshaveseentriband LTEAlaunches,withSwisscomforexamplerecentlyclaiming thatithadachievedpeakspeedsof436Mbpsinlivetrials. Operators,equipmentvendorsandotherecosystem playersareplayinganactiveroleinthedevelopment ofthenextgenerationofmobilenetworkstandards, namely5G.Discussionscentreonwhether5Gwillbe atruegenerationalshiftinconnectivitytechnology ortheconsolidationofexisting2G,3G,4G,WiFiand othertechnologiestoprovidevastlygreaternetwork coverageandalwaysonreliability.Considerable advancementstowardsthehyperconnected societyhavealreadybeenmade.Examplesinclude technologiessuchasnetworkfunctionvirtualisation (NFV),softwaredenednetworks(SDNs)and heterogeneousnetworks(HetNets).Thesetechnologies areregularlybundledunderthebannerof‘5G’,despite thefactthattheyarealreadybeingbroughttomarket byvendorsandinvestedinbyoperators. TheCommissionisalsoplayinganactiveroleinthe developmentof5G,withaparticulardesiretosee Europeattheforefrontoffuture5Ginnovationand deployments.AtthelastMobileWorldCongress, theEUCommissioner,togetherwithanumberof Europe’sleadingtechnologycompanies(including

AlcatelLucent,Ericsson,Nokia,Orange,ThalesAlenia Spaceandotherpartnersinthe5GPublicPrivate Partnership)presentedtheirvisionofthefutureof5G technologiesandinfrastructure.TheCommissionhas alsonowsignedcooperationagreementswithSouth KoreaandChina,andcontinuestoinvestin5Gresearch acrossEurope,withacommitmenttoinvestatotalof €700millionby2020.TheCommissionexpectsthat themobileindustrywillalsocommittosignicant investmentsinsupportofthedevelopmentof5G,with agureofupto€3billionoverthesameperiod. Therearealsoanumberofinitiativesaround5Gat thenationallevel.The5Ginnovationcentrerecently openedintheUK,witharangeofbackersincludingthe UKgovernment;operatorssuchasEE,BT,Telefónica andVodafone;andequipmentvendorsincluding Huawei,FujitsuandSamsung.Focusareasofthecentre includeplanstodevelopa5Gtestbednetworkandto ensurethatinnovationsaround5Gwilldirectlybenet theconsumerexperience.

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2.4 GSMAactivitiestosupportthedeveloping mobileecosystem TheGSMAhasidentiedfourkeygrowthareasthatpresentboth signicantopportunitiesandbenetsforconsumers,aswellas providingclearopportunitiesformobileoperatorstocollaborate andindoingsotoplayanactiveroleindeliveringthesefuture opportunitiesandbenets.

Co NNECTED LIVING TheGSMA,throughitsConnectedLivingProgramme,aimstofurtherdevelop theIoTmarket,bothwithintheEuropeanregionandattheglobalindustrylevel. TheinitialfocusoftheConnectedLivingprogrammeistoacceleratethedelivery ofnewconnecteddevicesandservicesintheM2Mmarketthroughindustry collaboration,appropriateregulation,optimisingnetworksanddevelopingkey enablerstosupportthegrowthofM2Mintheimmediatefuture.Theultimate aimistoenabletheIoT,aworldinwhichconsumersandbusinessesenjoyrich newservices,connectedbyanintelligentandsecuremobilenetwork. Workingwithitspartnersacrosstheecosystemandkeyverticals,theGSMAis activeinanumberofareastodriveforwardthisinitiative: • Remote SIM provisioning for M2M:theGSMA’svisionistouniteall stakeholdersbehindasingle,commonandinteroperableglobalembedded SIMspecicationtohelpacceleratethegrowingM2Mmarket. • IoT business enablers:theGSMAisworkingtocreateasustainableM2M regulatoryandpolicyenvironmentthatenablesoperatorstounlockthe consumerandbusinessbenetsoftheIoT. • Secure IoT networks:theGSMAisworkingtoestablishsecurityrequirements forhowmachinesshouldcommunicateviathemobilenetworkinthemost secureway. • Mobile IoT:theGSMAisworkingwithmobileoperatorsandecosystem partnerstoassesssolutionsforlowpower,wideareaconnectionstoenable furtherscalingoftheIoT.

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NETw o RK 2020 TheGSMA’sNetwork2020programmeisdesignedtohelpmobilenetwork operatorsinthemovetoanallIPworldandhelpthemdeliverglobal interconnectedallIPcommunicationsservicestoconsumerssuchasvoiceover LTE,videooverLTE(ViLTE),voiceoverWiFi(VoWiFi)andRCS.Operators areinauniquepositiontooersecure,ubiquitousallIPsolutionswithreach, reliabilityandrichness.Thetransitionwillallowthemtodeliveranenhanced customeruserexperiencethatwheninterconnectedwithotheroperators oerstrulyglobalreachandscale.Theprogrammeisalreadyhelpingoperators fromaroundtheworldtomigratefromcircuitswitchedtechnologytoanallIP infrastructurewhilehelpingthemtomaintainservicecontinuity. TherstphaseoftheprogrammefocusesonhelpingnetworksdeployVoLTE andconversationalvideocallsoverLTE,VoWiFiandencouragingtheRCS ecosystemtohelpoperatorsprepareforandlaunchRCSbasedinteroperable solutionsandVoLTEroamingarchitecturesfortheircustomersaroundtheworld. Additionally,theNetwork2020programmewillworkwithoperatorsto determinethetechnicalandcommercialspecicationsforoperatortooperator qualityofservice(QoS)forIPservices,andencouragethemtoincorporatethe QoSphilosophyintotheircustomersolutions.TheNetwork2020programme alsoaimstohelpcatalysecommercialimplementationsforIPinterconnect solutionsbetweenoperatorsandservice/contentproviders. Finally,untilsuchtimeastheindustryrequirementsanddenitionof5Ghave stabilised,theGSMAwillfocusonimprovingtheoverallsustainabilityofthe mobiletelecomssector,allowingmorenetworkstoachievegreaterconnection numbersbyenhancingthebusinessmodelforexpandedcoverageandoering connectivitytothoseintheworldthatcurrentlyhavenoconnectivityatall.

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DIGITAL Co MMERCE Workingwithmobileoperators,regulators,banks,retailers,transportoperators andotherserviceprovidersbothinEuropeandacrosstheglobe,theGSMA’s DigitalCommerceprogrammeisactiveindrivingthemassadoptionofSIM secureddigitalcommerceservicesglobally. TheGSMAengagesregularlywithkeygovernmentandregulatorybodies, providingadviceandguidanceonhowtoharnessthepotentialbenetsof SIMbasedservicesintransport,retailandothersectorsoftheeconomy,and developingindustrypositionsonaspectsofpolicy,highlightingtheimpactof regulationandinformingregulators’decisionmakingprocesses. TheprogrammeisalsofocussedondevelopingMobileConnectasanenabler fordigitalcommerceusecases.MobileConnectisaGSMAservicelaunchedin 13countries,designedtodeliverauniversalidentitythatsecurelyauthenticates theuserandprovidessafeaccesstomobileanddigitalservicesviathemobile phone. Asthenumberofcommercialmobilecommerceservicesaroundtheworld rises,theGSMAcontinuestopromotetheuseofcommonstandardstoenable theglobalinteroperabilityofservicesandgenerateeconomiesofscale,liaising withotherrelevantstakeholderstoensuretheconsistencyoftheoverallsetof specicationsinvolvedinmobilecommercedeployments.Coveringmanytopics, thesespecicationssetoutacommonframeworkofrequirementstoensure interoperabilityandanecientandconsistentdevelopmentanddeploymentof mobilecommerceservices. TwoareasoffocusfortheDigitalCommerceinitiativeareasfollows: • Tokenisation:theDigitalCommerceprogrammeisworkingwithoperators fromaroundtheworldtoprovideatokenisationbasedframeworkthatwill allowbankstoputtheirpaymentscardsinnonApplephones,withabank onboardingmodelthatincludestheSIMplayingaroleasthesecureelement. • Remote payments:theGSMAisworkingwithoperatorsandindustry partnerstoimprovetheuserexperiencewhenusingmobiledevicesfor remotepayments.Inadditiontobeingtechnicallysecure,solutionsneedtobe simpleandwidelydistributed.

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PERSo NAL DATA TheGSMA’sPersonalDataprogrammeisworkingwithmobileoperatorsthat havelaunchedidentityservicesacrosstheglobe.Themobileindustryneedsto delivercommonandconsistentinterfacestoarangeofdigitalserviceproviders, whichatthesametimeneedtooerseamlessandconvenientsolutionsto consumers. Theuseofstandardsandinteroperabilityarethereforekey,inparticularthe needtocreateacommon,industrywidesetofidentityrelatedAPIs(application programminginterfaces).TheGSMAisworkingcloselywithoperatorsto establishauniformsetofAPIstounderpinkeymobileidentityservices. MobileConnectiswellplacedtoaddresstheneedsofbothserviceproviders actingasaprimaryloginforwebsites,apps,andotheronlineservicesand consumers’demandsforstraightforwardandsecureauthenticationand identication.Thesolutioncanhelpgovernmentagenciesandotherservice providersincreaseusageoftheironlineservices,improvingeciency,enriching theenduserexperienceandincreasingengagement. MobileConnecthasbeenspecicallydesignedtocomplywiththeEuropean Union’seIDASRegulation(regulationonelectronicidenticationandtrust servicesforelectronictransactionsintheinternalmarket),whichiscurrently beingimplementedbythe28MemberStates.TheRegulation,whichintroduces newrulesonelectronicidenticationservices,isdesignedtoenablecitizensto carryoutsecurecrossborderelectronictransactions;forexample,enrolment inaforeignuniversity,lingofmultipletaxreturns,accesstoelectronicmedical recordsorauthorisationofadoctortoaccessthemonone’sbehalf.Itwillalso enablecitizensmovingtoanotherMemberStatetomanageregistrationandall otheradministrationonlinewiththesamelegalcertaintyastheycurrentlyhave withtraditionalpaperbasedprocesses. GovernmentagenciescoulduseMobileConnectfortheiregovernmentservices toachievetheoptimumbalancebetweenmaintainingsecurity,obtaining consent,andprovidingasmoothandstraightforwardenduserexperience.This wouldhelptheEuropeanUniontorealisetheobjectivesoftheeIDASRegulation andfuelthegrowthofEurope’sdigitaleconomy. TheGSMArecentlyannouncedthatMobileConnecttrialsarenowunderwayin allregionsoftheworld,with17mobileoperatorsin13countrieshavinglaunched theservice.Thereareplansforadditionallaunchesandbetatrials.Operators committedtolaunchincludeBouyguesTelecomandOrange(France);Deutsche TelekomandVodafone(Germany);TelecomItaliaandVodafone(Italy);Orange, TelefónicaandVodafone(Spain);Swisscom(Switzerland)andVodafone(UK). OrangeisalsocommittedtolaunchtheMobileConnectserviceinBelgium, PolandandRomania.

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Deliveringthe DigitalSingleMarket

DeliveringtheDigitalSingleMarketintheEUwillrequire increasedinvestmentandinnovation,rstandforemostin digitalnetworks.EuropeanCommissionPresidentJuncker hasprioritisedtheDigitalSingleMarketasarguablythesingle biggestfactorindeterminingEuropeangrowthoverthe comingyears.Indeed,theCommissionestimates€415billion11 inadditionalgrowthperyearfromafullyrealisedDigitalSingle Market.Investmentindigitalnetworksisthereforeinvestment forEuropeangrowth.

11. Souce:“ADigitalSingleMaketStategyfoEuope”,EuopeanCommission,May2015

| Delivering the Digital Sing le Market

THEMOBILEECONOMYEUROPE2015

TheDigitalSingleMarketagendahasnotonlycaptured theinterestoftheobviousplayerssuchastelecoms andinternetcompanies.Theautomotive,nancial, health,energyandmanufacturingindustries,as wellaspublicauthoritiesinterestedinsmartcityor egovernmentsolutions,areallengagingwiththis policyatEUlevel.TheDigitalSingleMarketmatters tomanyindustries,justasdigitalmatterstopeoplein theirdailylives. TheDigitalSingleMarketisfoundedontheideaofthe ‘digitalisationofeverything’,witheverythingbeing connected.Everybusiness,industryorservicecan improveandinnovatethroughthisconnectivity.Itwill facilitatenewbusinessmodels,increaseecienciesand improveservicesacrossmanydierentsectors.Adding connectivitytoavastarrayofmachinesandvehicles tocreatewhatCommissionerGüntherOettingercalls ‘Industry4.0’willtransformenterprises,presenting newsourcesofgrowthandcompetitivenessacrossthe economy.Asignicantelementofthisconnectivitywill bebasedonmobilenetworks,actingasanaggregator orhubtoconnectarangeofdevicesoroeringwide areaconnectivity.Investmentinmobilenetworksis thereforekeytotheDigitalSingleMarketandtogrowth inEurope.

TheDigitalSingleMarketalsorecognisestheneedto removeonlinebarriersforbusinessesandconsumers, creatinganenvironmentofinnovationarounddigital servicesandnetworks.Itenvisagesanextensive overhaulofrules,policiesandinitiativesacrossthe board,encompassingareassuchascopyrightlaw, parceldelivery,onlinesecurity,cloud,bigdataand,of course,theEUTelecomsFramework. TheEUTelecomsFrameworkReviewprovidesthe chancetosettherightrulestoensurethemobile connectivitylevelsrequiredfortheDigitalSingle Market.Withanewsetofrulesthatencouragesmobile sectorinvestment,theDigitalSingleMarketstandsa realchance.Forexample,focusingonaconsistentand predictablesinglemarketapproachtospectrumpolicy andmanagementwillbeanessentialbuildingblockof thestrategy.Toachievethis,thereviewprovidesakey opportunitytoaddressthecurrentfragmentationof spectrumpolicyinEurope,particularlythetimingof spectrumavailability,auctiondesign,durationoflicence andpriceofspectrum. Thereleaseofthedigitaldividendspectrumand operatorinvestmentsinrecentyearshaveaccelerated themigrationinEuropeto4G,thoughEuropestilltrails otherdevelopedmarketssuchastheUSandSouth Koreaonoverall4Gadoptionrates.

Delivering t he Dig ital Single Market |

THEMOBILEECONOMYEUROPE2015

TheEUTelecoms(ElectronicCommunications)Frameworkrules haveservedtheiroriginalpurposewell.Theyhaveopenedup previousstatemonopoliesandfosteredcompetitioninboth mobileandxedtelecomsmarkets.Operatorshaveinvested morethan€100billioninnetworkdeploymentsoverthelast veyears.Althoughtheoperatingperformanceofoperatorsin Europeappearsnowtobestabilising,cashowmarginsremain wellbelowtheirhistoricalaveragesandmayraisequestions abouttheindustry’sabilitytonancethenextwaveofinvestment around5G.

Aresultoftheinvestmentisthedigitalexperiencemost Europeancitizenshavetoday.Ahugearrayofbusiness modelsanddigitalinnovationshasdevelopedand prospered,andcitizenshaverespondedwithtakeup ofmobiledevicesandsubscriptionstodigitalservices. Innovationhasourished.Almostallofthishastaken placesincetheframeworkwaslastreviewedin2009. Thoserulesdidtheirjob,buttoday’smarketisutterly transformedintermsofthevarietyofplayersoering voice,messageandrelatedcommunicationservices. Forexample,the2009frameworkrulesdidnot envisionvoiceoverIPorIPmessageservices,yetthese arenowubiquitous.Indeed,newbusinessmodelsand innovativenewservicescontinuetoemerge. Againstthisbackground,thebusinessmodelsofthe telecomsinfrastructurecompanies,whoareregulated bytheEUTelecomsFramework,mustalsobeallowed toevolveandadapt.Thatiswheretheexisting regulatoryframeworkisnotworking.Indeed,itis inhibitingthesignicantstepchangeininvestment

| Delivering the Digital Sing le Market

forthefutureexpectedofthedigitalinfrastructure companies,especiallyiftheDigitalSingleMarketis tohappen.Therulesformobilenetworkinvestors arepreventingthemfromcompetingwhenitcomes tolargeswathesoftheservicesdeliveredover theirnetworks. Thatparadoxneedsnowtoberesolved,andthe TelecomsFrameworkReviewpresentstheideal opportunity.Itisanopportunitytomaketherulesas futureproofaspossible.Thisiscertainlyabigtask, tobeundertakenthroughdialoguebetweenpolicy makers,industryandstakeholdersoveraperiodof policydevelopment.However,itwouldbeagoodstart tosimplyshiftthemainemphasisofregulationfroma sectorspecicapproach,aswiththecurrentTelecoms Framework,toonethatis‘horizontal’,basedon generalprinciplesandtargetingthefunctionorservice inquestion(e.g.electronicvoicecommunications services).

THEMOBILEECONOMYEUROPE2015

Aresultoftheinvestmentisthedigital experiencemostEuropeancitizenshave today.Ahugearrayofbusinessmodels anddigitalinnovationshasdevelopedand prospered,andcitizenshaveresponded withtakeupofmobiledevicesand subscriptionstodigitalservices.

Mobile d riving g row th and innovation in Europe |

THEMOBILEECONOMYEUROPE2015

Rethinknotreview Thelegalframeworkhasstruggled technologicalandbusinessmodelc IfweareseriousaboutaDigitalSin make‘futureproof’areality.Somu somuchisexpectedoftheDigitalS todeliverit,acompleterethinkisre opportunitytodoso. Fromtheperspectiveofmobilenetworkinvestors,a successfulrethinkbytheEUofitsregulatoryapproach wouldfollowthreeprinciples: • A thorough assessment of the vision and regulatory objectivesbeingpursued,andanexaminationof howthoseobjectivescanbestbeachieved.Only thenwillitbepossibletoagreeonmeasures. • As many of today’s legacy regulatory structures are outdated,policymakersshouldtakeacleanslate approachthatassessescurrent,aswellaspotential new,regulations.Theyshouldidentifytheoptimal meansofachievingtheregulatoryobjectives, withoutreferencetolegacyregulatoryregimes andapproaches.Thisrecognisesthatchangesin

tech then focu • To e Digit shou appr mod rules inev Such obje whil

TheDigitalSingleMarketstrategy,tog TelecommunicationsRegulatoryFram opportunityforthisrethink. AndEuropecanonceagainleadthew

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THEMOBILEECONOMYEUROPE2015

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