The U.S. is ahead of the European Union in the deployment of advanced wireless technologies and services – and EU consumers are worse off as a result, according to a new report from worldwide mobile operator association GSMA written by Navigant Economics.
The report notes that although, on average, U.S. consumers pay more than EU consumers for wireless service ($69 versus $38 monthly) U.S. consumers pay less per unit of usage. The authors note, for example, that U.S. consumers use five times more voice minutes and nearly twice as much data as European consumers on a monthly basis.
U.S. consumers’ greater mobile data usage can be explained, in part, by the wider availability of higher speed services. Nearly 20% of U.S. connections will be on LTE networks by year-end 2013, compared to fewer than 2% in the EU, the report projects.
Not surprisingly, the report also notes that mobile investment in the U.S. has outpaced that in Europe, with capital expenditure in the U.S. growing by 70% since 2007, while declining in the EU.
One reason Europe has been slower to deploy 4G than the U.S. is that in some European countries, there is less spectrum available than in the U.S. for new deployments. That’s a factor noted in the GSMA/Navigant report that was also documented in a recent FCC report.
Another interesting finding of the GSMA/ Navigant report was that although average revenue per user in both the U.S. and the EU has been dropping, this trend has been offset in the U.S. by an increase in the number of mobile data devices used by each subscriber. As a result, revenue per subscriber or connection in the U.S. is actually increasing, while revenue per connection in the EU continues to decline.
Report blames regulators
The GSMA/Navigant report blames regulators for the state of the EU wireless industry.
“EU regulatory policies have resulted in a fragmented market structure which prevents carriers from capturing beneficial economies of scale and scope and retards the growth of the mobile wireless ecosystem,” the authors state.
The authors recommend that regulators refocus policy on “enhancing dynamic competition and fostering innovation” rather than “preserving competitors and achieving short-run price cuts.” In addition, regulators should simplify merger reviews, harmonize spectrum policy and “forego discrimination in favor of new entrants,” the report states.
According to the authors, these recommendations would put European regulations more in line with the policies that have fostered innovation and the deployment of advanced wireless services in the U.S.