The GSMA's annual European Mobile Economy Report shows that mobile contributed Eur 910 billion of value to Europe’s economy in 2022, whilst mobile operators will continue to face real investment challenges as bandwidth demands grow
Mobile data traffic in Europe will almost triple over the next five years, fueled by 4G migration in central and eastern Europe and increasing improvements in 5G coverage and capacity, according to new research by the GSMA.
Analysis compiled for the organisation’s annual European Mobile Economy Report indicates that 5G subscribers, in particular, are interested in adding high-bandwidth services and content to their mobile contracts, as demand for high quality gaming, extended reality, and video content grows. In turn, these demands will require continued investment in Europe’s mobile networks by operators, who are already expected to spend more than Eur 198 billion on upgrading their networks by 2030.
In further analysis, the report, which evaluates the value of the mobile ecosystem to Europe’s economy, shows that:
- The mobile sector added Eur 910 billion of value to the European economy in 2022, with mobile technologies and services generating 4.3% of GDP across Europe.
- The entire ecosystem accounted for 2.2 million jobs, directly or indirectly, in 2022.
- Mobile-based productivity contributed Eur 670 billion to the European economy while operators’ own contribution generated Eur 110 billion.
- By 2030 it is expected that the sector’s economic contribution will reach Eur 1 trillion, driven mostly by continued expansion of the ecosystem, and vertical segments benefitting from the improvements in productivity and efficiency delivered by the take-up of mobile services.
The GSMA found that the mobile ecosystem contributed Eur 110 billion in taxes in 2022, with employment taxes and social security generating Eur 50 billion, followed by services, VAT, sales taxes and excise duties at Eur 40 billion.
The latest report also reveals that 5G will become Europe’s dominant mobile technology within the next three years, driven by uptake in Germany and the UK. By 2030 5G is expected to reach 87% of all users.
As it develops, the GSMA expects the technology to benefit a range of business sectors as European economies incorporate 5G use cases into their activities. By 2030, 53% of 5G’s business benefits will originate within the services sectors, while almost 30% will come from manufacturing, driven by applications such as smart factories, smart cities and smart grids. To this end, 5G will help drive European GDP growth, accounting for Eur 153 billion of economic benefits by the next decade, and representing some 15% of the overall economic impact of the mobile sector. Many of these benefits will materialise over the next five years.
The continued growth of 5G is tempered by concerns about the impact of policies holding back investment in next-generation network technologies in Europe, threatening the bloc’s digital leadership globally, as well as its ambitious ‘Digital Decade’ goals. For example, European adoption of more capable ‘standalone’ 5G continues to trail behind other regions: at the end of 2022, only 5% of live 5G networks in Europe were 5G SA, compared with 25% in Asia Pacific, a reflection of the challenging operating environment operators in Europe continue to face amid market fragmentation and low returns.
Daniel Pataki, VP for Policy and Regulation, and Head of Europe for the GSMA, said: “Europe has a strong history of leadership in mobile and digital technologies, but strong, sustained investment in networks is now needed to regain that leadership in the face of global competition. We’re encouraged to see European policymakers now facing up to that reality and examining the potential for meaningful policy change on areas such as consolidation, spectrum harmonization and the creation of fairer investment models for infrastructure, as we go into 2024. Our report shows that action is needed now to give European citizens and businesses the digital infrastructure they need for the future.”
Other key findings
- The mobile Internet usage gap continues to narrow, with more than 460 million Europeans – 85% - now connected, reducing the gap to just 14%. The majority of European countries enjoy Internet coverage by mobile with several countries, including Denmark, Italy, Spain and Portugal, seeing penetration above 90% in 2022.
- There are over 900 million active connections in Europe, made via smartphones and ‘feature’ phones. Ownership of such devices will reach 91% by 2030, enabled by greater affordability across the device domain.
- Satellite connectivity is flourishing as mobile operators and satellite companies seek to address coverage gaps through connectivity to Low Earth Orbit constellations.
- Generative AI is being actively explored by operators for activities such as code development, network management and customer care.
- The shift to green gains momentum, with operators and handset manufacturers alike increasing their focus on circularity, device longevity and use of recyclable materials.
- Europe's fintech sector has expanded further, securing more than 24% of global investments in 2022, and driving a general modernisation of banking in the region.
The full 2023 Mobile Economy Report Europe can be accessed here.