Mobile data use leads to increase GDP growth

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Doubling of mobile data use leads to 0.5% increase in GDP growth across 14 countries: GSMA

Nov 20,2012

Telecom Lead India: Doubling of mobile data use leads to an increase of 0.5 percentage points in the GDP per capita growth rate across 14 countries.

10 percent rise from 2G to 3G penetration increases GDP per capita growth by 0.15 percentage points.

In developing markets, 10 percent expansion in mobile penetration increases productivity by 4.2 percentage points.

“Total mobile connections will stand at 6.8 billion with mobile subscriber penetration at 45 per cent by the end of 2012,” said Tom Philips, chief government and regulatory affairs officer, GSMA.

Total mobile data usage has more than doubled on average every year from 2005 to 2010 in each of the 96 countries in the sample. In Western European countries, it grew by 350 percent.

The impact of increased mobile data usage is stronger in countries where the average level of mobile data consumption per 3G connection is comparatively higher. Countries characterized by a higher level of data usage per 3G connection, such as Russia, the UK and South Korea, have seen an increase in their GDP per capita growth of up to 1.4 percentage points. The effect is more limited for countries where mobile data usage is currently less prevalent, such as China, India, Mexico and South Africa.

“This study is an important addition to the growing body of empirical evidence demonstrating the impact of broadband on economic growth,” said Robert Pepper, vice president, Global Technology Policy, Cisco.

GSMA suggests that rather than look to capture value from the mobile industry via sector specific taxation and high regulatory fees, government could seek to incent investments in mobile broadband networks, which will deliver significant economic and social benefits.

The report from GSMA and Deloitte draws from research of data usage and economic growth across 14 countries provided by Cisco Systems based on their Visual Networking Index (VNI), as well as Deloitte studies on the productivity impact of mobile in 79 countries and the impact of 3G penetration across 96 countries.

“The development of data services have the potential to drive economic development in the same way in which voice services have in previous generations,” said Chris Williams, Deloitte telecommunications partner.