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The Mobile Economy North America 2019

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The Mobile Economy North America 2019 The Mobile Economy North America 2019 Copyright © 2019 GSM Association The GSMA represents the interests of mobile operators GSMA Intelligence is the definitive source of global mobile worldwide, uniting more than 750 operators with nearly operator data, analysis and forecasts, and publisher of 400 companies in the broader mobile ecosystem, authoritative industry reports and research. Our data including handset and device makers, software companies, covers every operator group, network and MVNO in every equipment providers and internet companies, as well as country worldwide – from Afghanistan to Zimbabwe. It is organisations in adjacent industry sectors. The GSMA also the most accurate and complete set of industry metrics produces the industry-leading MWC events held annually in available, comprising tens of millions of individual data Barcelona, Los Angeles and Shanghai, as well as the Mobile points, updated daily. GSMA Intelligence is relied on by 360 Series of regional conferences. leading operators, vendors, regulators, financial institutions and third-party industry players, to support strategic For more information, please visit the GSMA corporate decision-making and long-term investment planning. The website at www.gsma.com data is used as an industry reference point and is frequently cited by the media and by the industry itself. Our team Follow the GSMA on Twitter: @GSMA of analysts and experts produce regular thought-leading research reports across a range of industry topics. www.gsmaintelligence.com [email protected] Contents EXECUTIVE SUMMARY 2 1 THE MOBILE MARKET IN NUMBERS 7 1.1 345 million subscribers in North America by 2025 8 1.2 North America will be a leader in 5G adoption 9 1.3 Growth in digital consumers 12 1.4 A modest financial outlook as 5G investment gathers steam 14 2 MOBILE CONTRIBUTING TO ECONOMIC GROWTH 16 AND ADDRESSING SOCIAL CHALLENGES 2.1 Mobile’s contribution to economic growth 17 2.2 Mobile technology and climate change 20 3 KEY TRENDS SHAPING THE MOBILE ECOSYSTEM 22 3.1 5G is here: expectations versus reality 23 3.2 IoT: beyond connectivity 27 3.3 Edge computing: enabling 5G 31 3.4 Mobile identity: boosting online security 34 4 POLICY SPURRING INVESTMENT AND PROTECTING 38 CONSUMERS 4.1 Laying the regulatory groundwork for 5G 39 4.2 Halting the surge in robocalling with operator-led initiatives 40 The Mobile Economy North America 2019 Executive Summary North America will be a 5G leader, bolstered by significant operator investment Following commercial launches by the four 2019 will be the first year when 5G accounts largest US mobile operators, 5G is now a for more than half of operators’ capex in reality. As coverage expands across the US, North America, reflecting the shift from LTE and with Canada expecting to deploy 5G to 5G deployments. This trend will continue in 2020, 5G adoption is expected to rapidly through 2020-2025, with 87% of operator gather pace in North America. By the end of capex in North America to be allocated to 5G 2022, 24% of connections on the continent by the end of the period. Between 2018 and will be on 5G networks, rising to 46% by 2025 2025, mobile operators will invest $353 billion – equivalent to 200 million 5G connections. in capex in the US, more than in any other country. North America: the global benchmark for mobile revenue and adoption High subscriber penetration coupled with North America also has the highest levels of historically high consumer spend on mobile mobile broadband and smartphone adoption services means the North American mobile globally. Moreover, it has some of the market will be worth $280 billion in revenue strongest levels of mobile engagement across in 2019. In this context, the US is the largest a plethora of use cases, underpinned by rapid market for mobile worldwide – around 50% 4G adoption, which accounted for more than greater than China. 75% of total connections in Q2 2019. Mobile contribution to North America’s economy will reach $1.2 trillion by 2023 In 2018, mobile technologies and services almost $123 billion raised through taxation. generated 4.2% of GDP in North America, By 2023, mobile’s contribution to the North which amounted to $937 billion of economic American economy will reach almost $1.2 value added. The mobile ecosystem also trillion (4.8% of GDP) as the US and Canada supported 2.3 million jobs (directly and increasingly benefit from improvements in indirectly) and made substantial contributions productivity and efficiency brought about by to the funding of the public sector, with the increased uptake of mobile services. 2 Executive Summary The Mobile Economy North America 2019 Opportunities in the 5G era The main opportunities to capture Initial enterprise 5G deployments are likely incremental revenue are 5G-based fixed to focus on faster data speeds and enhanced wireless access (FWA) and 5G-based services capacity. The release of new standards will targeted at enterprises. 5G FWA rollouts are then introduce additional 5G features, such underway in select US cities and will gain as ultra-reliable low-latency communications traction as more operators deploy 5G as an (URLLC), to support further enterprise alternative to fixed broadband connectivity. applications. Enabling policies for 5G leadership A key priority of the Federal Communications Infrastructure policy review is another part Commission’s (FCC) strategy under its 5G of the 5G FAST Plan. Given 5G’s need for FAST Plan (Facilitate America’s Superiority network densification, operators require in 5G Technology) is to make additional access to public sites (e.g. buildings and street spectrum available for 5G services. The US lights) to deploy network equipment such as has been quick to allocate high-frequency small cells, which are expected to be widely spectrum bands for 5G networks; however, utilised in 5G rollouts. operators also need timely and sufficient availability of spectrum in mid-range bands for 5G to realise its full potential. Executive Summary 3 Smartphone adoption 4G adoption (% of total connections) (% of connections)* 2018 82% 2025 North America 2025 90% 2018 74% Internet of Things connections 4G Unique Mobile mobile internet subscribers users 2.3bn 2018 45% 2018 2018 5G connections in 2025 (46% of total connections)* 200m 5.9bn 2025 321m 282m *Excluding licensed cellular IoT PENETRATION RATE PENETRATION RATE CAGR CAGR 83% (% of population) 85% (% of population) 80% 2018–25 73% 2018–25 Mobile 4.2% $937bn 2018 industry of GDP 1.0% 2.1% contribution to GDP 4.8% 345m2025 326m2025 $1.2tn 2023 SIM Operator revenues Public funding Employment 2018 connections and investment Mobile ecosystem contribution to public funding (before regulatory Excluding licensed cellular IoT Total revenues and spectrum fees) 2018 2018 2018 $272bn 820,000 400m 2025 PENETRATION RATE 103% (% of population) 108% CAGR 2018–25 Jobs $123bn directly supported by 1.3% $317bn the mobile ecosystem Operator capex of $384 billion 438m for the period 2018-2025 Plus 1.5m indirect jobs 2025 Smartphone adoption 4G adoption (% of total connections) (% of connections)* 2018 82% 2025 North America 2025 90% 2018 74% Internet of Things connections 4G Unique Mobile mobile internet subscribers users 2.3bn 2018 45% 2018 2018 5G connections in 2025 (46% of total connections)* 200m 5.9bn 2025 321m 282m *Excluding licensed cellular IoT PENETRATION RATE PENETRATION RATE CAGR CAGR 83% (% of population) 85% (% of population) 80% 2018–25 73% 2018–25 Mobile 4.2% $937bn 2018 industry of GDP 1.0% 2.1% contribution to GDP 4.8% 345m2025 326m2025 $1.2tn 2023 SIM Operator revenues Public funding Employment 2018 connections and investment Mobile ecosystem contribution to public funding (before regulatory Excluding licensed cellular IoT Total revenues and spectrum fees) 2018 2018 2018 $272bn 820,000 400m 2025 PENETRATION RATE 103% (% of population) 108% CAGR 2018–25 Jobs $123bn directly supported by 1.3% $317bn the mobile ecosystem Operator capex of $384 billion 438m for the period 2018-2025 Plus 1.5m indirect jobs 2025 The Mobile Economy North America 2019 US TECHNOLOGY MIX SUBSCRIBER PENETRATION 50% 1%4% 2025 2018 2025 5G 77% 6% 2G 85% 86% 17% 2018 SMARTPHONE ADOPTION 2018 2025 83% 92% 4G 45% 3G Canada TECHNOLOGY MIX SUBSCRIBER PENETRATION 42% 1% 2025 2018 2025 8% 5G 2G 74% 3% 78% 82% 2018 23% SMARTPHONE ADOPTION 2018 2025 81% 49% 78% 4G 3G Caribbean TECHNOLOGY MIX SUBSCRIBER PENETRATION 35% 2025 2018 2025 11% 9% 2G 45% 66% 72% 2018 SMARTPHONE ADOPTION 2018 2025 46% 54% 56% 72% 4G 3G Defining the Caribbean Countries included: Anguilla; Antigua and Barbuda; Aruba; Bahamas; Barbados; Bermuda; Cayman Islands; Curacao; Dominica; Grenada; Guadeloupe; Haiti; Jamaica; Martinique; Montserrat; Puerto Rico; Saint Kitts and Nevis; Saint Lucia; Saint Pierre and Miquelon; Saint Vincent and the Grenadines; Trinidad and Tobago; Turks and Caicos Islands; British Virgin Islands; US Virgin Islands 6 Executive Summary The Mobile Economy North America 2019 01 The mobile market in numbers The mobile market in numbers 7 The Mobile Economy North America 2019 1.1 345 million subscribers in North America by 2025 Figure 1 Source: GSMA Intelligence Subscriber growth continues to slow, but there will still be almost 25 million new subscribers by 2025 Million 85% 83% 345 321 17 15 32 29 297 278 2018 2019 2020 2021 2022 2023 2024 2025 US Canada Caribbean Total subscribers Penetration of population Figure 2 Source: GSMA Intelligence Over a quarter of global mobile revenue stems from North America North America’s share of
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