CONTENTS CHAIRMAN’S MESSAGE DIRECTOR GENERAL’S REPORT GOVERNANCE BOARD REPORT CONTACT DETAILS Annual Report 2016 CONTENTS CHAIRMAN’S MESSAGE About the GSMA The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with almost 300 DIRECTOR GENERAL’S REPORT companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA GOVERNANCE also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai and the Mobile 360 Series conferences. BOARD REPORT For more information, please visit the GSMA corporate website at www.gsma.com Follow the GSMA on Twitter: @GSMA CONTACT DETAILS GSMA ANNUAL REPORT 2016 CONTENTS CHAIRMAN’S MESSAGE DIRECTOR GENERAL’S REPORT GOVERNANCE Contents BOARD REPORT CHAIRMAN’S MESSAGE 2 DIRECTOR GENERAL’S REPORT 6 CONTACT DETAILS GOVERNANCE 10 BOARD REPORT 16 MEMBERS OPERATIONAL OVERVIEW INDUSTRY PROGRAMMES INDUSTRY ADVOCACY INITIATIVES CONVENING AND MAINTAINING THE ECOSYSTEM FINANCIAL INFORMATION 68 CONTACT DETAILS 74 GSMA ANNUAL REPORT 2016 CONTENTS CHAIRMAN’S MESSAGE DIRECTOR GENERAL’S REPORT GOVERNANCE BOARD REPORT CONTACT DETAILS Chairman’s Message Our industry is committed to connecting everyone and everything to a better future. Globally, there are now more than 4.7 billion1 individual users of mobile services of which 3.4 billion are using their devices to access the internet. This represents almost two-thirds of the world’s population and this figure is set to climb to 5.6 billion people in 2020. That means nearly three-quarters of the world’s population will be connected to a mobile network by the end of this decade. In the next decade, the challenge will be to connect mainly rural, low-income populations, which will require collaboration between operators, governments and other ecosystem players to overcome the significant physical, social and economic barriers to serving these communities. In short, our challenge is to connect everyone. 1. All figures quoted are as of the end of Q2 2016 Chairman’s Message | 2 GSMA ANNUAL REPORT 2016 CONTENTS CHAIRMAN’S MESSAGE Dear Members, DIRECTOR GENERAL’S REPORT In addition to providing vital communications handsets and attractive services, all at affordable services, mobile networks are enabling billions of prices. This development will have a profound socio- people to access the internet, with mobile as the economic impact across the globe. dominant platform for internet access in many parts However, we must not rest on these laurels. Four GOVERNANCE of the world, including South Asia, Sub-Saharan Africa and Latin America. More than 3.4 billion years from now, many middle-income markets that people globally are now accessing the internet have been key engines of customer growth – notably through mobile devices, and more than two-thirds of China and Brazil – could be approaching saturation these individuals are in the developing world. point. Further customer growth will depend on BOARD REPORT the industry improving the affordability of mobile By 2020, an additional 1.3 billion people worldwide services, extending network coverage to rural areas, are set to gain access to the internet via mobile delivering locally relevant content and raising digital networks, bringing the total to 4.7 billion – 60 per skills and literacy. CONTACT DETAILS cent of the global population. Three vital factors will contribute to this remarkable achievement: the availability of high-quality networks, capable Enabling the Internet of Things In the 25 years since the launch of the first 2G owners. A huge opportunity for mobile operators, network and the first mobile phone call, mobile has their partners and their customers, the “Internet of changed the way billions of people in the world Things” represents an addressable – and growing – communicate and interact. Now we are entering market that could reach US$1.1 trillion by 2020 . a new phase, in which mobile connectivity will transform entire industries, from automotive to More and more cars, for example, are now equipped healthcare to financial services to utilities and with connectivity, which enables a wide range beyond. The world is going digital and this is enabled of services from navigation to entertainment to by our industry. automatic emergency calls in the event of an accident. Gartner Research has forecast that one in Employing specifications developed by the GSMA, five vehicles will have some form of wireless network mobile networks are now enabling a myriad of connection by 2020, equating to more than 250 appliances, machines and vehicles to get online and million connected vehicles in service. exchange information with each other and their Chairman’s Message | 3 GSMA ANNUAL REPORT 2016 CONTENTS Mobile broadband goes global CHAIRMAN’S MESSAGE Many consumer and enterprise applications require In response, mobile operators and players across the the fast, responsive connectivity provided by the ecosystem are developing 5G mobile technologies, latest generations of mobile technology. Now a truly which offer enormous potential for both consumers global phenomenon, mobile broadband is extending and industry. In addition to being considerably faster DIRECTOR GENERAL’S REPORT high-speed connectivity and services to citizens in all than existing technologies, 5G holds the promise corners of the world; at the end of 2015, there were of applications with high social and economic 462 4G networks live in 156 countries, with almost value, leading to a ‘hyper-connected society’. We half of these in the developing world. The number see 5G being used for an array of exciting new use GOVERNANCE of 4G (LTE) mobile connections worldwide has cases, such as immersive internet services, ground- surpassed one billion, after doubling in 2015, largely breaking augmented reality and low-latency remote as a result of growth in developing markets. activities, including highly advanced applications, such as remote surgery. The GSMA’s members are We forecast 4G will account for more than a third of working hard to make 5G a reality, with some looking BOARD REPORT the almost 9 billion mobile connections (excluding to launch commercial services as early as 2018. cellular M2M2) in 2020. In fact, the accelerating technology shift to mobile broadband networks As new digital services continue to develop on across both developed and developing markets is mobile platforms, operators worldwide must ensure CONTACT DETAILS fuelling digital innovation, smartphone adoption and that they support customers in becoming ‘digital mobile data growth. natives’ by delivering secure and seamless services from end to end. The GSMA Mobile Connect service Smartphones accounted for 45 per cent of mobile provides this critical capability, enabling consumers connections in 2015, up from just 8 per cent in to easily authenticate and verify their online activity. 2010. The industry is set to add a further 2.5 billion Mobile operators have already extended this service smartphone connections over the next five years, to 2.8 billion users globally and we are focused on and with this, mobile data volumes are expected to broadening the reach of Mobile Connect in the year grow exponentially. to come. Investing in economic growth The unprecedented growth in mobile broadband last mobile industry added $3.1 trillion to the world year is testament to the billions of dollars that mobile economy last year, equivalent to 4.2 per cent operators have invested in next-generation networks, of global GDP, and also directly and indirectly services and spectrum in recent years. In aggregate, supported 32 million jobs in 2015 (forecast to rise to mobile operators are set to invest a further $900 36 million jobs in 2020). The industry contributed billion in capital equipment over the next five years, $430 billion to public funding in the form of various as they roll out faster and denser networks. types of taxation, a figure that does not include the additional spectrum fees and licensing paid by That investment is part of a much larger economic mobile operators. contribution. The GSMA has calculated that the 2. Machine to Machine Chairman’s Message | 4 GSMA ANNUAL REPORT 2016 CONTENTS New opportunities and challenges CHAIRMAN’S MESSAGE To justify the large sums being spent on network With the right support, the mobile industry can infrastructure and spectrum licenses, mobile sustainably connect everyone and everything to operators need to evolve and broaden their business a better future. We are fully committed to helping models and invest in new technologies, services achieve the United Nations Sustainable Development DIRECTOR GENERAL’S REPORT and digital ecosystems. Operators worldwide must Goals; mobile networks can contribute in addressing ensure that they capitalise on the opportunities social and developmental challenges in a way no presented by the vast and growing ecosystem that other technology can. Working across the private nearly universal global mobile coverage has created. and public sectors, we are focused on building a GOVERNANCE healthy and vibrant mobile economy: The health and By providing access to life-enhancing as well as vitality of our planet increasingly depends on it. life-changing services to billions of people globally, mobile networks are creating immense value for I would like to close on a personal note. In 2015, Anne individuals, businesses and communities