Economic contribution of mobile communication WTO Symposium on Telecommunications Geneva 21 February 2008 Mrs. Harriet E. Berg Vice President Norway Telenor Mobil Sweden Telenor Sweden Denmark Sonofon Hungary Pannon Montenegro Bangladesh Promonte Grameenphone Serbia Thailand Telenor Serbia DTAC Ukraine Pakistan Kyivstar Telenor Pakistan Russia Malaysia VimpelCom DiGi Another 2500 connected Communication for all Individual Businesses Communities Society Social benefits of mobile communications - Health services Bangladesh: 1 physician per 4,000 inhabitants Pakistan: 3 physicians per 4,000 inhabitants Ukraine: 12 physicians per 4,000 inhabitants Methodology – Static analysis Static Analysis Supply - Side Impact Demand - Side Impact Intangible Impact Mobile Direct Operators Related Improved Social Indirect Industries productivity benefits Multiplier General Economy Dynamic Analysis Research and Willingness to Analysis Value Chain interview pay Methodology – Dynamic analysis • Deloitte undertook a regression analysis using a cross-section of developing countries. • They estimate that a 10% increase in penetration could increase the GDP growth rate of a country by 1.2%. 1.2 Ukraine 1 0.8 Malaysia 0.6 Serbia Pa kis ta n 0.4 Penetration rates Penetration 0.2 Bangladesh 0 0 1000 2000 3000 4000 5000 6000 7000 GDP per Capita (US$) Ukraine Pakistan Malaysia 2007 2007 2007 Total GDP Contribution: USD 7.5 bn Total GDP Contribution: USD 5.6 bn Total GDP Contribution: USD 6.6 bn GDP percentage: 5.9% GDP percentage: 5.2% GDP percentage: 5.9% Full time employees: 120,000 Full time employees: 244,000 Full time employees: 51,000 Bangladesh 2007 Total GDP Contribution: USD 3.9 bn GDP percentage: 6.2% Full time employees: 111,700 Thailand 2007 Serbia Total GDP Contribution: USD 13 bn 2007 GDP percentage: 4.7% Full time employees: 150,000 Total GDP Contribution: USD 1.9 bn GDP percentage: 4.1% Full time employees: 34,000 Ukraine Penetration Economic Impact 60,000,000 140% 7% 50,000,000 120% 6% 100% 5% 40,000,000 80% 4% 30,000,000 60% 3% 20,000,000 GDP % of and penetration 40% 2% Subscribers' growth rate rate growth Subscribers' 10,000,000 20% Num ber m connections of obile 1% - 0% 0% 2002 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Mobile connections Penetration Supply side impact Procutivity increases Intangible benefits Results Employment Impact • Exponential growth in the market has 140,000 occurred with growth standing at 70% per 120,000 year on average. 100,000 • The economic impact of the mobile sector in 80,000 2007 was UAH 37bn, 5.9% of GDP. 60,000 40,000 • The mobile industry employs almost 120,000 20,000 Ukrainian full- time employees. 0 2004 2005 2006 2007 Direct Indirect Multiplier Pakistan Penetration Economic Impact 45% 40% 6.0% 35% 5.0% 30% 4.0% 25% 3.0% 20% 2.0% Penetration Rate Penetration 15% 10% 1.0% 5% 0.0% 0% 2004 2005 2006 2007 Supply side impact Productivity increases Intangible benefits Q1 2001 Q1 2001 Q3 2002 Q1 2002 Q3 2003 Q1 2003 Q3 2004 Q1 2004 Q3 2005 Q1 2005 Q3 2006 Q1 2006 Q3 2007 Q1 2007 Q3 Year Results Employment Impact • Penetration has risen dramatically 300,000 since 2006. 250,000 • The mobile communications sector is 200,000 estimated to have contributed 5.2% to 150,000 GDP & employed over 244,000 full- 100,000 time employees in 2007. 50,000 0 2004 2005 2006 2007 Direct Indirect Multiplier New opportunities emerging Mobile broadband Internet New services Access empowers Thank you For a copy of the full report, please contact Ms. Margareth Aske at [email protected].