The Economic Impact of Next-Generation Mobile Services: How 3G Connections and the Use of Mobile Data Impact GDP Growth

CHRIS WILLIAMS DAVIDE STRUSANI DAVID VINCENT DAVID KOVO Deloitte LLP Mobile communication services have become an essential part of how economies work and function, and the mobile telecommunication sector continues to offer unprecedented opportunities for economic growth in both developing and developed markets. A series of studies have found a link between mobile penetration and economic growth.1 Mobile phones have improved communication, enhanced social inclusion, and expanded economic activity and productivity in sectors such as agriculture, healthcare, education, and finance. Against this backdrop, Deloitte and the GSM Association (GSMA) have performed a comprehensive and up-to-date analysis of the role that basic mobile phone services play in generating economic growth.2 The study concludes that, in developing markets, increases in mobile penetration benefit gross domestic product (GDP) growth per capita and boost country productivity. As technology develops, mobile services have the potential of impacting a country’s economy by providing high-value 3G and 4G data services that are accessed via smartphones, tablets, and dongles that deliver mobile data services to businesses and consumers. The relationship among economic growth, 3G telephony, and mobile data use has not yet been explicitly explored; this chapter seeks to address this gap. The chapter presents the first study of (1) the impact on GDP per capita growth of consumers substituting a 3G connection for a 2G connection, and (2) the impact of increasing the usage of mobile data per 3G connection, based on data from Cisco Systems. The details of the econometric analysis conducted are reported in more detail in a 2012 report prepared by Deloitte for the GSMA.3