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North American Mobile Sector to Contribute US $1 Trillion to Economy

North American Mobile Sector to Contribute US $1 Trillion to Economy

North America’s mobile industry will contribute almost 4.5 percent per year, or US $1 trillion, to the region’s economy by 2020, according to a study from GSMA, which took into account 5G, the IoT, smart cities and connected cars. The previous year, the mobile industry accounted for 3.6 percent (US $710 billion) of North America’s GDP. The region had 284 million unique mobile subscribers at the end of 2015 (79 percent of the population), a figure set to increase to 315 million (85 percent) by 2020. Smartphones made up 75 percent of the region’s mobile connections—the highest smartphone adoption rate globally—with over half the connections running on 4G/LTE networks. There were more than 60 million mobile M2M connections in the region at the end of 2015, accounting for nearly 15 percent of total mobile connections. That figure is forecast to account for 30 percent by 2020. GSMA expects video streaming over 4G networks to account for more than three quarters of data consumption by 2020. Cisco projects that by the end of the decade, data usage per subscriber in North America will reach almost 9 GB per month, up from about 2 GB per subscriber per month in 2015.

Tarifica’s Take

Not only is the mobile industry now accounting for a very large percentage of the economy’s size in the developed market of North America, but the increase of its share in the past year has been significant. And it should be noted that this is despite the much-discussed commoditization of traditional mobile services and declining revenues from them. The trend in the other direction is increasing revenue from new services such as IoT, uptake of which is a major driver of the increase of the mobile market’s contribution to the GDP. It is also worth mentioning that the sheer quantity of data consumed, especially for entertainment purposes by consumers is an important factor in the growth.