The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact

The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact

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The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact

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  • Connecting and Empowering Consumers

    The biggest winners in mobile are consumers. The global adoption rate of mobile devices has been spectacular, driven by steady technology improvements and lower costs. Mobile devices provide ubiquitous connectivity and an array of applications and services that impact almost every facet of life. Further, in emerging economies, mobile is often the first point of access to the Internet, and therefore opens up a huge range of activities that were previously inaccessible.

    Today, nearly half the world’s population subscribes to a mobile service, according to GSMA. While approximately 60 percent of users still have basic 2G connections, by 2020, there will be approximately 2.3 billion 4G connections (25 percent of all mobile connections at that time), dramatically increasing the range of services and value provided to consumers around the world.

    To better understand how much value consumers derive from mobile technologies and how they use these technologies, we surveyed approximately 7,500 consumers in the U.S., Germany, South Korea, Brazil, China, and India as part of the research for this report. We used a sophisticated approach to ascertaining the true value that mobile creates independent of what consumers currently pay for devices and connectivity. (See our detailed survey methodology in the appendix.)

    Our research shows that mobile technologies are creating immense value for consumers—value that greatly exceeds the cost of owning a mobile device. Consumers worldwide value mobile technologies at 11 to 45 percent of their income—well above what they pay for the service. (See Exhibit 9.)

    The Value Consumers Place on Mobile Technologies

    The ways that consumers use mobile technologies vary considerably in developed versus emerging economies. In developed markets, the ubiquitous connectivity makes users’ lives easier through services such as mobile banking, GPS-based mapping, and crowdsourced recommendation apps. With breakthroughs in capacity and data rates, a booming ecosystem of mobile apps has emerged to save consumers time and money while they are on the move. (See Exhibit 10.) Consumers in developed markets value mobile technologies at upward of $6,000 per year, or approximately 12 percent of their income.


    In emerging markets, the numbers tell an even more powerful story. Chinese consumers for example, value mobile at approximately 45 percent of their income. For many consumers in emerging markets, mobile phones are their only “connected” device. It provides the chance to live healthier lives, access educational resources, earn a higher income, and create better living conditions. In China, more than half of consumers reported that mobile technologies make them more productive at work and allow them to pursue entrepreneurial activities.

    Mobile technologies have become a basic necessity for many consumers. This can be seen in the trade-offs consumers would accept to keep their mobile phones. The majority of people surveyed were willing to give up luxuries (such as dining out or going on vacation) for a year in order to keep their mobile phone. In China and South Korea, a majority of users would give up a subscription to home broadband Internet rather than go without a mobile phone. (See Exhibit 11.)


    The benefit consumers receive from mobile technologies can be more fully quantified using an economic concept called consumer surplus—that is, the value that consumers themselves receive, over and above what they pay for devices, apps, services, and Internet access. In the six countries evaluated, mobile technologies have created $6.4 trillion of annual consumer surplus, with approximately 65 percent of that value stemming from 3G and 4G capabilities. (See Exhibit 12.)

    • This consumer surplus of $6.4 trillion far exceeds industry revenues across the entire mobile value chain and is greater than the GDP of every country in the world, with the exception of the U.S. and China.
    • If 4G services were rolled out to all existing mobile consumers in the six countries analyzed, we estimate an additional $1.4 trillion in consumer surplus, bringing the surplus to $7.8 trillion.
    Case Studies: Mobile Changes Lives in Emerging Markets

    The following two brief case studies show the benefits that mobile devices deliver across the globe, by empowering women to fight back against violence and improving overall health and well-being.

    Fighting Back Against Violence. In India, an app called FightBack allows women to send out a security alert to friends, relatives, and emergency services when they feel threatened or endangered. With the push of a panic button on the smartphone app, an SOS alert is triggered and sent out to a predefined list of six emergency contacts. This instant alert continuously pinpoints the user’s exact location through GPS tracking.

    Beyond its immediate benefit of helping to protect women who are exposed to violence, the app also has far-reaching effects within the broader community. For example, it provides an interactive map of all locations in which alerts have been issued. This information has helped police officers to identify “hot spots” where women feel threatened on the streets, and that information has been used to improve safety in these areas.

    Treating Disease and Saving Lives. In emerging economies, mobile health (mHealth)—the use of mobile applications and devices to deliver medical information, access data, or provide clinical services—offers basic health-care services to patients that might otherwise go untreated. According to TechChange, access to mobile technologies is growing much more quickly than access to traditional health care services. People in emerging countries account for 80 percent of worldwide mobile subscriptions, but they have an average doctor-to-patient ratio of 1:250,000; in light of this situation, mHealth represents a new effective way to bring health care to more people.

    Swasthya Samvedana Sena, an initiative in India, uses mobile technologies to improve maternal health. Frontline health-care workers in multiple regions across India use mobile tablets to educate pregnant women and new mothers on a wide range of topics, including women’s health, pregnancy, labor, contraception, government services, postnatal care, and HIV. According to one beneficiary, “Visits by the doctors have now decreased thanks to the education provided by this service.”

    More Innovation Is Needed

    Despite the tremendous impact that mobile has already delivered—or perhaps because of its tremendous impact—businesses and consumers still want more. We found that 90 percent of the 3G and 4G consumers who participated in our survey are eager for advances above and beyond the currently available mobile technology.

    Fundamental innovation is required to boost speed, extend battery life, and strengthen connectivity. More network rollouts are needed to deliver better service to more consumers at lower cost. The next generation of technologies cannot get here fast enough for those who are accustomed to always-on, instant access to everything.

    Core technology improvements and more reliable connections have led users to engage in increasingly data-intensive activities on their mobile devices. This, in turn, places additional strain on capacity. Between 2013 and 2018, global mobile data traffic is expected to increase elevenfold, reaching 15.9 exabytes per month by 2018, according to Cisco. That is three times faster than fixed Internet protocol traffic. Mobile data speed is also expected to increase dramatically.

    Many of these breakthroughs will require continuing up-front investments in R&D by the industry. Our analysis has identified several key enablers that have fostered innovation and investment in the mobile industry, including strong patent protection (in order to incentivize risky, up-front investment in innovation), industry-driven standards (in order to solve complex industry challenges), and the allocation of additional spectrum (in order to keep pace with consumer demand and support the ever-increasing array of new mobile devices, applications, and services).