Increasing 3G Penetration To Fuel up Global Economy: 10% Expansion Of 3G Increases 0.15% GDP Per Capita

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As number of smartphones and tablets is increasing, like wise, mobile data consumption is also mounting up day-over-day. This is the reason of growing plunge of 3G penetration across the world. Mobile telephony has given rise opportunities for mobile hardware manufactures and carriers to generate hoard of cash. however the participation of mobile telephony over global economy cannot be ignored, though its currently going through rough patches.

Apparently, 3G technology and mobile data services are now playing remarkable role over global economy. According to a recent report, jointly framed by Deloitte and Cisco Systems, the development of data services around the world has boosted the global economy. However,until two years before, voice services played more significant role to the global economy compare to data services. Now, the scenario is changing, and mobile subscribers are more likely to adopt 3G networks in forthcoming years in comparision to 2G.

Interestingly, the report has stated that doubling of mobile data consumption has managed to surge GDP per capita by 0.5% points in the 14 countries. And it’s quite worthy to know that countries with a higher level of data usage per 3G connection have reported a growth of 1.4% points in their GDP per capita. On the other side, a 10% rise from 2G to 3G penetration has stimulated global GDP per capita growth by 0.15%, while in developing market, 10% expansion (rise from 2G to 3G connections) has increased the productivity by 4.2% points.

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More importantly, total mobile connections is expected to hit 6.8 billion figure by end of this year, and penetration (in terms of mobile subscribers) will reach 45% milestone. In addition to these, total mobile data usage has increased more than two folds in 96 countries (in the sample) on average every year between 2005 to 2010. However, the growth of mobile data consumption in western European countries grew up by 350% during the  same period.

The mobile data consumption is impressive in those countries where the average level of mobile data consumption per 3G connection is comparatively high. Few matured markets such as Russia, South Korea and UK have been characterized as countries where average mobile data consumption per 3G connection is higher, and this is the reason why they have seen 1.4% points of GDP per Capita growth. However, the GDP per capita is still quite low in emerging countries like China, India, Mexico and South Africa due to low prevalence of data consumption.

In developing countries, voice services are still playing considerable role to deliver strong benefits to telecom vendors compare to data driven services. However, penetration of 3G connection in developing countries such as China and India is increasing with dizzying pace.  India and China recorded an average 841% and 115% Y/Y growth respectively in 3G subscriber base between 2008 and 2011 .

It’s pretty clear that data services are going to play more important role towards global economy in forthcoming years compared to voice services. In context of average revenue per user (ARPU), 3G services are more lucrative for telecom vendors in terms of revenue generation.

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