Copyright © 2019 GSM Association The Mobile Economy North America 2019The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators with nearly 400 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces the industry-leading MWC events held annually in Barcelona, Los Angeles and Shanghai, as well as the Mobile 360 Series of regional conferences.For more information, please visit the GSMA corporate website at gsma Follow the GSMA on Twitter: GSMA GSMA Intelligence is the definitive source of global mobile operator data, analysis and forecasts, and publisher of authoritative industry reports and research. Our data covers every operator group, network and MVNO in every country worldwide from Afghanistan to Zimbabwe. It is the most accurate and complete set of industry metrics available, comprising tens of millions of individual data points, updated daily. GSMA Intelligence is relied on by leading operators, vendors, regulators, financial institutions and third-party industry players, to support strategic decision-making and long-term investment planning. The data is used as an industry reference point and is frequently cited by the media and by the industry itself. Our team of analysts and experts produce regular thought-leading research reports across a range of industry topics. gsmaintelligence infogsmaintelligenceContents EXECUTIVE SUMMARY 2 1 THE MOBILE MARKET IN NUMBERS 7 1.1 345 million subscribers in North America by 2025 8 1.2 North America will be a leader in 5G adoption 9 1.3 Growth in digital consumers 12 1.4 A modest financial outlook as 5G investment gathers steam 14 2 MOBILE CONTRIBUTING TO ECONOMIC GROWTH AND ADDRESSING SOCIAL CHALLENGES 16 2.1 Mobiles contribution to economic growth 17 2.2 Mobile technology and climate change 20 3 KEY TRENDS SHAPING THE MOBILE ECOSYSTEM 22 3.1 5G is here: expectations versus reality 23 3.2 IoT: beyond connectivity 27 3.3 Edge computing: enabling 5G 31 3.4 Mobile identity: boosting online security 34 4 POLICY SPURRING INVESTMENT AND PROTECTING CONSUMERS 38 4.1 Laying the regulatory groundwork for 5G 39 4.2 Halting the surge in robocalling with operator-led initiatives 40North America will be a 5G leader, bolstered by significant operator investment North America: the global benchmark for mobile revenue and adoption Mobile contribution to North Americas economy will reach $1.2 trillion by 2023 Following commercial launches by the four largest US mobile operators, 5G is now a reality. As coverage expands across the US, and with Canada expecting to deploy 5G in 2020, 5G adoption is expected to rapidly gather pace in North America. By the end of 2022, 24% of connections on the continent will be on 5G networks, rising to 46% by 2025 equivalent to 200 million 5G connections. 2019 will be the first year when 5G accounts for more than half of operators capex in North America, reflecting the shift from LTE to 5G deployments. This trend will continue through 2020-2025, with 87% of operator capex in North America to be allocated to 5G by the end of the period. Between 2018 and 2025, mobile operators will invest $353 billion in capex in the US, more than in any other country. High subscriber penetration coupled with historically high consumer spend on mobile services means the North American mobile market will be worth $280 billion in revenue in 2019. In this context, the US is the largest market for mobile worldwide around 50% greater than China. North America also has the highest levels of mobile broadband and smartphone adoption globally. Moreover, it has some of the strongest levels of mobile engagement across a plethora of use cases, underpinned by rapid 4G adoption, which accounted for more than 75% of total connections in Q2 2019. In 2018, mobile technologies and services generated 4.2% of GDP in North America, which amounted to $937 billion of economic value added. The mobile ecosystem also supported 2.3 million jobs (directly and indirectly) and made substantial contributions to the funding of the public sector, with almost $123 billion raised through taxation. By 2023, mobiles contribution to the North American economy will reach almost $1.2 trillion (4.8% of GDP) as the US and Canada increasingly benefit from improvements in productivity and efficiency brought about by the increased uptake of mobile services. Executive Summary The Mobile Economy North America 2019 Executive Summary 2Opportunities in the 5G era The main opportunities to capture incremental revenue are 5G-based fixed wireless access (FWA) and 5G-based services targeted at enterprises. 5G FWA rollouts are underway in select US cities and will gain traction as more operators deploy 5G as an alternative to fixed broadband connectivity. Initial enterprise 5G deployments are likely to focus on faster data speeds and enhanced capacity. The release of new standards will then introduce additional 5G features, such as ultra-reliable low-latency communications (URLLC), to support further enterprise applications. A key priority of the Federal Communications Commissions (FCC) strategy under its 5G FAST Plan (Facilitate Americas Superiority in 5G Technology) is to make additional spectrum available for 5G services. The US has been quick to allocate high-frequency spectrum bands for 5G networks; however, operators also need timely and sufficient availability of spectrum in mid-range bands for 5G to realise its full potential. Infrastructure policy review is another part of the 5G FAST Plan. Given 5Gs need for network densification, operators require access to public sites (e.g. buildings and street lights) to deploy network equipment such as small cells, which are expected to be widely utilised in 5G rollouts. Enabling policies for 5G leadership The Mobile Economy North America 2019 Executive Summary 3 937 M GD 08 03 Uq SIM Ov v 400 3 34 M 8 36 TR TIO R T 08 08 08 08 08 0 0 7 37 C GR 08 C GR 08 TR TIO R T 438 0 0 C GR 08 Ox384 08-0 GD TR TIO R T 08 3 G0 00 0 08 74% 4G 08 08 9 0 0 90% 8% 4% Tv 937 M GD 08 03 Uq SIM Ov v 400 3 34 M 8 36 TR TIO R T 08 08 08 08 08 0 0 7 37 C GR 08 C GR 08 TR TIO R T 438 0 0 C GR 08 Ox384 08-0 GD TR TIO R T 08 3 G0 00 0 08 74% 4G 08 08 9 0 0 90% 8% 4% Tv72% 72% 2018 2018 2025 2025 66% 56% SMARTPHONE ADOPTION SUBSCRIBER PENETRATION TECHNOLOGY MIX Caribbean 2025 45% 46% 9% 54% 11% 35% 2018 US TECHNOLOGY MIX 92% 86% 2018 2018 2025 2025 85% 83% SMARTPHONE ADOPTION SUBSCRIBER PENETRATION 4G 5G 2G 3G 2025 2018 77% 6% 17% 50% 1% 4% 45% Canada 81% 82% 2018 2018 2025 2025 78% 78% SMARTPHONE ADOPTION SUBSCRIBER PENETRATION TECHNOLOGY MIX 2025 74% 3% 23% 42% 8% 49% 1% 2018 Defining the Caribbean Countries included: Anguilla; Antigua and Barbuda; Aruba; Bahamas; Barbados; Bermuda; Cayman Islands; Curacao; Dominica; Grenada; Guadeloupe; Haiti; Jamaica; Martinique; Montserrat; Puerto Rico; Saint Kitts and Nevis; Saint Lucia; Saint Pierre and Miquelon; Saint Vincent and the Grenadines; Trinidad and Tobago; Turks and Caicos Islands; British Virgin Islands; US Virgin Islands 4G 5G 2G 3G 4G 2G 3G The Mobile Economy North America 2019 Executive Summary 601 The mobile market in numbers The mobile market in numbers 7 The Mobile Economy North America 2019Subscriber growth continues to slow, but there will still be almost 25 million new subscribers by 2025 Figure 1 Source: GSMA Intelligence 1.1 345 million subscribers in North America by 2025 Million North Americas share of the global mobile industry Canada 2018 US 2025 Caribbean Total subscribers Penetration of population Over a quarter of global mobile revenue stems from North America Source: GSMA Intelligence Figure 2 278 297 15 321 17 345 32 29 Revenue Subscribers 4G connections* 5G connections* Smartphone connections 2018 2019 2020 2021 2022 2023 2024 2025 83% 85% *Excluding licensed cellular IoT 28% 6% 4% 13% 5% 26% 6% 9% 7% The mobile market in numbers 8 The Mobile Economy North America 20194G to remain the dominant technology in North America until 2025, when 5G connections will surpass 4G connections Figure 3 Source: GSMA Intelligence 1.2 North America will be a leader in 5G adoption % of connections Migration to 4G and 5G networks accelerates, as legacy network shutdown continues Some operators in North America have already begun to shut down 2G and 3G networks to refarm spectrum and provide additional data capacity on 4G networks. This trend will continue as operators in the region deploy 5G networks using a mix of low-, medium- and high-band spectrum. As legacy networks shut down, circuit-switched voice networks will be upgraded to all-IP core networks using voice over LTE (VoLTE) technology. 14% 24% 4% 46% 33% 40% 79% 60% 77% 74% 67% 63% 50% 71% 45% 56% 7% 15% 14% 23% 28% 19% 11% 8% 9% 10% 12% 5% 5% 7% 10% 4% 3% 2% 2% 2% 2G 5G 3G 4G 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1% The mobile market in numbers 9 The Mobile Economy North America 20195G coverage will grow quickly, laying the foundations for strong 5G uptake in North America The US is vying for global 5G leadership with China, Japan and South Korea Source: GSMA Intelligence Source: GSMA Intelligence Figure 4 Figure 5 Connections (million) 5G as a percentage of total connections 2019 2018 2020 2021 2022 2023 2024 2025 250 200 150 100 50 0 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 46% 83% 5G connections (million) US 5G population coverage (%) Canada 5G adoption (% of total connections) China, Japan and South Korea Europe 30% 50% 50% 42% 2019 2018 2020 2021 2022 2023 2024 2025 The mobile market in numbers 10 The Mobile Economy North America 2019IoT will benefit from enhanced 5G capabilities, with 3.6 billion additional IoT connections expected in North America by 2025 Source: GSMA Intelligence Figure 6 Connections (billion) Consumer (others) includes trackers for children, the elderly and pets, as well as drones and robots Enterprise (others) includes fleet management and applications in agriculture, oil, mining and construction 5G in Canada and the Caribbean Mobile operators in Canada are making significant progress towards bringing 5G services to the country. For instance, Telus has undertaken 5G trials using mid- and high-band spectrum and plans to launch 5G in September 2020. Though Bell and Rogers have yet to formally announce launch dates, both operators undertook 5G network trials in 2019. In the Caribbean, Flow (Liberty Latin America) recently conducted 5G trials in Antigua and Barbuda, while SFR (Outremer Telecom) began trials in Guadeloupe and Martinique. However, 5G is a longer- term technology for the region, as the 4G investment cycle is ongoing and consumer adoption is still in the early stages. Consequently, the majority of the Caribbeans 5G launches are not expected until the middle of the next decade, after significant improvements in device and infrastructure economies of scale. ENTERPRISE CONSUMER 2018 Smart home Consumer electronics Smart vehicles Wearables Consumer (others) Smart buildings Smart utilities Smart city Smart manufacturing Smart retail Health Enterprise (others) 2025 2.3 0.7 0.2 0.1 0.1 0.1 1.4 0.3 0.1 0.2 0.1 0.0 0.3 5.9 The mobile market in numbers 11 The Mobile Economy North America 20191.3 Growth in digital consumers Consumer engagement is rising across almost all smartphone activities in the US, fuelled by enhanced networks and unlimited price plans Source: GSMA Intelligence Consumer Insights Survey 2018 Figure 7 % of US smartphone users engaging with certain use cases each month Traditional communications Mobile internet communications Social networking Internet Apps Navigation Entertainment Digital commerce Financial services 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2017 2018 The mobile market in numbers 12 The Mobile Economy North America 2019Higher levels of consumer engagement will propel mobile data traffic in North America, highlighting the need for additional capacity provided by 5G networks Source: Ericsson, GSMA Intelligence Figure 8 Mobile data traffic (GB per subscriber per month) Rogers goes unlimited, causing a surge in customer data usage In June 2019, Rogers became the first national mobile operator in Canada to offer an unlimited LTE service plan. Rogers stated that after six weeks, data usage among unlimited customers had increased by 50%, with 365,000 customers (around 3% of its total subscriber base) on the new plans. Bell and Telus have already responded by launching their own unlimited price plans, while smaller regional players (including SaskTel and Freedom Mobile) have ramped up marketing efforts on their unlimited data plans following the moves by national operators. 55.6 10.0 5.6x 2024 2018 The mobile market in numbers 13 The Mobile Economy North America 20191.4 A modest financial outlook as 5G investment gathers steam Following a period of intense competition, revenue growth recovered in 2018, driven by increased uptake of higher-value unlimited plans in the US Source: GSMA Intelligence Figure 9 Billion 2016 2017 201