Mobile broadband investment can save global economy: GSMA

Telecom Asia Staff
17 Feb 2009

Next-gen mobile broadband is a key ticket, if not the ticket, out of the global economic slump, according to a GSM Association panel calling for regulators to develop frameworks and spectrum policies encouraging mobile broadband investment.

Development economist Jeffery Sachs, director of The Earth Institute at Columbia University, said at the Mobile World Congress Monday that the current economic meltdown was shaping up as "the most ferocious recession in recent history", with $35 trillion in paper wealth lost in the last 12-24 months.

He said the mobile industry would play a key role in economic recovery as governments needed to look for new ways to restimulate the economy.

"The mobile sector will be resilient, and will drive important innovation in vital services, energy saving and sustainability," Sachs said at a GSMA press conference.

Sachs' comments echoed previous claims by the GSMA even before the current crisis that mobile investment is a key tool that governments can use to boost their GDPs.

At Monday's press conference, GSMA chief Rob Conway reiterated the industry association's position that governments must create a favorable regulatory environment for mobile operators, especially in light of the current crisis.

"Economists point to infrastructure spend as a way out of this. Mobile broadband in particular can be an engine for growth if governments set the right framework," Conway said. "The mobile industry is one of the few not asking for a bailout. We are best able to withstand the downturn, and the best positioned to offer a way out."

Sachs cautioned that even by the most optimistic standards, "the recovery will not be V-shaped with a dramatic rebound", and that recovery could take years. But he said that emerging markets will "lead the way out of recession this time", with China out in front as its drop in exports would be offset from domestic demand.

China Mobile chairman and CEO Wang Jianzhou said that despite the economic slowdown, his company is still adding around 7 million new subscribers a month, and that more people were using mobile for Internet access and music downloads.

"Now that we have 3G licenses in China, rolling out 3G networks will create 300,000 jobs, directly and indirectly, and will stimulate consumption," he said.

The GSMA's Conway renewed calls for regulators to rethink their spectrum policies to favor mobile - this time citing a new report from Professor Leonard Waverman and LECG that says release of new spectrum for mobile broadband in 2009 would add the equivalent of $211 billion to China's GDP and $95 billion to India's GDP.

Conway urged regulators to grant mobile operators 25% of the 400 MHz of spectrum in the 700 MHz band expected to be freed up by broadcasters around the world moving from analog to digital television.

"Allocating the spectrum to mobile broadband would provide a bigger boost to the economy than giving broadcasters a few more TV channels," he said.

That said, Conway recognized that digital dividend spectrum will be a long time coming in many markets, where analog/digital switchovers aren't scheduled to happen until at least 2011 and in many Asian markets - like China - not until as late as 2015.

"Governments will move at their own time and place, and our operators will work with them to do it in a timely way," he said. "But we're laying out a framework in addition to the digital dividend, to encourage regulatory stability, because investments in mobile are dependent on the regulatory standpoint on these issues."

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