Mobile Connectivity and its Mighty Effect on Global Economic Growth
I’d like to talk again about how mobile connectivity affects global economic growth — not only from a country’s perspective, but also from an individual’s perspective. The digital divide represents the social and economic gap between those living in countries that have invested in information and communication technologies (ICT), and those living in countries that haven’t.
It’s the difference between industrialized and non-industrialized nations. Depending on where you live, the digital divide can feel like a saving grace or a punch in the gut.
As an entrepreneur, I believe in forging forward regardless of circumstances. However, I’m also keenly aware that living in the United States gives me many more advantages (and tools… like fast mobile broadband) that are not available to those living in countries with less mobile connectivity and speed.
We have no control over where we’re born in the world, yet that one aspect of our existence plays a huge role in our ability to get educated, provide for our families and thrive as individuals and communities.
I’ve written about this topic several times since these technologies began blazing through developed countries. I’m referring to IoT, big data, cloud services and mobile broadband (speed and connectivity).
I always look forward to reading Ericsson’s Mobility Report each time it’s updated. The data in the most recent report inspired me to write about mobile connectivity and its effect on global economic growth once again.
In addition to the updated information about 5G, I was thrilled to see the increased mobile subscriptions (especially in underdeveloped countries) in this newest report. Increased connectivity is life-changing.
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Several months ago, I completed a Digital Dividends course sponsored by World Bank. During that intense class, we were shown a photo of Somalian migrants standing outside, at night, along the border of Djibouti (in the Horn of Africa).
That photo made a powerful imprint in my mind because the migrants were holding their smartphones high in the air, which was odd. Do you know why they were doing that? It was so they could hopefully get mobile connectivity for even just a moment.
Here is a link to the photo, which is owned by National Geographic.
In the United States, we take our internet connectivity for granted. If we lose our connection for an hour, it’s a big deal. Business transactions and commerce come to a screeching halt. Everyone scrambles. We’re confused and unable to relax.
Imagine living in a country where mobile connectivity is a luxury, not an expected service. Try living life in those shoes for one day, and I promise, none of us will take our LTE or 5G connections for granted again.
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Those of us who live in developed countries know that mobile connectivity provides easy communication, not to mention unlimited information at our fingertips. We can get educated on any topic, build an e-commerce website in a few hours, and securely accept payments from all around the world — all with ease.
In developed countries, this is an exciting time. We have the most advanced technology in history resting comfortably in our pockets. Now that 5G adoption is well underway, it’s only going to get better.
Countries as a whole also benefit from widespread mobile connectivity. These benefits are seen in faster economic growth, more jobs and better public services. All of these things promote inclusion and productivity.
Ericsson’s most recent Mobility Report (with Q3 2019 numbers) has a lot of cutting-edge info about 5G, with this being the most powerful:
By the end of 2025, we expect 5G to have 2.6 billion subscriptions covering up to 65 percent of the world’s population and generating 45 percent of the world’s total mobile data traffic, making it the fastest developing mobile communication technology to have ever been rolled out on a global scale.
If 5G’s impact on businesses worldwide has the same effect that we saw with the introduction of 2G, 3G and 4G, we should expect an increase in GDP globally.
I don’t think 5G is just another G though. I think the positive effects of 5G on our society will be on a whole new level. The magnitude of 5G will bring endless new services, new products, new ways of doing business — all of which will greatly increase productivity and drive economic growth now and into the future.
This is all great info, but to me, the most exciting data in Ericsson’s Mobility Report is not about 5G. It’s about mobile connectivity, and I’d like to talk about it in the context of the digital divide.
Let me explain the chart above. The mobile subscription numbers you see are in millions. The numbers in the parentheses represent the net mobile subscriptions for Q3 2019.
For example, in North America, there are currently 385 million mobile subscriptions. The net total of the subscriptions added minus the subscriptions lost during Q3 2019 is 2 million.
I would expect (like this chart shows) the Q3 2019 net number to be lower in developed countries since mobile subscriptions are already high in those places. Those countries have reached a tipping point.
The United States, for example, is using advanced and emerging technologies to develop a smarter, more advanced society. Here, almost everyone has a connected smartphone, even many people living in homeless communities.
What I want to bring to your attention in the graph above are the countries that have typically had low mobile subscriptions in the past. These would be countries that are either in the early stages of digital transformation, or countries that got a late start. These are the nations where mobile connectivity is critical in rural and low-income areas.
On the graph above, those countries are mostly in Africa and the APAC countries. Here is a link to the list of APAC countries.
Also in the chart above, you can see the impressive growth in the Philippines. Although not a standalone country in this chart, the U.K. is also experiencing high growth due to their increased investments in ICT over the past several years.
You’ll also see in the chart that China (always dedicated and unwavering in their ICT strategy) also increased mobile subscriptions dramatically.
China Mobile, the largest mobile operator in China, predicts that by 2025, each person in China will have up to 10 connected devices. Bring on the era of IoT!
Nigeria, Pakistan, Tanzania, Uganda and Ethiopia continue to struggle as low broadband development has left their citizens with little or no mobile connectivity. (the little broadband that is available is not affordable)
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Be sure to read page 25 in the Mobility Report. There’s an interesting strategy “to connect the unconnected” in the Sub-Saharan Africa region. It is focused around the belief that everyone deserves the benefits of a modern connected life, which I wholeheartedly agree with!
This next image below is also an interesting one from the report. It shows the mobile subscription penetration in Q3 2019 as it relates to population size.
According to the report:
Subscriptions associated with smartphones account for more than 70% of all mobile subscriptions.
Mobile subscriptions exceed the population in many countries, which is largely due to inactive subscriptions, multiple device ownership and use of different subscriptions for different types of calls.
Global mobile subscription penetration is at 104%.
104% is a much larger number than I was expecting, and that doesn’t even include IoT devices. There is a section of the report dedicated to IoT (pages 17–19). However, I predict the next time this report is updated, there will be a more dominant section dedicated to the IoT/AI era that is in its infancy now.
The digital divide is still prevalent. In the past several years, experts have said the gap will continue to get larger as the rich get richer and the poor get poorer.
Investment in ICT technologies and infrastructure is critical for developing countries so they can compete in the global economy and become a thriving part of the worldwide digital ecosystem.
The new IoT/AI world we will soon live in is shaping up quickly. The huge potential we have in AI along with the fast rollout of 5G will stimulate economic growth. However, investments in IoT and cloud services are required for the vigorous development of artificial intelligence.
I’m hopeful that as connectivity continues to increase globally, it will begin bridging that gap between the “haves” and “have-nots.” This Mobility Report goes into detail about mobile connectivity subscription forecasts through 2025.
If you’d like to continue the conversation, please drop a comment below or tweet me at @adamsconsulting. This is a topic I’m passionate about, and I welcome your thoughts and opinions. As always, thank you for reading my article.
Sources: Ericsson Mobility Report, GSMA’s Mobile Connectivity Index Disclaimer: This article was sponsored by Ericsson.