The mobile phone sector’s contributions to both the UK GDP and government finances are set to more than double over the next ten years — a report commissioned by operator MMO2 has predicted.
Confirming the importance of the mobile industry to overall economic health and government finances, the report also forecasts that around 56,000 new jobs in the UK will be created by 2013 and that productivity will far out perform the national average.
The report was undertaken by the Centre for Economic and Business Research (cebr) for MMO2, and looks at the future economic impact of mobile communications. According to the report, the mobile industry’s proportion of the UK economy is expected to rise to 3.0%, or Â£49.1 billion, by 2013 — up from Â£22.0 billion, 2.2% of total GDP in 2003.
Government finances also stand to receive a massive boost.Â The total impact, last year, of mobile operators on the Exchequer was Â£15 .2 billion and this is expected to jump to Â£31.8 billion by 2013. Without the mobile industry, the Exchequer would need to find the equivalent of more than 4p on the rate of basic income tax today, rising to over 5p in ten years time.
Peter Erskine, chief executive officer, mmO2, used the report to lobby for a stable regulatory and legislative environment. “The cebr analysis underlines what we have long believed — that the mobile sector is poised for even more dramatic growth as we focus on developing new mobile data products and value-added services. The research shows that these services are likely to account for a significant element of the growth over the next 10 years.
“Across the Group more than five million customers, representing about 25% of the total O2 customer base, are now using non-SMS mobile data services.Â
“However, if we are to maintain the mobile industry’s contribution to the economy and life in Britain, it is imperative we have a stable environment of non-obtrusive regulation and balanced public policy decisions in areas such as the building of cell sites, digital rights management and e-money.Â Following years of enormous growth in the late nineties, we have seen the industry’s contribution to UK GDP plateau over the last two years as a direct result of economic factors and the regulatory climate.”
In addition, the cebr study found that the number of jobs accounted for by the mobile sector will grow from less than 200,000, 0.66% of all employment, in 2003 to over a quarter of a million, or about 0.79% of all employment in the UK within 10 years.
In 2003, per capita productivity in the industry is estimated to have been Â£111,600, nearly three times the national average of Â£34,000. By 2013, productivity in the industry is forecast to have risen to Â£194,200 which will be nearly four times the predicted national average of Â£51,000.