As the leading firms in the industry show at MWC Barcelona how they are advancing mobile communications, a report from global mobile industry trade body the GSMA is calling on governments to prioritise pro-investment policies to accelerate network expansion, strengthen digital economies and provide support for continued mobile network expansion and innovation.
The Mobile internet connectivity infrastructure investment landscape report, undertaken by global management consulting firm Kearney, was produced at a time that the GSMA describes as a “crucial moment” when governments worldwide are seeking to expand digital connectivity and foster economic growth through advanced networks, including 5G and future generations of mobile technology.
The trade association said the findings paint a picture of the investment landscape, which reveals mobile networks are no less than “indispensable” to digital progress, but that infrastructure investment requires the right regulatory environment, with core and access networks demand significantly higher investment than backbone infrastructure.
The data fundamentally showed that total investment in mobile internet connectivity infrastructure is $127bn per year on average on the backbone through to access network infrastructure, with an additional $117bn being spent on the connectivity component of devices needed to connect to the internet.
When combined with what was calculated to be an additional $189bn being invested each year in fixed network infrastructure (excluding end-user devices), this made a total investment of $316bn in internet connectivity infrastructure – 40% more than what is being spent globally on datacentre infrastructure.
Mobile network operators were found to make 85% of the total investment in mobile internet connectivity infrastructure globally, playing the “keystone” role in funding the networks that underpin modern digital economies worldwide, according to the report.
The trade association added that the mobile operators make these investments despite deriving less economic benefit than other digital ecosystem players from this critical infrastructure. It stressed that the amount contributed by MNOs far exceeds the connectivity investments made by other groups of investors such as content and application providers (CAPs) and cloud service providers.
Despite this, the study prompted the GSMA into a call for policy action, urging governments to adopt forward-looking regulatory frameworks that encourage investment in mobile infrastructure, streamline spectrum policies, and create a fair and sustainable financial environment for operators.
It observed that while investments made by the large CAPs and cloud infrastructure providers to optimise delivery of their traffic and reduce their delivery costs were positive, they were “relatively small”, accounting for less than 2% of the total spend on mobile internet connectivity infrastructure.
With this in mind, the GSMA emphasised that it was important to ensure that such investment is deployed in a balanced way, and that all backbone traffic needs to be delivered by core and access networks to reach its destination for the internet to work smoothly. Moreover, the GSMA warned that to be effective, investment in backbone infrastructure needs to be matched by a parallel and much greater investment in core and access infrastructure. It calculated that an investment of between eight (backbone versus core) and 19 times (backbone versus access) higher was needed for the balance to be maintained
“This report makes it clear – mobile network operators are the keystone of the internet economy, funding the vast majority of the infrastructure that enables modern digital life,” said GSMA chief regulatory officer John Giusti.
“While others invest in select parts of the world’s connectivity infrastructure, their contributions are a fraction of what MNOs spend to build and maintain the networks that power everything from online banking to remote work and digital entertainment. This study demonstrates clearly that if governments wish to unlock the full potential of their digital economies, they must prioritise policies that create a positive investment environment for MNOs.”
