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Mobile Communications Is Uniquely Placed to Drive Economic Growth

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At the GSMA's Leadership Summit, bringing together 400 CEOs, government ministers and officials, industry leaders today stressed the unique role that broadband, specifically mobile broadband, can play as an economic stimulus. Those leaders called for governments to support the rollout of mobile broadband services to drive economic growth.

Speaking at a press conference led by Rob Conway, CEO of the GSMA, Carl-Henric Svanberg, CEO of Ericsson, Alexander Izosimov, Chairman of the GSMA and CEO of VimpelCom, Franco Bernabe, CEO of Telecom Italia, Jon Fredrik Baksaas, CEO of Telenor Group and Jeffrey Sachs, Director of The Earth Institute at Columbia University, set out how the wider use of mobile broadband services can stimulate growth and help the world recover from the economic crisis. Wang Jianzhou, CEO of China Mobile, spoke about the investment in mobile infrastructure that his company is making in China and its benefits.

The release of new spectrum for mobile broadband services in 2009 will ultimately add the equivalent of $211 billion to China's GDP, and could add the equivalent of $95 billion to India's GDP, according to a new report by Professor Leonard Waverman and consultancy LECG for the GSMA, which represents the global mobile industry. The rollout of mobile broadband networks will create hundreds of thousands of jobs, encourage new businesses across the value chain, improve productivity and boost consumer spending.

As the mobile industry is one of the few parts of the private sector currently capable of providing an economic stimulus, governments need to ensure they adopt policies that encourage more investment in mobile services and networks. Wherever possible, governments should seek to create a stable regulatory environment, while licensing spectrum on the right terms to encourage spending on network infrastructure and services, stimulating economic growth.

It is also important that governments allocate the same spectrum as other governments in their region for mobile broadband services - this kind of harmonisation will allow the same devices to be used in many different countries and enable manufacturers to achieve economies of scale and lower prices for end users.

The switchover to digital television will present a once-in-a-generation opportunity to make low-frequency spectrum, in which radio waves travel long distances and better penetrate the walls of buildings, available for mobile broadband services. Of the 400MHz of low-frequency spectrum freed up by the switch-off of analogue television, the GSMA believes 100MHz should be used to enable the roll out of cost-effective mobile broadband networks.

Deploying a mobile broadband network using 700MHz spectrum, for example, can cost 70% less than deploying the same network using the 2100MHz spectrum underpinning most of today's 3G mobile networks, making rural areas and other "white spots" economically viable to serve. Moreover, providing mobile broadband coverage is far more cost-effective than installing a new fixed-line broadband connection.

"For mobile broadband to be a mass-market service worldwide and powerful engine of economic growth, the mobile industry needs both a stable regulatory climate and access to the right spectrum on the right terms," said Rob Conway, CEO and Member of the Board of the GSMA. "Wherever possible, governments need to allocate the same chunks of spectrum as other countries in their region, enabling equipment manufacturers to gain economies of scale by producing mobile broadband handsets, computers and other devices that will work in many different markets."

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