Analysis finds that every 10MHz of additional licensed spectrum allocated for commercial use will result in $1.7 billion in GDP and 7,000 additional U.S. jobs

DEDHAM, Mass., May 1, 2012 /PRNewswire-USNewswire/ — A study released today by Recon Analytics, authored on behalf of CTIA, quantifies the wireless broadband industry’s impact on the U.S. economy. According to the report, the wireless industry added $195.5 billion to the U.S. gross domestic product (GDP) in 2011, and could lead to nearly $1.5 trillion in productivity gains over the next ten years.

Today, the wireless industry contributes more to America’s economic growth than the auto, agriculture, hotel or motion picture industries, according to study author and Recon Analytics founder Roger Entner. The report cites the nearly four million U.S. jobs that are directly or indirectly created by wireless technology, and the approximately $90 billion of government revenue generated by U.S. wireless use.

“Any way you measure – by value, jobs, or productivity – wireless is an American growth leader fueled by investment and innovation,” said Entner.  “What we have is a perfect storm of breakthrough devices and accelerating investment by network providers as they compete to develop and deploy new generations of wireless infrastructure.”

Entner says the growth surge reflects a powerful combination of innovation by wireless carriers to bring 4G mobile broadband service to consumers, along with device makers and mobile apps developers who are also introducing new technologies to the market.

The report describes a relationship between economic growth and the availability of spectrum.  Its analysis of historical data shows that every 10MHz of additional licensed spectrum boosts GDP by more than $1.7 billion and adds 7,000 jobs.

According to Entner, achieving the FCC’s National Broadband Plan’s goal of unleashing an additional 500 MHz over ten years would multiply those benefits 50-fold – totaling $86.5 billion in additional GDP and 350,000 more U.S. jobs.

Among the report’s core findings, in 2011:

  • The U.S. wireless industry is responsible for 3.8 million jobs, directly or indirectly, a gain of approximately 200,000 jobs in the past six years despite a major global recession.
  • The industry added $195.5 billion to the U.S. GDP between July 2010 and June 2011. If that amount were equivalent to a nation’s GDP, it would be the 46th ranked economy in the world.
  • In 2011, wireless services produced $33 billion in productivity improvements for U.S. businesses in nine categories.
  • Over the next decade, productivity gains attributable to wireless are expected to total more than $1.4 trillion.
  • Industry tax, fee, and surcharge payments contributed $88.6 billion to local, state and federal governments in 2011.

“To put this into context, the total wireless industry tax bill was more than the $78.9 billion put aside for the entire Department of Education; more than double the $43.1 billion for the Department of Energy; and almost equivalent to the $89.6 billion allocated to the Department of Transportation,” said Entner.

The report also says that the wireless sector’s value chain continues to spread to new sectors. Most prominently America’s mobile apps industry has benefitted greatly from the economic influences in the wireless sector, growing from virtually nothing, to a $10 billion giant in fewer than five years.

Consumers, too, are reaping benefits – not just in higher quality of service, but in increased consumption and a drop in unit prices for wireless phone calls.  American consumers paid less than a nickel per minute ($0.049) of use last year, one of the lowest rates in the world, down from more than 19 cents in 2000.  By comparison, consumers in Europe paid, on average, nearly 17 cents (0.1670) per minute, more than three times the U.S. price.  The costs of wireless data fell by half between 2010 and 2011 alone, from about eight cents a megabyte to four cents a megabyte.  Text messaging costs also are down on a per message basis as unlimited texting plans have boosted message volume by enabling consumers to text at will.

Entner warns that the potential growth could be shut off by spectrum shortages: “For now, new technologies such as 4G LTE, as well as investment in new towers and other infrastructure are squeezing more capacity from each MHz, but as a matter of physics, existing spectrum can expand only so far.   To keep the growth going, the wireless industry not only needs additional spectrum, but also policies that won’t get in the way of critical network investment.”

The full study can be viewed here.

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