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The Telecom is good for you!

Week 23, 2012

Interestingly, it has been estimated that US$ 1 (EUR 0.80) invested in wireless deployment results in as much as US$ 7 to 10 (EUR 5.60 to 8.00) higher GDP. Our secure transactions industry forms an integral part of these benefits coming from the development of wireless activities. The development of the secure transactions industry going from SIM cards, to products and services for mobile payment, in turn, generates a huge growth for the economy. Allowing people to better communicate, interact with a larger community both for interpersonal and business relationships, is a vector of growth. Making payments easier, making transactions more fluid, as is happening now with mobile payments, automatically generates more payments, hence an economic growth. The complexity, which is inherent to the mobile payment ecosystem, is actually a source of growth for the whole economy.

Governments, on a global basis, clearly understand the potential for growth that is generated by the mobile communication activities. For instance, the Chinese government just announced its plans to invest CNY 370 billion (EUR 47 billion) in its telecommunication sector just in 2012 (cf. Telecom section).

On the other hand, potential evolutions in the mobile ecosystem, such as the embedded SIM, or the emergence of the OTT (Over-The-Top) players such as Google, Paypal, or Facebook in the ecosystem, may change the balance of power in the industry and make the mobile network operators less profitable than they are now. This would undoubtedly affect their positive impact on the economy. Let’s not kill the goose that lays the golden eggs.

Thierry Spanjaard

Chief Editor

Smart Insights