Europe’s wireless carriers fell further behind their U.S. counterparts last year in their efforts to boost phone bills and upgrade networks to speedier technology, findings by the GSMA industry group showed.
The average European consumer spent $38 per month in 2012 on mobile subscription, compared with $69 in the U.S., the GSMA said in a report published today. Wireless phone bills in Europe have declined steadily since 2000, while U.S. carriers have reversed that trend since 2010, it said.
“It’s clear the European markets are under-performing,” Tom Phillips, the GSMA’s chief government regulatory affairs officer, said in a phone interview. “The rollouts of next-generation 4G technology have been delayed and carriers’ investments have been cut back.”
U.S. operators such as AT&T Inc. and Sprint Nextel Corp. have been quicker to shift their networks to faster new-generation technology, charging customers more for services, while Europe’s phone companies have been more reluctant to invest to upgrade amid tough competition and dim economic forecasts, according to the report.
At the same time, consolidation in the U.S. wireless market is helping carriers trim cost and improve funding. As it completed a merger with MetroPCS Communications Inc., T-Mobile - - a unit of Deutsche Telekom AG -- has announced plans to eliminate some positions at its headquarters in Bellevue, Washington.
SoftBank Corp. yesterday won U.S. national-security clearance for its $20.1 billion takeover of Sprint Nextel, helping shore up the deal as the Japanese company tries to ward off a counteroffer from Dish Network Corp.
In Europe, antitrust authorities last year opposed Vodafone Group Plc’s plan to merge its Greek business with a local competitor. Hutchison Whampoa Ltd.’s 1.3 billion-euro ($1.7 billion) purchase of Orange in Austria was approved only after the Hong Kong-based company agreed to give up wireless frequencies in the country.
“Europe seems to be fixed on the view that the more competition the better,” the GSMA’s Phillips said. “U.S. regulators on the other hand have given carriers space to invest in high-risk new technology. That should definitely be the model for Europe from a regulatory perspective.”
Neelie Kroes, the commissioner responsible for setting digital policy within the European Union, today called on lawmakers to abolish mobile-phone roaming fees and guarantee equal access to the Internet, eliminating restrictions on broadband speeds and access to certain types of services.
Such moves could further depress profit margins as operators struggle to stem a decline in fixed-line revenue.
The Stoxx 600 Telecommunications Index of 23 European telecommunications companies fell 0.6 percent. It was the second-worst performance out of 19 industry groups today, and trimmed the index’s gain to 8.5 percent this year.
Vodafone, Europe’s largest phone company by market capitalisation, has climbed 12 percent during the past 12 months, while France Telecom SA has fallen 20 percent.
After years of sliding prices for wireless packages, executives including the chiefs of France Telecom and Vodafone have said they hoped 4G premiums would push customer bills up to levels comparable with the U.S. Faster service has yet to translate into a boost to profits, amid stiff competition.
Phillips said European carriers first need to be encouraged to invest massively so that consumers use their services more. The U.S. case shows consumer appetite for faster speeds and increased capacity, he said.
U.S. customers use their mobiles more intensely to make calls and transfer data for services such as e-mail, online video and music, as well as browsing the Internet, the GSMA’s report showed.
In the U.S., subscribers spent about 15 hours per month talking on their mobiles last year, compared with less than 3 hours in Europe. They use almost twice as much data per connection.