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Americans Talk and Use Data More than Europeans

There is a troublesome trend occurring where some people are suggesting that the mobile environment in Europe is better for consumers than the U.S. This is bothersome and unfortunate since these individuals fundamentally fail to understand reality, or selectively choose facts to support their beliefs.

Around the world, it is understood that the United States is leading the mobile revolution.

“Europe was long viewed as a pioneer in mobile, but... is now lagging behind other regions in the deployment of mobile broadband, particularly in 4G/LTE,” said Anne Bouverot, Director of the GSMA.

Neelie Kroes, European Commissioner for the Digital Agenda, acknowledged the same.

“Even as we roll out the latest networks, I know we also need to look ahead to invest in researching the next generation of networks – I am talking about 5G. OK, we missed 4G, we were the leader in 3G, now let’s take over the 5G.”

I believe the best way to address the “grass is greener in Europe” delusion is to look at the facts. As John Adams observed, “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”

So let’s look at the facts. If you remember just one thing I’m about to throw at you, remember this: Americans use a lot more wireless service – voice, text and data – than our counterparts in Europe – and more of us are on faster 4G/LTE networks.

European carriers are struggling to try and replicate this model for their consumers. According to GSMA, “the EU is lagging well behind the U.S. in deployment of next generation wireless infrastructures and the advanced services they make possible, and that EU consumers are worse off as a result.”

As the head of the U.S. wireless industry trade association, I’m proud that our members created – and continue to develop – these innovative products and service that so many Americans want – and do – use. But I can’t help but feel bad for our friends in Europe.

Americans Talk and Use Data…A Lot

A lot of people get confused when they try to compare a U.S. plan to one from the EU. Setting aside the EU consumer for a moment, even within the U.S., our consumers are different – very different. As a result, America’s wireless companies offer a wide variety of plans, ranging from pre-paid and post-paid, to family plans, tiered or unlimited plans, to a combination of the alternatives.

As you will see in a few statistics below, the EU consumer is very different from the American consumer. The OECD Communications Outlook and Ofcom try to make comparisons based on a number of theoretical baskets, but they are largely artificial since they ignore extremely different usage patterns and fail to take into consideration dramatic differences in network and device performance that lead to a very different consumer experience.

In the U.S., wireless consumers use four to five times as many voice minutes than those in the five largest EU countries. Americans also use more data – a lot more. Earlier this year, GSMA released a report that compared the U.S. and EU. Among the multiple statistics in the report, two usage statistics jumped out:

  • Europeans used 174 voice minutes, while Americans used 901 minutes.
  • Europeans used 273 MB while Americans used 480 MB.

This discrepancy in usage in the U.S. versus Europe isn’t new. In fact, Americans have consistently used more minutes than Europeans, even when taking into account the national differences in billing practices. The precise amount varies depending on the countries compared, but the U.S. minutes are dramatically different, and significantly greater than the Western European average or the national averages reported by Bank of America Merrill Lynch.

  • France average is 234 minutes
  • Germany average is 132 minutes
  • Italy average is 170 minutes
  • Spain average is 158 minutes
  • UK average is 184 minutes.

More Investment and New Devices Encourage More Usage

The usage patterns described above and by GSMA’s report often drive the range of plans offered to consumers in each of the countries. In turn, the revenues from the subscribers’ purchase of those plans allow for capital investment to upgrade networks, which improves the networks and results in greater usage by consumers.

Something that’s not discussed by many in the U.S. is what is causing the increase in the ever-growing disparity among the U.S. and Europeans. It’s two-fold: investment and innovation.

First, let’s look at investment.

  • The U.S. carriers invested about $94 per subscriber while the rest of the world’s carriers invested about $16 in 2012. The EU5 invested about $35 per subscriber.

But 2012 isn’t an anomaly for U.S. carriers and their investments in infrastructure, from towers to antennas to capacity to faster networks. Over the last 10 years, U.S. carriers invested almost $250 billion. And this figure doesn’t include the billions they paid to the U.S. government to acquire spectrum.

Thanks to the long-term strategy and thoughtful planning by the U.S. carriers, U.S. data speeds are faster, on average, than those in Europe and the gap will widen.

Second, the most innovative devices are usually introduced in the U.S. first, and quickly adopted. With slower networks in Europe, what’s the incentive to upgrade to new devices that can do even cooler, better and faster things? In the U.S., Cisco noted that an average 4G smartphone used 1,302 MB a month, while a non-4G smartphone used 577 MB. As this chart shows, that gap is only expected to grow by 2017.

Summary of Per Device Usage Growth, MB per Month in the U.S.

For those few in Europe who do have access to 4G and use it, European 4G-generated traffic was almost twice European non-4G-generated traffic. But it’s important to note that both forms of European traffic were still less than half that reported by Cisco for similar U.S. users.

So, as you can see, the facts paint a picture that differs from what some are trying to argue. The U.S. wireless consumer is living in a world-leading mobile environment that others around the world are trying to replicate. The value the U.S. consumer receives from his or her mobile service is unparalleled and unprecedented.

1. See Informa Telecoms & Media Group, WCIS+ Database, subscribers by geography and technology.

One Response to “Americans Talk and Use Data More than Europeans” Leave a reply ›

  • avatar

    I think this is a classic example of using data and jumping into wrong conclusions.

    Firstly, it is important to remember the old rule of statistics: “Correlation does not prove Causation”. What does this mean? Well, it is using statistics and drawing conclusions about its causes without understanding the context that underpins the data. For example, Iceland has the highest number of Nobel Prize winners per capita in the world. This is pretty impressive given its tiny population, so we must therefore conclude that Iceland has the best education system and research environment in the world. WRONG! Iceland has only ever had one Noble Prize winner, but as per capita ratio it does have the highest number of Nobel Prize winners in the world, which is not really a testimony to its education system but the size of the population.

    Secondly, below the surface of any data lurks a deep sea of cultural context. There is wide variation in cultural interactions in Southern Europe vs. Northern Europe. Southern Europe (or Mediterranean Europe) has a very High-Touch Culture in comparison with Northern Europe. This means Southern Europeans place more importance on personal relationships and direct face-to-face meetings/transactions. This has resulted in less tendency to use e-commerce or online transactions as consumers still prefer to buy from people they know and have less faith in the faceless Internet suppliers.

    This lack of context can also be illustrated in the data related to the minutes usage in Spain. Spain is a large country with low population density (5x the size of the UK but only 46 m people at the last count). This means massive distances between centres of population which has resulted in a less widespread network of wired telephony infrastructure. Once you leave the main centres of population and enter the countryside, you are unlikely to encounter wired telephone or public networks. Residents and businesses in these out-of-town areas rely on Mobile Networks and devices for their very basic telephony needs. It is not unusual to find households without a land-line but multiple mobile phones (Cellphone to our North American readers). This may well explain the relatively high reported minutes for Spain. Conversely, whilst many of these households use mobile networks or satellite services for Data applications such as Internet browsing, the high costs of data-download, reluctance to use the Internet as means of commercial transaction, and deep-routed loyalty to local suppliers has resulted in less usage of data.

    Europe should not be unduly concerned as technology usage should be measured within cultural context and be judged on its contribution to the national GDP, efficiency drive, general contribution to the economy and relative costs (we still do not pay to receive calls on our mobile phones within Europe). Data usage should not be seen as a measure of “greatness” or “league of gentlemen” to see whose is longer, bigger, or wider!

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