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Deloitte Report Finds That US Lead in Mobile Telecom Widens
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Working Groups Publishing Date: September 4, 2014

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According to a new Deloitte report, mobile broadband is quickly growing to be recognized as a substantial component of
technological eminence, as well as the United States economy as a whole. The report finds that the U.S. increased its position
in the mobile broadband market by 11 percent in the most recent periods covered in Deloitte's mobile index that compares
the U.S. against 19 other countries, each with established mobile broadband sectors, using 15 competitive indicators. As a
result, the U.S. increased its lead by about 44 percent, essentially recovering the ground it lost over the last several years to
return to a lead similar to which it had in 2008. Canada, the third ranked region, strengthened its position by gaining about 6
percent, while China continued its nearly decade-long upward movement of about a 5 percent increase.

However, the U.S. position has not always been strong. From 2006 to 2009, roughly three-quarters of the U.S. lead vanished
even as the country actively advanced mobile broadband capabilities, largely because other countries and their
governments made significant investments in developing and growing their mobile broadband capabilities and usage. In
other words, during this period, the U.S. lead did not shrink due to a lack of effort or decline in capabilities, but simply because
global competitors improved faster.

According to the report, if the U.S. loses its current position as the global leader in mobile broadband, the economic
consequences at home could be severe. The top spot could be in jeopardy due to a lack of spectrum availability, which
could result in diminished technology eminence as well as a direct loss of $67 billion in GDP and 344,000 jobs in less than a
decade in the U.S. Moreover, the report notes that the indirect impacts are potentially more significant, with a mobile
broadband supply shortage affecting almost every U.S. industry given the pervasiveness of mobile broadband applications,
which are increasingly indispensable to businesses and consumers alike. Further, the Internet of Things (IoT) – a growing
technology movement to give everyday objects network connectivity is heavily dependent on mobile, putting a potential
$1.2 trillion in new economic growth at risk, if spectrum is not available.

This scenario is one of two outlined in the fourth edition of Deloitte's report on mobile broadband and spectrum policy,
entitled United States Expands Global Lead in Mobile Broadband. The report explores the future of U.S. spectrum supply over
the next decade and updates the firm's proprietary Mobile Communications National Achievement Index. The index

compares the U.S. against 19 other countries with established mobile broadband sectors using 15 competitiveness indicators.
This report follows the Airwave Overload report from two years ago, and updates the index produced at that time.

"The good news is that the U.S. is the global leader in mobile broadband and also continues to have a dominant position in
other critical aspects of the mobile ecosystem," said Craig Wigginton, partner, Deloitte & Touche LLP, and U.S., global and
Americas telecommunications leader. "It's important, however, that we not become complacent. Other countries are
aggressively positioning themselves for a time when the U.S. might become vulnerable due to a mobile broadband supply
shortage. While industry actions have yielded significant supply improvements and play a vital role in shoring up U.S. mobile
broadband leadership in the near-term, there are limits to how much more industry can accomplish with a finite amount of
spectrum."

Mobile Broadband Leadership Offers Economic Benefits Beyond the Wireless Industry
The report highlights sustained U.S. leadership in mobile broadband over the past decade, when the mobile ecosystem
became a critical component of America's economy. With this leadership comes tremendous potential for emerging mobile
applications in areas such as telematics, mobile health, and mobile commerce. Traditional activities can also be improved in
non-traditional ways with mobile broadband. For example, a recent survey found that 80 percent of physicians use tablets or
smartphones to directly influence patient care, and those physicians achieved an average productivity gain of 1.1 hours per
day.

Industry Calls for Better U.S. Policy Actions Related to Spectrum Availability
Mobile broadband is viewed around the world as a strategic national infrastructure asset and the report flags that several
 countries are aggressively positioning themselves for a time when the U.S. might become vulnerable due to a mobile
broadband supply shortage. For example, China intends to invest $320 billion in broadband infrastructure through 2020 and
investment in 4G may reach $16 billion in 2014, while India is planning an auction of up to 100 MHz of additional spectrum in
the 700 MHz band that is well suited to wireless broadband.

The U.S. government will play an ever-increasing role in the continuation – or erosion – of U.S. mobile broadband leadership.
Despite significant action and innovation, the telecommunications ecosystem is becoming more dependent upon pending
government policy to avoid a supply shortfall. According to the report, the pace of government action is a critical factor,
given past experience in bringing additional spectrum into the market. History shows that years or even a decade can pass
between the initiation of a spectrum reallocation and the point when the spectrum becomes available for use.

The report concludes with a call for a redoubling of U.S. efforts to put spectrum of sufficient quantity and quality into the
marketplace in the next few years for wireless carriers to meet demand. By better matching supply to demand, the U.S. will be
able to strengthen and extend its mobile broadband lead in a variety of new industry segments, strengthening their global
competitive edge. The report suggests that mobile broadband is becoming so fundamental to our economy that trends in
mobile broadband performance could become leading indicators of overall economic performance in the U.S.

For more information and the full Mobile Communications National Achievement Index, please visit
www.deloitte.com/us/mobileindex. Connect with us on Twitter: @DeloitteTMT and the hashtag #mobileindex.

About Deloitte's Technology, Media and Telecommunications practice

Deloitte's technology, media and telecommunications practice serves more than 1,400 clients in the U.S., including the vast
majority of market category leaders across all sector segments. Deloitte practitioners, many with direct industry experience,
deliver a breadth of services including professional audit, consulting, enterprise risk management, financial advisory and tax.
The practice is also home to the Deloitte Center for the Edge, which conducts original research and develops substantive
points of view for new corporate growth. The Silicon Valley-based Center helps senior executives make sense of and profit
from emerging opportunities on the edge of business and technology.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a
detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest
clients under the rules and regulations of public accounting.

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