Growth in internet traffic over mobile networks is set to explode during the next few years, increasing by 84% a year and accounting for 11% of all traffic by 2015.
New research commissioned by Vodafone said every £1 spent on connectivity by the networks, across both fixed and mobile, generates £5 in revenue for the rest of the digital economy. The research by management consultants AT Kearney showed the UK's internet economy is worth £82bn, or 5.7% of GDP.
The report said the need for investment in networks will increase as demand for bandwidth-hungry services like streaming video gets bigger. Total UK internet traffic was predicted to grow by an average of 37% a year between 2010 and 2015. However, this is far outpaced by the predicted growth in mobile internet of 84% per year, as smartphone and tablet ownership becomes more common and 4G services are introduced.
However, the report said the Government needs to encourage investment by mobile networks, not hinder it. Vodafone UK CEO Guy Laurence [pictured] said: 'The supportive regulatory environment created by the Government a generation ago encouraged the investment that resulted in the first ever mobile call by Vodafone in 1985. We need that same visionary approach today to support the development of the UK internet economy and the networks upon which it depends. Only this will ensure that British companies can compete on equal terms with their international rivals.'
Vodafone said the forthcoming Communications Green Paper 'offers the opportunity to create a regulatory model for an internet economic age' and will replace the 'out of step' 2003 Communications Act. The operator added: 'Fixed, and increasingly mobile, connectivity is the lifeblood of internet economy and makes up the largest segment of the UK internet value chain. Economic growth will only come with a regulatory structure that provides the stable environment that businesses like Vodafone need to invest in faster networks to unlock the economic potential of the internet.'