Mobile service innovation: A European failure

The continuing absence of innovation in Europe’s mobile services industry is identified and characterised here, with such examples as mobile Internet and mobile music. Innovation failure is a critical factor leading to a lack of high-income jobs, network effects, and price reductions for data services. Most mobile service innovations have been made in Japan in ‘clubs of operators’ with their suppliers. Apple USA followed the same model of control with its iPhone. Conversely, a lack of this critical type of competition characterises European operators. Revenues per citizen are in some countries similar to those in Japan, but with handsets with less functions. Europe and all other regions face the challenge of competing with Japanese and US innovators. The lessons to be learned are (1) becoming aware of the situation, (2) allocating spectrum that covers a sufficient population size to allow technological competition, and (3) developing a strong customer orientation.