£49bn boost from mobile phones

THE mobile phone industry's contribution to the economy and the Government's finances will double to £49bn over the next decade and create a further 56,000 new jobs, according to a new report.

The industry will make up 3% of annual GDP by 2013 compared with 2.2% or £31.9bn in 2003. Total tax payments will rise from £15.2bn to £31.8bn, according to the Centre for Economic Business Research in a study commissioned by mobile phone company mmO2.

Without the mobile industry, the Exchequer would need to find the equivalent of more than 4p on the rate of basic income tax today, rising to over 5p in ten years time, the report said.

Peter Erskine, mmO2 chief executive, used the figures to argue the case for building more mobile phone masts. Fears that the structures may create health problems have sparked fierce opposition from local residents.

'If we are to maintain the mobile industry's contribution to the economy and life in Britain, it is imperative we have a stable environment of non-obtrusive regulation and balanced public policy decisions in areas such as the building of cell sites, digital rights management and e-money,' said Erskine.

'Following years of enormous growth in the late nineties, we have seen the industry's contribution to UK GDP plateau over the last two years as a direct result of economic factors and the regulatory climate.'

The report comes a day after MPs launched a blistering attack on mobile phone companies. They accuse the firms of 'walking all over' the feelings of local people when putting up masts - and councils of failing to really understand the issues when agreeing to allow masts to go up.

The report from the all-party Parliamentary Mobile Group called for tough new legislation on the siting of masts amid fears about their health implications.

The head of the group claims planning rules favour mobile phone companies. Phil Willis MP said: 'The current-regulations favour the operators massively. We are calling for legislative changes to at least make it a level playing field.'

There are more than 40,000 masts in Britain. Scientific opinion remains divided on whether phone mast radiation is harmful to health.

The CEBR study also revealed that the number of jobs accounted for by the mobile sector will grow from less than 200,000 (0.66%) of all employment in 2003 to over a quarter of a million (or about 0.79%) of all employment in the UK within 10 years.