Alistair Cotton - Fotolia

Spectrum costs hit the world’s poorest hardest

The inflated cost of radio spectrum to support mobile network roll-out is harming the economic and social welfare of billions of the world’s poorest people, says the GSMA

Mobile spectrum prices in developing countries are three times higher than in developed countries when local income is taken into account, and the situation is harming the economic and social welfare of billions of people who remain unconnected, according to a report from the GSMA.

Launched at its Mobile 360 – Africa conference, currently under way in Kigali, Rwanda, the GSMA’s survey Spectrum pricing in developing countries argued that high spectrum pricing is a major barrier to improving mobile penetration, and called on governments to pursue better spectrum pricing policies.

However, the report also identified the fact that many governments are in a catch-22 situation, in that keeping spectrum prices high helps to maximise state revenues. The report showed that high spectrum prices were also linked to countries with high sovereign debt levels, and reserve prices in spectrum auctions are five times higher in developing countries than in developed ones.

The report also identified a link between high spectrum prices and poorer overall coverage and more expensive mobile broadband services, as this forces operators to use more of their budget on licences than on real-world networks. A similar problem was identified in the UK after the 3G spectrum auction.

“Connecting everyone becomes impossible without better policy decisions on spectrum,” said Brett Tarnutzer, GSMA head of spectrum. “For far too long, the success of spectrum auctions has been judged on how much revenue can be raised, rather than the economic and social benefits of connecting people.

“Spectrum policies that inflate prices and focus on short-term gains are incompatible with our shared goals of delivering better and more affordable mobile broadband services. These pricing policies will only limit the growth of the digital economy and make it harder to eradicate poverty, deliver better healthcare and education, and achieve financial inclusion and gender equality.”

The GSMA’s analyst unit, GSMA Intelligence, studied 1,000 spectrum assignments in 60 developing and 42 developed countries over the seven years to 2017, and uncovered a number of policy decisions governments are taking that are hurting take-up and penetration.

These include setting high final prices administratively or at reserve, limiting the amount of licensed spectrum available, not sharing a clear roadmap, and poorly-considered auction rules.

“If mobile operators don’t get affordable and predictable access to spectrum, it will be consumers who will suffer the most,” said Pau Castells, GSMA Intelligence director of analysis.

Read more about mobile networks

  • SSE Enterprise Telecoms will connect Three’s mobile network into BT’s local telephone exchanges as the mobile operator ramps up its preparation for 5G.
  • Separate tests in Romania and the UK have been demonstrating the potential of fixed wireless access as a component of 5G.

“Developing countries have the opportunity to catch up with the developed on mobile adoption. However, the investment case in some of these markets is being put at risk. Operators cannot keep paying significantly more for spectrum when consumer incomes and expected profits are much lower in these markets.

“This is making network investment challenging at a time when policies should encourage the development of the mobile sector to maximise the benefits it can bring to everyone.”

GSMA Intelligence has also launched its latest Mobile Connectivity Index, measuring the performance of 163 countries against key enablers of mobile internet adoption.

According to the GSMA, as of the end of 2017, 3.3 billion people, or 44% of the planet’s population, were connected to mobile broadband services on 3G or 4G networks, an increase of 300 million on 2017.

This leaves 3.9 billion people unconnected, about 900 million are not covered by a network footprint, and three billion who live within a network footprint but do not access services. Most of the global unconnected live in the developing world.

In the two lowest-ranking countries, Chad and Niger, the penetration of mobile broadband services were 6.6% and 3%, respectively, while at the top end of the scale, Australia’s penetration was almost 130%. In the UK, it was 97.3%.

Read more on Mobile networking

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close