Government decisions on spectrum pricing continue to impact on mobile coverage and speeds. The GSMA’s latest report on spectrum pricing finds spectrum costs have risen sharply as a percentage of revenues, increasing the cost burden on operators and constraining critical network investments.
Authored by GSMA Intelligence, the “Global Spectrum Pricing” report builds on data from over 250 operators in almost 100 countries. It takes an in-depth look at trends in spectrum pricing since 2014 and their impact on consumer and enterprise connectivity.
On average, global cumulative spectrum costs now account for 7% of operator revenues, a 63% increase over the past ten years. In the worst-case scenario, spectrum prices are so high that they can account for 25% of operator revenues.
Real-world impact of spectrum pricing
Increased spectrum cost hurts consumers too. A 10-percentage point higher spectrum cost to revenue ratio leads to coverage that is up to 6 percentage points lower. This effect is observed for both 4G and 5G coverage. There is a similar negative effect on network speeds. A 10-percentage point higher spectrum cost leads to a reduction in download speeds of 8%.
Based on these results, the GSMA urges policymakers to adjust spectrum prices in line with current market conditions and the economic realities faced by operators.
Below is the report and more on spectrum pricing. You can also read about the latest spectrum developments on the GSMA Spectrum Blog.
Global report (NEW)
Impact of spectrum prices on consumers
The policy positions
The issue of getting spectrum pricing right has never been more vital. Additional spectrum is central to expanding and upgrading mobile broadband speeds and coverage. To help provide guidance, the GSMA has developed ten positions on the importance of fair spectrum pricing.
The Policy Positions
Asia-Pacific
High spectrum prices can hinder the roll out of mobile services in cities and rural areas in APAC. These reports examines how APAC countries can implement effective spectrum policies to get the most out of 5G.
Country insights
Africa
The GSMA’s latest spectrum pricing report takes a look at this important topic in Africa. Spectrum licensing and pricing, in particular, can play a crucial role in accelerating the adoption of mobile services and providing better networks and services for consumers.
The “Effective Spectrum Pricing in Africa” report is unprecedented in scope and depth, tracking spectrum assignments across nearly 50 African countries for the period 2010–2019.
Full report
Latin America
This report takes a closer look at spectrum policies in Latin America and how they are impacting the delivery of mobile services to consumers and businesses in the region. We have also published four country specific reports that underscore how decisions made by governments and regulators can have a negative impact on the quality and cost of mobile broadband services.
Latin America Full Report
Latin America Summary
Country Specific Reports
Europe
The European report looks at the 28 EU member states plus Switzerland and Norway in more detail. As with the global study, the observation is that average spectrum prices have trended upwards. Again, there is a link between high prices and more expensive, lower quality mobile broadband services.
Europe Full Report
Country insights
What next?
For countries that want to adopt spectrum policies that focus on setting the stage for the best possible mobile services, the first steps are to:
1. Set modest reserve prices and annual fees and rely on the market to set prices;
2. License spectrum as soon as it is needed as this helps avoid artificial spectrum scarcity;
3. Avoid measures that increase risks for operators (e.g. that put the value of their company in jeopardy); and
4. Publish long-term spectrum award plans that prioritise public welfare benefits over state revenues.
These points are further developed in the GSMA’s policy position paper on spectrum pricing. At the end of the day, the main goal of governments around the world should be to get the most out of its mobile spectrum resources. And that is not the highest possible prices.
