{"id":12989,"date":"2025-03-18T14:35:45","date_gmt":"2025-03-18T14:35:45","guid":{"rendered":"https:\/\/www.gsma.com\/connectivity-for-good\/spectrum\/?p=12989"},"modified":"2025-03-25T14:37:44","modified_gmt":"2025-03-25T14:37:44","slug":"a-delicate-balance-spectrum-and-pricing-obligations","status":"publish","type":"post","link":"https:\/\/www.gsma.com\/connectivity-for-good\/spectrum\/a-delicate-balance-spectrum-and-pricing-obligations\/","title":{"rendered":"A delicate balance: spectrum and pricing obligations"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Licensing regimes can create a positive policy environment to encourage network development and quality. Regulatory certainty supports robust long-term investment, and mobile has the best chance to support economic growth if licences are assigned and renewed in a way that fosters growth.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A closer look at how Austria, Canada, Colombia and Spain have approached recent spectrum auctions and renewals can help inspire countries that want to prioritise improved mobile connectivity over short-term financial gains.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Maximising revenue from spectrum auctions, rather than looking at long-term network development, can slow network rollouts, reduce network quality, and lead to poorer mobile coverage. Over the past years, licensing processes using a combination of obligations and lower spectrum costs have been used by governments as a mechanism to help improve network quality, especially in rural areas.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Austria and Colombia both recently decided to offer a discount in their spectrum assignment processes to make coverage expansion in rural areas a more financially viable proposition for mobile operators.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Austrian regulator RTR used bidding related to coverage commitments for its 700 MHz auction. In the first stage, winning bidders for each 700 MHz lot had to commit to providing coverage to 150 underserved communities. In the second stage, bidders could voluntarily commit to cover additional communities in exchange for a bid discount.<\/li>\n\n\n\n<li>MinTIC in Colombia chose an auction format in which the total bid for the 700 MHz band was a combination of cash and coverage commitments. In the second part of the auction, the number of underserved areas the mobile operators were willing to cover was turned into a cash-equivalent value.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Canadian regulator ISED chose to renew licenses in 2.5 GHz with no upfront fee if licence holders could demonstrate that they were offering a minimum level of population coverage \u2013 ranging from 15% to 50% in different regions of Canada.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some countries went further, with no inclusion of obligations when renewing spectrum. Spain\u2019s Ministry of Economic Affairs and Digital Transformation enabled a one-time extension to existing spectrum licences, at no upfront cost or related obligations, for a period of up to 10 years and with a maximum licence term of 40 years. The ministry wanted to enable operators to \u201camortise [a] period of investments demanded by the telecommunications sector for a longer time\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Challenges to overcome<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Just as these approaches can inspire best practices elsewhere, some of the challenges the countries have faced can also provide good learning. They outlined the importance of transparency during the whole process, ensuring that all components promote efficient outcomes, and that the obligations are achievable and clearly defined.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some issues required attention.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In Austria, progress on achieving the coverage targets was hampered by ambiguity in the auction rules on the measurement process for validating coverage \u2013 a topic which the industry and the regular RTR are working to address.<\/li>\n\n\n\n<li>In Colombia, the minimum bid was not published ahead of the auction, leading to complex bidding and high uncertainty. Also, the way underserved areas were defined did not reflect actual roll-out costs.<\/li>\n\n\n\n<li>In Canada, obligation conditions increase the cost of holding spectrum licences without providing incentives for efficient spectrum use. The operators challenged ISED on these conditions during the consultation, but no changes to the licence conditions were implemented.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Despite challenges, these countries help illustrate a way forward beyond high spectrum prices by prioritising expanded and improved connectivity for everyone. Any government or regulator that wants their country to be at the forefront of digital inclusion and innovation should look hard at the best way forward for assignments and renewals to ensure connectivity for all.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Learn more about spectrum licensing and read country case studies <a href=\"https:\/\/www.gsma.com\/connectivity-for-good\/spectrum\/gsma_resources\/best-practice-mobile-spectrum-licensing\/\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Licensing regimes can create a positive policy environment to encourage network development and quality.<\/p>\n","protected":false},"author":56,"featured_media":12990,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","footnotes":""},"categories":[1692],"tags":[971,952],"algolia_discover_type":[4026],"class_list":["post-12989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-spectrum-licensing","tag-spectrum-pricing","algolia_discover_type-article"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>A delicate balance: spectrum and pricing obligations - Spectrum<\/title>\n<meta name=\"description\" content=\"Licensing regimes can create a positive policy environment to encourage network development and quality.\" \/>\n<meta name=\"robots\" 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