Business environment
Mobile operators provide essential connectivity that people and businesses expect. In recent years, the industry has adapted to major changes brought about by the convergence of technologies and services.
In most countries, however, mobile operators are still subject to rules and obligations that restrict their ability to innovate, invest and compete on equal terms in the digital ecosystem.
Policymakers should strive to create an enabling business environment that fosters competition and protects consumers without impeding commercial activity or economic progress. This will require a fresh look at regulations and revisions that better reflect today’s technologies and markets.
Resetting policy and regulation to drive the digital economy
Many governments, recognising the value of mobile to society, have implemented bold policies to cultivate the digital economy while extending connectivity to underserved communities. A holistic policy framework that reflects the changing digital landscape, while reducing costs and barriers to network deployment, will deliver the best social and economic outcomes.
If regulatory policies and institutions fail to adapt, markets can become distorted in ways that harm competition, slow innovation and, ultimately, deprive consumers of the benefits of technological progress. By updating the regulatory framework, policymakers can ensure that government and industry are aligned and working to foster an inclusive digital society for all.
Figure 1 (page 12) identifies four areas of policy action related to network investment, regulation, promoting the digital economy and demonstrating digital leadership.
Background
Artificial intelligence (AI) is being integrated in products and services at an incredible pace. As the development and adoption of AI has increased, governments have become highly engaged, considering how this technology could be best used to benefit the economy and society while also managing potential risks.
The governance of AI varies, reflecting differences in government priorities, from digitalisation, to risk management, to economic growth. The EU was the first to agree on broad AI legislation focused on transparency, accountability and human rights. The United States is taking a market- driven approach through significant investment in infrastructure and public-private partnerships. China has a state- centric model with technology- specific laws enforcing strict government oversight and control. Meanwhile, countries such as Singapore are promoting international collaboration and responsible innovation through shared governance frameworks aligned with internationally agreed principles.
The telecoms sector plays a crucial role in the development and use of AI, providing high-speed, low-latency connectivity between users, data centres and cloud services – all of which are essential for a reliable AI ecosystem.
Telecoms operators also capture high-quality, localised network metadata and customer behaviour data that can be used to design and train AI products and services for enhanced public services, to increase industrial capacity and for AI research and development.
Operators themselves use AI in many aspects of their business, including for network and traffic optimisation, security (such as fraud and scam detection), energy efficiency and edge-computing integration. As use cases are still emerging it is important innovation isn’t stifled by overly burdensome or technologically outdated regulation.
To leverage AI for the welfare of people and the planet, it is crucial that AI be designed, developed and deployed with ethical considerations in mind and respecting the rights of consumers, including their right to data privacy. To this end, the mobile industry has adopted principles for responsible AI (RAI): fairness, human agency and oversight, privacy and security, safety and robustness, transparency and explainability, sustainability and accountability. These are in line with internationally agreed principles such as those developed by the OECD and UNESCO. To support operators in realising these principles, the GSMA has developed a range of practical tools, offering clear steps to implement RAI across their organisations.
Debate
How can legislators, regulators and the AI ecosystem, including MNOs, engage effectively to support and contribute to the AI transformation?
What governance framework strikes the right balance between ethical and responsible development and use of AI, while fostering innovation and technological development?
What kinds of policies can foster a thriving AI ecosystem while ensuring responsible use of power and preventing abuse of dominance?
Industry position
As the development and adoption of AI accelerate, policymakers, regulators and industry must work together to realise the benefits in a responsible and sustainable way.
It is important that governments facilitate investment in the AI ecosystem, including the infrastructure that enables it, such as telecoms networks, to maximise opportunities for society and the economy.
Governments should prioritise research and development and incentivise partnerships across the AI ecosystem to ensure innovation and future competitiveness. They should also foster an environment that attracts and cultivates AI talent, while expanding digital skills programmes to help citizens and industry keep pace with rapidly evolving AI technology. Governments can also adopt AI to enhance public services, such as infrastructure planning, health care and disaster response.
Creating a clear and consistent policy environment that encourages the development and use of AI is vital. Using shared governance frameworks based on internationally agreed principles for AI can support the global harmonisation of rules. Policymakers should work with industry, including through collaborative governance mechanisms such as time-limited regulatory sandboxes, to allow new ideas and emerging technologies to be tested. To ensure that regulation keeps pace with technological advances, investment in institutional capacity building is recommended to equip policymakers and regulators with up-to-date knowledge and global best practices. This will shape more informed and evidence-based policy responses.
By pursuing these actions, policymakers and regulators can help create an environment in which AI innovation thrives, delivering long-term social and economic benefits while ensuring the technology is used responsibly and ethically.
Resources
The Mobile Industry and AI, GSMA, 2023
The GSMA Responsible AI Maturity Roadmap
Distributed inference: how AI can turbocharge the edge, GSMA Intelligence, 2025
Background
Mobile phones are the most widely adopted consumer technology in history. In large part, this success is due to competition in the mobile industrythat has driven innovation.
The digital economy and explosive growth in smartphone adoption have brought innovation and disruption to traditional mobile communications services. These changes have also had an impact on existing policy frameworks and challenged competition policy.
Despite the influence of new market dynamics on the mobile sector, the industry is still subject to the contradictions of a legacy regulatory system. This has put services in competition with each other, such as voice services offered by mobile operators and internet players that are, so far, regulated differently.
These differences can be seen in how economic regulation and competition law are applied to the sector. For example, a regulator’s jurisdiction may be limited to the telecommunications sector and not extend to internet players. As a result, regulators often fail to take wider market dynamics into account during the evaluation and decision-making process. Equally, a failure to understand the complex value chain can affect how competition law is applied.
Current competition policy is also being challenged by the competitive advantage conferred on some companies through their ability to collect and analyse large troves of data. Combined with powerful network effects and the tendency for markets to tip in favour of dominant platforms, this can harm consumers, hinder competition and stifle innovation.
The ability of competition policy and enforcement to deal with issues arising in digital markets is, therefore, key to the competitive development of the entire digital economy.
Debate
How should markets be defined in the digital age?
How can traditional competition tools be applied in the digital age?
Are significant market power (SMP) access remedies still appropriate?
Industry Position
The mobile industry supports competition as the best way to deliver economic growth, investment and innovation for the benefit of consumers. Excessive regulation stifles innovation, raises costs, limits investment and harms consumer welfare through the inefficient allocation of resources, particularly spectrum-related ones.
To ensure that competition and innovation thrive, it is essential that policymakers create a level playing field across the digital ecosystem. All competitors providing the same services should be subject to the same regulatory obligations, or absence of obligations. This should be achieved through a combination of deregulation and increased use of horizontal legislation to replace industry-, technology- or service-specific rules.
Regulators and competition authorities must recognise the dynamic nature of competition in the digital age. Internet players adopt new and different business models to offer services to customers, such as advertising-supported services that rely on sophisticated web analytics. Regulators and competition authorities need to understand these models and map their competitive impact before imposing regulatory obligations or competition law commitments. Otherwise, services that are in competition with each other may end up being regulated differently. For example, those that adopt traditional business models that are better understood may find themselves subject to greater scrutiny.
Including these new types of competitors in market assessment reviews could reveal there is much more competition in communications services than regulatory and competition authorities currently recognise. It could also demonstrate the potential for regulatory policy goals to be achieved through competition law.
A basic principle of economic regulation is that regulation should not be imposed if competition law is sufficient to deal with the issues identified. Therefore, regulation of licensed providers could be lessened or may no longer be needed. Competition law itself can also be improved and updated to tackle the issues arising in digital markets more effectively, as some authorities around the world are demonstrating.
Resources
GSMA Competition Policy website
The Data Value Chain, GSMA, 2018
Background
From the outset, mobile markets have been characterised by a vibrant, competitive market structure that drives investment and innovation.
Today, demand for robust, high-speed, high- quality mobile broadband continues to grow. This drives mobile operators to make large, regular investments in network infrastructure and services to provide consumers and businesses with improved offerings. For example, while many operators continue to invest in their 4G networks, they are also investing in 5G network deployments.
The high level of competition in the mobile services market has caused the tariffs charged to mobile users to fall steadily and significantly over the past few years. At the same time, consumption of mobile services – and mobile data in particular – has grown steadily, with most users getting far more for their money.
To preserve competition, foster innovation and support the wider societal benefits of mobile connectivity, policymakers must ensure the right economic conditions are in place to support investments. In particular, they must recognise the competitive nature of today’s mobile markets, avoid regulating prices and steer clear of interventions aimed at engineering market structures. Instead, they should allow market mechanisms to determine the optimal mobile market structure.
Some regulators have used spectrum caps – limits on the amount of spectrum one entity can hold – to influence market structure.
However, spectrum caps can have unintended consequences, including inefficient allocations of the spectrum and/or reduced incentives to invest. Since this ultimately produces poor outcomes for consumers, they must be considered carefully. At the same time, competition authorities tasked with assessing the impact of proposed mobile mergers must take full account of the dynamic efficiencies (and accompanying societal benefits) arising from mobile mergers.
Debate
Can mergers between mobile operators bring significant consumer benefits in mobile markets and wider society?
Industry position
When assessing mobile mergers, policymakers should consider the full range of benefits of mergers, including price effects, innovation, investments and the use of spectrum over the short and long term.
Investment and quality of service
Competition authorities should consider placing greater emphasis on how mergers may affect an operator’s ability to invest. Growing demand for data services requiring ever-increasing bandwidth necessitates continuous investment in new capacity and technology.
Positive spill-over effects to the wider economy Improvements to digital infrastructure support economic growth by increasing productivity across the economy.
Greater benefits than network sharing Competition authorities have often argued that network sharing is a better alternative to mergers. While the pro-competitive nature of network- sharing agreements can only be assessed on a case-by-case basis, these agreements are not always feasible between merging parties because of an asymmetry of assets (such as spectrum holding) or different deployment strategies.
Unit prices
There is no robust evidence to suggest that four- player markets have produced lower prices than three-player markets in the past decade, whether in Europe or elsewhere. Mergers can accelerate the transition between technology cycles inthe mobile industry (which are responsible for significant reductions in unit prices), leading to improvements in quality and innovation in services. As the market moves from voice to data, the global volume growth rate of mobile networks is accelerating. This requires more concentrated market structures to meet the investment challenge, drive mobile data unit prices down and fuel demand for mobile data services.
Effects of remedies on investments and use of spectrum
Mergers that compel mobile operators to provide third parties with access to their networks could reduce incentives to invest and significantly diminish benefits for consumers. In three cases where the European Commission’s Directorate- General for Competition made a network entry option available (Ireland, Germany and Austria), nobody took the option even though it was arguably offered on favourable terms. Remedies that involve reallocating network assets or reserving spectrum for other mobile operators could, in some cases, deter investment and lead to the underuse or misuse of resources.
Resources
Competition Dynamics in Mobile Markets in Europe, GSMA, November 2022
Assessing the Impact of Mobile Consolidation on Innovation and Quality: An Evaluation of the Hutchison/Orange Merger in Austria, GSMA, 2017
Background
Research into the safety of radio signals has been conducted for several decades and underpins the human exposure limits that provide protection to all people (including children) against all established health risks.
The WHO and ITU encourage governments to adopt the radio frequency electromagnetic field (RF-EMF) exposure limits developed by the International Commission on Non-Ionizing Radiation Protection (ICNIRP). These were reviewed and updated in 2020.
New applications, such as 5G, wireless IoT and wearable devices, are designed to comply with relevant exposure limits. The international exposure guidelines are not technology-specific and apply to all mobile technologies, including 5G.
The strong consensus of expert groups and public health agencies, including the WHO, is that no health risks have been established from exposure to the radio signals of mobile devices and mobile network antennas that comply with international safety recommendations.
However, research has suggested a possible increased risk of brain tumours among long-term users of mobile phones. As a result, in May 2011, the International Agency for Research on Cancer (IARC) classified radio signals as a possible human carcinogen. Health authorities advise that, given the scientific uncertainty and lack of supporting evidence from cancer trend data, this classification should be understood to mean that more research is needed. They also remind mobile phone users of practical measures for individuals to reduce exposure, such as using a hands-free device or text messaging.
Mobile phones are tested for compliance with exposure limits when operating at maximum power. A mobile phone typically operates at a much lower power level.
For mobile networks, whether 2G, 3G, 4G or 5G, the typical levels in publicly accessible areas are a small fraction of the exposure limits and similar to broadcast services.
A comprehensive health-risk assessment of radio signals is being conducted by the WHO. The conclusions are expected in 2024.
Debate
Does using a mobile phone regularly or living near a base station have any health implications?
Are there benefits to adopting the updated international EMF limits for mobile networks or devices?
Should there be specific restrictions to protect children, pregnant women or other potentially vulnerable groups?
Industry position
National authorities should implement EMF- related policies based on established science in line with international recommendations and technical standards.
Significant differences between national limits and international guidelines can cause confusion and increase public anxiety. Consistency is vital and governments should:
- Base EMF-related policy on reliable information sources, including the WHO, trusted international health authorities and expert scientists.
- Set a national policy on the siting of masts, balancing effective network roll-out with consideration of public concerns.
- Accept mobile operators’ declarations of compliance with international or national EMF limits based on the technical standards of organisations such as the International Electrotechnical Commission (IEC) and the ITU.
- Actively communicate with the public and address their concerns based on the positions of the WHO.
The current WHO position is that international safety guidelines protect everyone in the population with a high safety factor, and that there is no scientific basis to restrict children’s use of phones, or the locations of base stations. The GSMA encourages governments to provide information and voluntary practical guidance to consumers and parents based on the position of the WHO.
Concerned individuals can choose to limit their exposure by making shorter calls, using text messaging or hands-free devices that can be kept away from the head and body. Bluetooth earpieces use very low radio power and reduce exposure.
The mobile industry works with national and local governments to address public concerns about mobile communications. Adoption of evidence- based national policies on exposure limits and siting of antennas, public consultations and information can help to reassure the public.
Ongoing, high-quality independent research is necessary to support health-risk assessments, develop safety standards and provide information to inform policy development. Studies should follow good laboratory practice for EMF research and be governed by contracts that encourage open publication of findings in peer-reviewed scientific literature.
Resources
The International EMF Project website, WHO
EMF Exposure Compliance Policies for Mobile Network Sites, GSMA, 2021
International EMF Exposure Guidelines, GSMA, 2021
Safety of 5G Networks website, GSMA
5G EMF Surveys, GSMA interactive map
Mobile Technology Evolution, 2025, GSMA
Background
Common in many countries, infrastructure sharing can provide additional capacity in congested areas where space for sites and towers is limited and help to expand coverage in underserved geographical areas.
Infrastructure-sharing arrangements allow mobile operators to jointly use masts, buildings and even antennae, avoiding unnecessary duplication. It has the potential to strengthen competition and reduce the carbon footprint of mobile networks while also reducing costs for operators.
As with spectrum-trading arrangements, mobile infrastructure sharing has traditionally involved voluntary cooperation between licensed mobile operators based on their commercial needs.
Debate
Should regulators oversee, approve or manage infrastructure-sharing arrangements?
What role should governments play in the development and management
of core infrastructure?
Industry position
Governments should have a regulatory framework that allows voluntary infrastructure sharing among mobile operators.
While it may, at times, be advantageous for mobile operators to share infrastructure, network deployment remains an important competitive advantage in mobile markets. Any sharing should therefore be the result of commercial negotiation, not mandated or subject to additional regulatory constraints or fees.
National regulatory frameworks should facilitate all types of infrastructure-sharing arrangements. This can include sharing various components of mobile networks, including so-called passive and active sharing. In some cases, site sharing (a type of passive sharing) increases competition by giving operators access to sites that are necessary to allow them to compete on quality of service and coverage.
Infrastructure-sharing agreements should be governed by commercial law and, as such, be subject to assessment under general competition law.
Access to government-owned trunk assets should be available on non-discriminatory commercial terms at a reasonable market rate.
Resources
Unlocking Rural Coverage: Enablers for Commercially Sustainable Mobile Network Expansion, GSMA, July 2016
Background
Mobile termination rates (MTRs) are the fees charged by mobile operators to connect a phone call originating from a different network. Setting regulated MTRs continues to be a focus of regulators in both high- and low-income countries, and many different approaches have been developed to calculate appropriate termination charges.
Regulators have generally concluded that the provision of call termination services on an individual mobile network is, in effect, a monopoly. Therefore, with each mobile operator enjoying significant market power, regulators have developed various regulations and the most notable is the requirement to set cost-oriented prices for call termination.
Debate
How should an appropriate regulated rate for call termination be calculated?
Is the drive towards ever-lower mobile termination rates a productive and appropriate activity for regulators?
Once termination rates have fallen below a certain threshold, is continued regulation productive?
What is the long-term role of regulated termination rates in an all-IP environment?
Industry position
Regulated mobile termination rates should accurately reflect the costs of providing termination services.
Evidence suggests that reductions in MTRs are not beneficial after a certain point. The setting of regulated MTRs is complex and requires a detailed cost analysis, as well as careful consideration of its impact on consumer prices and, more broadly, on competition.
MTRs are wholesale rates, regulated in many countries where a schedule of annual rate changes has been established and factored into mobile operators’ business models. Unsignalled, unanticipated alterations to these rates have a negative impact on investor confidence.
The GSMA believes the setting of MTRs is best done at a national level where local market differences can be properly reflected in the cost analysis. Therefore, extraterritorial intervention is not appropriate.
Background
While there is no single definition of net neutrality, it often refers to issues concerning the optimisation of traffic over networks. Advocates assert that all traffic carried over a network should be treated equally, but others contend that offering different service levels for different applications enhances the user experience.
Where this flexibility exists, mobile operators can offer a bespoke, managed service to providers of new connected products, such as autonomous cars. This could not exist without constant, high-integrity connectivity. Operators can also enter commercial arrangements with content and application providers that want to attract users by offering free access – for example, by zero-rating their content so mobile subscribers are not ‘charged’ for data usage. These kinds of arrangements support product and service innovation, deliver added value to consumers and generate new revenue for mobile operators, which face constant pressure to enhance, extend and upgrade their networks.
Mobile operators face unique operational and technical challenges in providing fast, reliable internet access to their customers due to the shared use of network resources and limited available spectrum. Unlike fixed broadband networks, where a known number of subscribers share capacity, the capacity demand at any given cell site is much more variable and the number and mix of subscribers is constantly changing, often unpredictably. The available bandwidth can also fluctuate due to variations in radio frequency signal strength and quality, which can be affected by weather, traffic, speed and the presence of interfering devices, such as wireless microphones.
Not all traffic puts equal demand on a network. For example, voice traffic is time-sensitive and video streaming typically requires large amounts of bandwidth. Networks need to be managed in a way that accommodates all types of traffic and supports innovations with 5G and IoT. The principle of the open internet, and allowing operators to offer their customers a variety of service options, are not mutually exclusive. As the net neutrality debate has evolved, policymakers have come to accept that network management plays an important role in service quality.
Debate
Should networks be able to manage traffic and prioritise one traffic type or application over another?
For mobile networks, which have finite capacity, should fixed-line rules apply?
In some cases, net neutrality rules are being considered in anticipation of a problem that has yet to materialise. Is this an appropriate approach to regulation?
Industry position
Mobile operators need to be able to actively manage network traffic to meet the different needs of consumers.
It is important to maintain an open internet. To ensure it remains open and functional, mobile operators need the flexibility to differentiate between different types of traffic.
Regulation that affects how operators handle mobile traffic is not required. Any regulation that can limit their flexibility to manage quality of service from end to end and provide consumers with a satisfactory experience is inherently counterproductive.
Regulators should recognise the differences between fixed and mobile networks, including technology differences and the impact of radio frequency characteristics.
Consumers should have the ability to choose between competing service providers by comparing performance differences in a transparent way.
Mobile operators compete in many areas, including pricing of service packages and devices, different calling and data plans, innovative applications and features and network quality and coverage. The high degree of competition in the mobile market provides ample incentives to ensure customers enjoy the benefits of an open internet.
Resources
Background
Many mobile operators share infrastructure on commercial terms to reduce costs, avoid unnecessary duplication and expand coverage cost-effectively in rural areas. The most commonly shared infrastructure is passive infrastructure, which may include land, rights of way, ducts, trenches, towers, masts, dark fibre and power supplies, all of which support the active network components required for signal transmission and reception.
Infrastructure-sharing is arranged through bilateral agreements between mobile operators to share specific towers, through strategic sharing alliances, through the formation of joint infrastructure companies between mobile operators or via independent companies providing towers and other passive infrastructure.
Increasingly, independent tower companies provide tower-sharing facilities to mobile operators. Several countries have established regulatory frameworks based on registration that encourage passive infrastructure-sharing arrangements and provide regulatory clarity for mobile operators and independent passive infrastructure providers. While regulatory authorities in almost all countries support passive infrastructure-sharing arrangements, there is a lack of regulatory clarity in some countries and particularly so in relation to independent tower companies.
Debate
What benefits do independent tower companies offer to mobile operators?
Should passive infrastructure sharing ever be mandated by a regulatory authority?
What steps should regulators take to provide clarity for tower companies and mobile operators?
Industry position
Licensed mobile operators should be able to share passive infrastructure with other licensed mobile operators and outsource passive infrastructure supply to passive infrastructure providers without seeking regulatory approval. Sharing passive infrastructure on commercial terms enables operators to reduce capital and operating expenditure without affecting investment incentives or their ability to differentiate and innovate.
Infrastructure-sharing provides a basis for the mobile industry to expand coverage cost-effectively and rapidly while retaining competitive incentives. Regulation of passive infrastructure- sharing should be permissive but not mandate such arrangements.
In markets with licensing frameworks that do not already provide for the operation of independent tower companies, regulatory authorities (or the responsible government department) should either permit independent passive infrastructure companies to operate without sector-specific authorisation or establish a registration scheme for such companies. The scheme should be a simple authorisation that provides for oversight of planning-related matters while making a clear distinction with the licensing framework that applies to electronic communications network and service providers.
Registered providers should be permitted to construct and acquire passive infrastructure that is open to sharing with mobile operators, provide (for example, sell or lease) passive infrastructure elements to licensed operators and supply ancillary services and facilities essential to the provision of passive infrastructure.
Mobile operators should be permitted to use infrastructure from passive infrastructure companies through commercial agreements without explicit regulatory approval. Infrastructure- sharing agreements should be governed by commercial law and, as such, be subject to assessment under general competition law.
Public authorities should provide licensed mobile operators and passive infrastructure providers with access to public property and rights of way on reasonable terms and conditions.
Governments seeking to support national infrastructure development should ensure swift approval for the construction of passive infrastructure, and environmental restrictions should reflect globally accepted standards.
Taxation and fees imposed on independent tower or passive infrastructure companies should not act as a barrier to the development of this industry, which makes more efficient, lower-cost forms of infrastructure supply possible.
Resources
Background
A public-private partnership (PPP) is a legal arrangement between two or more private-sector and public-sector parties to deliver a service via mutual investment. PPPs are common in infrastructure sectors such as telecoms where upfront investments are high and payback periods long.
PPPs can be an interesting mechanism to facilitate investment from different stakeholders and support the extension of network coverage in areas that would otherwise be risky investments with limited commercial potential. Governments view PPPs as a way to drive investment in areas without coverage and leverage the expertise of the private sector. In turn, private companies benefit from the certainty of a viable business model thanks to the investment and guarantees provided by the public partner. Large-scale
PPPs often attract the interest of multilateral organisations, which recognise the potential economy-wide benefits of such projects and are willing to support private companies and governments that lack the financial means to get these projects off the ground on their own.
In the telecoms sector, PPPs are found across all network segments:
- First mile: submarine cables, satellite hubs,internet exchange points (IXPs).
- Medium mile: fibre backbone and backhaul
- Last mile: radio access networks and wired local loops.
Debate
Are PPPs an effective way to accelerate the deployment of infrastructure and drive digital inclusion?
What alternatives do governments have to use their resources to catalyse investment?
What are the characteristics of a PPP that maximises positive impacts while minimising negative consequences?
Industry position
PPPs can be an effective way to deploy and operate network infrastructure in areas that do not have the economic potential to attract private investment. Public and private resources may support network deployment to deliver communications services directly to customers or provide the infrastructure to deploy commercially viable networks.
Governments should only consider PPPs in the most remote areas. Engaging with mobile operators and considering their roll-out plans is an essential part of the scoping phase because it prevents public investment from being wasted in areas where operators could have deployed networks on their own. Service delivery and customer engagement should be left to the private sector, which can provide the full suite of products and services to support digital inclusion.
Governments should only consider PPPs after exhausting all other policy and regulatory measures to maximise coverage through market- driven mechanisms. Creating an investment- friendly policy framework should be the first step in a coverage expansion strategy GSMA (2016), Unlocking Rural Coverage: Enablers for Commercially Sustainable Mobile Network Expansion. As second step, governments should consider giving mobile operators the same preferential conditions that PPPs often enjoy, such as subsidies, no-cost access to public infrastructure or less stringent quality-of-service obligations. This may be sufficient to create a favourable business case in remote areas.
When implementing a PPP, governments should avoid the single wholesale network (SWN) approach. SWNs are PPPs that do not observe the best practices outlined above. SWNs have a geographic scope that overlaps with commercial networks and monopolises important resources, such as spectrum. They create an uneven playing field, use valuable public resources inefficiently and have multiple implementation challenges (see the ‘Single Wholesale Networks’ section for more details).
Resources
Guidelines on State Aid for Broadband Networks, European Commission, 2023
Background
The quality of a mobile data service is characterised by a few important parameters: speed, packet loss, delay and jitter. It is also affected by factors such as mobile signal strength, network load and user device and application design.
Mobile operators must manage changing traffic patterns and congestion because these normal fluctuations result in customers experiencing different levels of service quality.
Connection throughput is viewed by some regulatory authorities as an important attribute of service quality. However, it is also the most difficult to define and communicate to users. Mobile throughput can vary dramatically over time, and throughput is not the only product attribute that influences consumer choice.
Debate
Is it necessary for regulators to set specific targets for network quality of service in competitive markets?
Is it possible to guarantee minimum quality levels in mobile networks that vary over time, depending on the volume of traffic being carried and the specific local signal- propagation conditions?
Which regulatory approach will protect the interests of mobile service customers while not distorting the market?
Industry position
Competitive markets with minimal regulatory intervention are best able to deliver the quality of mobile service that customers expect.Regulation that sets a minimum quality of service is disproportionate and unnecessary.
The quality of service that mobile consumers experience depends on many factors and some of these are beyond the control of mobile operators, such as the type of device, application and propagation environment. Defining specific quality targets is neither proportionate nor practical. Mobile networks are technically different from fixed networks because they make use of shared resources to a greater extent and are more traffic-sensitive.
Mobile operators need to deal with continually changing traffic patterns and congestion within a finite network capacity, where one user’s traffic can have a significant effect on overall network performance.
The commercial, operational and technological environment in which mobile services are offered is continuing to develop. Mobile operators must have the freedom to manage and prioritise traffic on their networks. Regulation that rigidly defines a particular service quality level is unnecessary and likely to affect the development of these services.
Competitive markets with different commercial offerings and information that allows consumers to make informed choices deliver the best outcomes. If regulatory authorities are concerned about service quality, they should engage in dialogue with the industry to find solutions that strike the right balance of transparency and quality of service.
Resources
The Quality of Mobile Services in Latin America, GSMA, February 2015
Background
Single wholesale networks (SWNs), also known as single-distributor, government-initiated monopolies or wholesale open access networks (WOANs), were implemented by some countries in the mid- to late-2010s. Considered by policymakers as an alternative to competitive mobile networks for the delivery of mobile broadband services in 4G or 5G, SWNs have become less popular.
Supporters of SWNs argued that they addressed certain concerns better than traditional network competition. These concerns generally included lack of coverage or inadequate competition in rural areas, inefficient use of radio spectrum, or fears that the private sector lacked incentives to maximise coverage or investment. However, SWNs have proven to be unsuccessful in solving any of these problems and have largely been abandoned for competition-based approaches.
Government-initiated network monopolies require mobile operators and others to rely on wholesale services from the SWN as they serve and compete for retail customers. While there are variations in the SWN proposals discussed and implemented by different governments, mobile operators are limited to providing broadband in one technology (4G or 5G) solely via the SWN in most cases.
Debate
Are SWNs likely to increase the quality and reach of next-generation mobile broadband, compared with the existing approach of network competition?
What alternative policies should be considered before adopting a monopoly wholesale network model?
Industry position
SWNs and WOANs are likely to lead to worse outcomes for consumers than network competition.
Although some supporters claim they provide greater network coverage than network competition, this is often because there are public subsidies and other forms of favourable support for SWNs that are not available to competing mobile operators, making it an unfair comparison. Commercial networks can deliver coverage even in areas where duplicate networks are not economical. This can be achieved in many ways, including through voluntary network sharing among mobile operators.
The benefits of network competition go beyond coverage. Innovation is a key driver of consumer value at the national level and this occurs in networks, services and devices. While mobile technologies are typically developed at the international level, the speed at which they become available to consumers depends on national policies and market structures.
In practice, government-mandated wholesale networks have been much slower to expand coverage, perform upgrades and embrace new technologies.
Rather than use public funds to create a separate network to deliver coverage in areas commercial networks have not found it viable to cover, an alternative approach is to consider how public funds might be used to subsidise a commercial network provider to expand coverage to these areas.
Resources
Policy Trends in the Aftermath of Single Wholesale Networks, GSMA, 2023
Background
Mobile telecommunications have a positive impact on economic and social development, creating jobs, increasing productivity and improving the lives of citizens. Despite these beneficial outcomes, many countries impose mobile-specific taxes on consumers and operators. These include special communication taxes, such as excise duties on mobile handsets and airtime usage, and revenue-share levies on mobile operators. Some countries have applied a surcharge on international inbound call termination (SIIT), which can increase international call prices and effectively act as a tax on citizens of other countries. These taxes have placed a disproportionate tax burden on the mobile sector, which can prevent countries from reaping the full benefits of mobile technology.
Debate
Do sector-specific taxes deliver short-term government income at the expense of longer-term additional revenues that could be accrued through increased economic growth?
Industry position
Governments should reduce or remove mobile- specific taxes because the social impact and long-term positive impact on GDP (and, hence, tax revenues) will outweigh any short-term reduction in contributions to government budgets. Taxes should align with internationally recognised principles of effective tax systems. In particular:
- Taxes should be broad-based. Different taxes have different economic properties and, in general, broad-based consumption taxes are less distortionary than taxes on income or profit.
- Taxes should account for sector and product externalities.
- The tax and regulatory system should be simple, easily understandable and enforceable.
- Dynamic incentives for operators should not be affected – taxation should not disincentivise efficient investment or competition in the ICT sector.
- Taxes should be equitable and the burden of taxation should not fall disproportionately on lower-income members of society.
Discriminatory, sector-specific taxes deter uptake of mobile services and can slow adoption of ICT. Lowering such taxes benefits consumers and businesses and boosts socio-economic development. Governments often levy special taxes to finance spending in sectors where private investment is lacking. However, this approach is inefficient. Fiscal policy that applies a special tax to the telecommunications sector causes distortions that discourage private spending and prevent the positive spillovers of mobile throughout the economy, ultimately diminishing social and economic welfare.
Emerging economies need to align their approach to taxing mobile broadband with national ICT objectives.
If broadband connectivity is a key social and economic objective, taxes must not create an obstacle to investment in broadband networks or to consumer adoption and use of mobile broadband. Lowering the tax burden on the sector, increases mobile uptake and use, creating a multiplier effect across the wider economy.
Taxing international calls has a negative impact on consumers, businesses and citizens abroad, damaging a country’s competitiveness.
Resources
Mobile Tax Policy and Digital Development: A Study of Markets in Sub-Saharan Africa, GSMA, October 2023
Rethinking Mobile Taxation to Improve Connectivity, GSMA, February 2019
Background
A policy goal of many governments, universal service refers to telecommunications service that is available, accessible and affordable for everyone.
Several countries have established Universal Service Funds (USFs) to extend coverage to areas that are not commercially viable for the private sector. USFs are typically funded by levies on telecommunications sector revenues and the funds are disbursed either through direct subsidies or competitive bidding. USFs can also provide non-financial support to connectivity initiatives.
Despite these goals, USFs often perform poorly and countries with USFs have typically not experienced stronger internet growth. Studies by the GSMA and the International Telecommunication Union (ITU) show that disbursement rates remain very low around the world and many funds have been unable to distribute any of the levies collected.
When not administered effectively, USFs can be counterproductive. By effectively taxing telecommunications customers, services become less affordable.
Debate
What policies and processes need to be in place to ensure USF financial resources are transparent and used efficiently?
What alternative strategies can governments employ to enable the private sector to expand connectivity?
How relevant are USFs in mature markets?
Industry position
USFs should only be considered once all policy and regulatory measures to maximise coverage through market-driven mechanisms have been exhausted and after careful assessment of alternative mechanisms, such as coverage obligations and reverse spectrum auctions.
Reducing costs and regulatory barriers is critical to expanding mobile connectivity. Importantly, governments can help by removing sector-specific taxes, stimulating demand and developing infrastructure.
In markets where they already exist, USFs should be targeted, time-bound and managed transparently.
Alternative funding mechanisms should be considered to ensure a broad base of stakeholders contribute to USFs, not just mobile operators. The allocation of funds, in consultation with the mobile industry, should be competitive and technology-neutral, and should target projects with the greatest possible impact. USFs should have:
- Clear targets that ensure effective and timely disbursement of funds.
- Continuous evaluations, annual reporting and regular independent audits of government administration to ensure transparency in fund financing, disbursements and operations.
- Solid, clear and transparent underlying legal frameworks that support flexible services and technology neutrality.
- An independent fund structure to avoid political interference.
- Effective administration that avoids excessively bureaucratic structures or insufficient oversight.
- A thorough analysis of investment gaps and the impact of introducing levies on affordability and adoption to set appropriate USF levies.
- Consideration of a pay-or-play model by which mobile operators can choose to make a financial contribution to the USF or implement projects that meet the fund’s goals.
- Regular consultation with mobile operators to ensure investments in coverage are targeted efficiently, include operational expenditure subsidies where necessary and avoid duplication of infrastructure.
If USFs cannot be managed efficiently within a reasonable time frame, a plan should be implemented to phase them out.
Resources
The Impact of Universal Service Funds on Fixed-Broadband Deployment and Internet Adoption in Asia and the Pacific, UN ESCAP, 2016
Universal Service Funds in Africa, 2023