India’s Ministry of Finance’s new stance on 5G spectrum pricing is a big step forward as the country looks to build one of the best digital infrastructures in the world. But hopefully, it can also be a rallying cry for treasuries around the world to prioritise the socioeconomic benefits of affordable and innovative mobile services over short-term monetary gains.
A report published by the ministry on 30 April underscores the importance of providing “inclusive and affordable 5G services to all sections of the population in the country is important to achieve,” to realise India’s national digital communications policy (NDCP) goals. However, to make this happen “authorities should rationalise all elements of spectrum pricing for the auction, including base price, period of payment of charges and interest rates,” it adds.
The effects of expensive 5G spectrum
We at the GSMA wholeheartedly backs this message and commends the ministry for its progressive views. A study we published in September last year confirms that countries with poor spectrum policies – which either inflate spectrum or delay spectrum assignments – are leaving millions of people unable to access mobile broadband services or with reduced network quality. This is true not only for 5G but for any mobile technology.
The GSMA study, titled ‘The Impact of Spectrum Prices on Consumers’, provides strong evidence to directly link expensive spectrum, and certain other spectrum management practices, to negative consumer outcomes. These include slow network rollouts, reduced quality of service and poor mobile coverage. In short, the speed, reach and quality of 5G services depends on governments and regulators supporting timely access to the right amount and type of affordable spectrum, under the right conditions.
The positive impact of 5G
When done right, 5G helps drive revolutionary new applications across many sectors around the world. Areas such as fixed broadband, industrial automation, health care, intelligent transport systems, and virtual reality can all help improve environmental and economic prosperity in all parts of the world. The first generation of commercial 5G networks shows what great potential the technology has. They have already caught the imagination of users. By 2034, all this adds up to an economic impact of $2.2 trillion, according to the study.
When we published the study, it came with a word of warning: any government that prices spectrum to maximise revenue now does so with the full knowledge that its actions will have negative repercussions on citizens and the development of mobile services. That is still true, maybe even more so as the ramifications the COVID-19 pandemic impacts all aspects of society.
Government agencies, like India’s Ministry of Finance, that are willing to consider the overall cost of spectrum with new eyes, are rewarded with connectivity that can enable its people, economy, and society to thrive. For anyone who is committed to sustainable development, this is a great way to enable progress.
Read more about spectrum pricing here, and 5G spectrum here.