Spectrum pricing is about more than the treasury’s bottom line

This blog post was written by Peng Zhao, Spectrum Policy Director at the GSMA

When it comes to mobile services, the main goal of governments around the world should be to get most out of its mobile spectrum resources. To help make this clear, the GSMA’s spectrum team has developed ten positions on the importance of fair pricing.

The issue of getting spectrum pricing right has never been more vital. Additional spectrum is central to expanding and upgrading mobile broadband services. 5G’s success depends on it.

To deliver affordable, high quality mobile broadband services, operators require fair access to sufficient radio spectrum.

As a result, governments and regulators should carefully manage mobile spectrum, which in turn supports a vibrant digital economy. Sometimes this includes charging a price for access to spectrum to encourage efficient use. However, evidence shows that when prices are too high, consumers suffer.

Read the full position paper here

The positions are based on an in-depth report published earlier this year. The “Effective Spectrum Pricing” report, developed in collaboration with NERA Economic Consulting, links high spectrum prices to more expensive, lower quality mobile broadband services.

The study also estimates that, due to the increased data prices, consumers lost out on economic benefits worth US$250 billion across selected markets. Average final prices paid in auctions rose by 250 per cent from 2008 to 2016 with the most exorbitant price tags often influenced by policy decisions.

The report also found that although price outcomes for some spectrum awards remain moderate, the upward trend in average prices was driven by a growth in the number of exceptionally high price auction outcomes.

To make the most of spectrum resources, it is important governments and regulators adopt an approach that have benefits that go beyond the treasury’s bottom line.

Here are the GSMA’s key spectrum pricing positions:

1. High spectrum prices threaten affordable, high quality mobile broadband services

2. Governments should prioritise improved mobile broadband services – above revenue maximisation – when awarding spectrum

3. Avoid limiting the supply of mobile spectrum and award spectrum as soon as the market require it.

4. Publish long-term spectrum award plans and hold open consultations

Read the full position paper here.

And you can find the GSMA’s reports on spectrum pricing here.