5G is taking its first steps in the Sub-Saharan Africa region, and with a successful mid-band assignment Kenya is positioning the country as a pioneer. But to maximise 5G’s socio-economic benefits, more spectrum is needed in the coming years.
The last couple of years has highlighted the increasing importance of digital technology and mobile connectivity. Already, a third of people in Sub-Saharan Africa will use mobile internet by the end of 2022, rising to nearly 40% by 2025. Also, smartphones will account for almost two-thirds of connections in Sub-Saharan Africa by 2025. Kenya is projected to be among the top three markets, with 52 million smartphone connections expected, according to GSMA Intelligence.
Expanding this potential and creating a digitally enabled society requires progressive policy measures. They are needed support network investments and improve the affordability of digital services for consumers. A good example is the Communication Authority of Kenya (CA) work to successfully assign the 2600 MHz band to MNOs, a move that GSMA supports. The regulator achieved this through an administrative process (beauty contest) which saw Safaricom and Airtel assigned 60 MHz each for a license duration of 15 years.
The assignment ushers in the 5G era in Kenya, providing access to critical mid-band spectrum crucial for the successful rollout of 5G as it provides city-wide traffic capacity. Mid-band spectrum also opens up opportunities in areas such as healthcare, digital commerce, industrial automation and smart city infrastructure.
However, 2 GHz in mid-bands is needed by 2030, and the CA still has to consider assigning additional contiguous spectrum in prime 5G spectrum bands. Progress on the 3.5 GHz range is promising, but other bands such as 6 GHz are also needed.
The reward for reaching the 2 GHz goal is substantial. 5G growth in the SSA region is expected to develop rapidly in the second half of the decade and continue into the 2030s. The economic impact of mid-band 5G will be around 0.4% of GDP in 2030 – already higher as a percentage of GDP than in Europe and North America. The overall GDP impact (also in 2030) will be $13bn.
Successful spectrum assignments aren’t just about the amount of spectrum made available. It is interesting to note that a spectrum assignment through administrative process has its place in Kenya and Sub-Saharan Africa. While there is no single best assignment approach, a licensing framework should:
- Ensure operators have access to sufficient spectrum.
- Provide predictability to support the new network investment needed.
- Avoid costly restrictions on the use of spectrum beyond those needed to manage interference.
Instead, there is a need to assess the merits of the different assignment techniques on a case-by-case basis. Some of the benefits of spectrum assignment through a successful administrative process are:
- Enables a range of criteria to be considered and for authorities to balance the trade-off between objectives.
- Authorities can select a sustainable level of the licence fee, which improves operators’ ongoing financial viability and assist in raising capital for short-, mid- and long-term network investments.
- Ability to set network investment or coverage requirements to focus on delivering high-quality services rather than raising state revenues.
- Can be quick and affordable to organise.
While the Kenyan assignment was a success, it is important for countries that are considering a similar approach to keep in mind potential pitfalls. For example, a lack of transparency can lead to delays and failed outcomes.
Earlier this year, the GSMA published an updated paper on best practice in mobile spectrum licensing. It looks at a variety of major policy issues, including different approaches to licensing, pricing, license terms and conditions, and how the right policies can help encourage growth.
Kenya’s boost to 5G can pave the way for countries in the region starting their roadmap processes. A strategic vision of spectrum requires long-term policies in dialogue with the industry and with the expansion of socio-economic benefits as a priority.