[July 17, 2018] |
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GSMA Finds That Consumers in Developing Countries Are Hard Hit by High Spectrum Prices
Better spectrum pricing policies are needed in developing countries to
improve the economic and social welfare of the billions of people that
remain unconnected to mobile broadband services, according to a new
report, 'Spectrum Pricing in Developing Countries', released by the GSMA (News - Alert)
today at the Mobile 360 - Africa conference in Kigali. The study reveals
that spectrum prices in developing countries are, on average, more than
three times higher than in developed countries, when income is taken
into account. This high spectrum pricing is a major roadblock to
increasing mobile penetration.
Authored by GSMA Intelligence, the study also found that governments are
playing an active role in increasing spectrum prices to maximise state
revenues from spectrum licensing. High spectrum prices are linked to
countries with high levels of sovereign debt, and alarmingly average
reserve prices in spectrum auctions are more than five times higher in
developing countries than in developed, once income is accounted for.
The report also identifies a link between high spectrum prices and
poorer coverage, as well as more expensive and lower quality mobile
broadband services, all of which hinder the take-up of services by
consumers.
"Connecting everyone becomes impossible without better policy decisions
on spectrum," said Brett Tarnutzer, Head of Spectrum (News - Alert), GSMA. "For far too
long, the success of spectrum auctions has been judged on how much
revenue can be raised rather than the economic and social benefits of
connecting people. Spectrum policies that inflate prices and focus on
short-term gains are incompatible with our shared goals of delivering
better and more affordable mobile broadband services. These pricing
policies will only limit the growth of the digital economy and make it
harder to eradicate poverty, deliver better healthcare and education,
and achieve financial inclusion and gender equality."
The GSMA study assessed over 1,000 spectrum assignments across 102
countries (including 60 developing and 42 developed countries) from 2010
through 2017, making it the largest-ever analysis into spectrum pricing
in developing countries, as well as the drivers and their potential
impacts of spectrum pricing on consumers. Among the countries included
in the analysis are Algeria, Bangladesh, Brazil, Colombia, Egypt, Ghana,
India, Jordan, Mexico, Myanmar and Thailand - all markets where spectrum
licensing is a priority.
Setting high final prices administraively or setting high auction
starting prices (e.g. reserve prices), artificially limiting the amount
of licensed spectrum available, not sharing a clear spectrum roadmap,
and setting poor auction rules are some of the policy decisions
highlighted in the report that are driving high spectrum prices in
developing countries.
GSMA Intelligence Releases Latest Mobile Connectivity Index
In related news, GSMA Intelligence today launched its latest Mobile
Connectivity Index, which measures the performance of 163 countries
(representing 99 per cent of the world's population) against key
enablers of mobile internet adoption. The Index highlights recent
progress made on widening access to the mobile internet and explores key
roadblocks to adoption, including spectrum policy.
At the end of 2017, 3.3 billion people (or 44 per cent of the global
population) were connected to the mobile internet, representing an
increase of almost 300 million compared to the previous year. That still
leaves more than 4 billion people offline and unable to realise the
social and economic benefits that the mobile internet enables. The
majority of people that remain unconnected - 3.9 billion - live in
developing countries.
Mobile broadband networks still do not cover 1 billion people globally,
and approximately 3 billion people who live within the footprint of a
network are not currently accessing mobile internet services. In
low-income countries, around two thirds of rural populations are not
covered by 3G networks. The Mobile Connectivity Index highlights the
importance of factors such as the affordability and quality of mobile
broadband services, and network investment in connecting people, both of
which can be impacted by high spectrum prices.
"If mobile operators don't get affordable and predictable access to
spectrum, it will be consumers who will suffer the most," said Pau
Castells, Director of Economic Analysis at GSMA Intelligence.
"Developing countries have the opportunity to catch up with the
developed on mobile adoption; however the investment case in some of
these markets is being put at risk. Operators cannot keep paying
significantly more for spectrum when consumer incomes and expected
profits are much lower in these markets. This is making network
investment challenging at a time when policies should encourage the
development of the mobile sector to maximise the benefits it can bring
to everyone."
The 'Spectrum Pricing in Developing Countries' report is available here
in English and its key findings here
as an infographic.
The latest Mobile Connectivity Index is available here.
-ENDS-
About the GSMA
The GSMA represents the interests of mobile operators worldwide, uniting
nearly 800 operators with more than 300 companies in the broader mobile
ecosystem, including handset and device makers, software companies,
equipment providers and internet companies, as well as organisations in
adjacent industry sectors. The GSMA also produces industry-leading
events such as Mobile World Congress (News - Alert), Mobile World Congress Shanghai,
Mobile World Congress Americas and the Mobile 360 Series of conferences.
For more information, please visit the GSMA corporate website at www.gsma.com.
Follow the GSMA on Twitter (News - Alert): @GSMA.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180716005656/en/
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