Telecom
High Spectrum Prices Inimical to Social Welfare in Developing Countries – Study
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 yesterday 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, 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 administratively 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.
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.
“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,” said Pau Castells, Director of Economic Analysis at GSMA Intelligence.
As Africa continues to face internet disruptions, telecom leaders have urged governments and regulators to embrace and implement a Model Framework for Building Regional Internet Resilience.
The African Telecommunications Union (ATU), Internet Society, and African Network Information Centre (AFRINIC) have all endorsed the framework.
The framework organises Africa’s internet resilience challenge around three interdependent focus areas: networks and internet service providers (ISPs), critical infrastructure such as power grids and cables, and market conditions that influence affordability and demand, according to the organisations in a joint statement.
Once implemented, entities or operators responsible for an important part of a country’s internet ecosystem, such as electricity utilities, mobile network operators, ISPs, internet exchange points, or a country-code top-level domain registry, must develop a resilience plan within one year of the framework’s official adoption.
The statement also mentions several past disruptions that hampered communication, such as the West Africa Cable System failure in March 2024, which cut off 13 countries for days.
They went on to explain that the plan must be evaluated and updated on an annual basis and be compatible with the entity or operator’s continuity and reconstitution plans.
It (framework) should also specify how the organisation intends to incorporate the resilience features of redundancy, resourcefulness, rapid recovery—all of which are critical components of achieving overall robustness—into its operations.
ATU has warned that every blackout is a flashing red warning, and that the framework would act as an insurance policy against outages.
“Connectivity remains Africa’s nervous system and when it stutters, schools, hospitals and markets stutter too. This framework is our insurance policy against digital darkness”, said John Omo, secretary general of ATU.
Arthur Carindal, AFRINIC’s head of stakeholder engagement, commended the institutions for their coordinated efforts.
He said: “It is a great honour for AFRINIC to collaborate with ATU and ISOC in transformative initiative enabling all stakeholders to participate in developing Africa’s internet resilience model framework, which highlights key policy recommendations and best practices for strengthening internet infrastructure in Africa.”
Nigerian Communications Commission (NCC) has reiterated its commitment to the full operationalisation of President Bola Ahmed Tinubu’s Executive Order on Critical National Information Infrastructure (CNII), which designates telecommunications facilities as critical national assets deserving optimal protection.
This comes on the heels of a successful mediation led by the Office of the National Security Adviser (ONSA), in collaboration with the Commission, which resulted in the suspension of a planned strike by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA).
The strike, if carried out, would have disrupted the supply of diesel to telecommunications sites nationwide, severely affecting network operators’ ability to power their diesel-driven generators and maintain uninterrupted connectivity.
In the days leading up to the resolution, the ONSA, under the leadership of the National Security Adviser (NSA), Mallam Nuhu Ribadu, held strategic engagements with NOGASA’s leadership, with the Commission providing technical and regulatory guidance to highlight the potential implications of service disruptions on national security, the economy, and everyday life.
The discussions culminated in an agreement to call off the industrial action, averting what could have been a nationwide disruption of telecom services.
“Telecommunications infrastructure is the backbone of our connectivity and digital economy. Any disruption, whether through vandalism, accidental damage during construction work, theft of equipment, denial of access to maintenance teams, or interruptions in the supply of essential operational materials, has far-reaching implications for service delivery, economic stability, and national security,” the NSA said.
The Commission expressed appreciation to the ONSA for its leadership and dedication to protecting national assets and commended the maturity and understanding demonstrated by relevant stakeholders in recognising the national importance of telecommunications services.
Commenting on the development, the Executive Vice Chairman/Chief Executive Officer of the Commission, Dr. Aminu Maida, stated: “We will continue to enforce strict compliance by our licensees with technical standards for the deployment and maintenance of telecommunications infrastructure, while working closely with relevant stakeholders to strengthen awareness and cooperation on their protection.
“We also recognise mediation as an effective tool for building consensus among stakeholders. This resolution underscores the importance of dialogue in preventing avoidable service disruptions. Ultimately, we call on all Nigerians to regard telecom infrastructure as a shared national asset, one that underpins our ability to connect with loved ones, transact businesses, access healthcare, pursue education, and participate in the global digital economy.”
The Commission reaffirmed that it would continue to coordinate with security agencies, industry stakeholders, and the public to ensure that Nigeria’s telecommunications infrastructure remains protected, resilient, and reliable for all.
Active internet subscriptions across mobile, fixed, and VOIP networks in Nigeria dropped to 141.1 million in June, representing a 0.3% decline from the 141.5 million recorded in May, according to the latest statistics from the Nigerian Communications Commission (NCC).
Mobile network operators MTN, Airtel, Globacom, and 9mobile maintained their dominance with a combined 140.6 million subscriptions, leaving Internet Service Providers and others with 528,633 subscriptions at the end of June.
Despite the slight drop in subscriptions, data consumption continued to grow. Nigerians used 1.044 million terabytes of data in June, marginally higher than the 1.043 million terabytes recorded in May, which had been the highest monthly usage since January 2023.
Telecom operators say this surge in data usage is driven by the rapid growth of Nigerian cities, especially Lagos, where more people, businesses, and devices are fueling record bandwidth consumption. In response, operators are expanding capacity to meet the rising demand.
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