GSMA says poor spectra sharing leaves 4bn offline

Unfavourable spectrum policy is leaving close to 4 billion people around the world offline and hindering digital inclusion, says a report by mobile network association GSMA.

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, the association said.

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.

The study also found that governments are playing an active role in increasing spectrum prices to maximise state revenues from spectrum licensing. GSMA said average reserve prices in spectrum auctions are alarmingly large — more than five times higher in developing countries than developed ones, 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 head of spectrum Brett Tarnutzer. “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 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, Mr Tarnutzer said.

Setting high final prices administratively or setting high auction starting prices (i.e. reserve prices), artificially limiting the amount of licensed spectrum available, not sharing a clear spectrum roadmap and setting poor auction rules all hinder digital development, the GSMA said.

At the end of 2017, 3.3 billion people (or 44% of the global population) were connected to the mobile internet, representing an increase of almost 300 million from 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 live in developing countries.

Mobile broadband networks still don’t cover 1 billion people globally, and about 3 billion people who live within the footprint of a network aren’t accessing mobile internet services.

In low-income countries, about twothirds of rural populations aren’t covered by 3G networks, the GSMA said.

“Developing countries have the opportunity to catch up with the developed world on mobile adoption, but [investment] in some of these markets is being put at risk,” said Pau Castells, director for economic analysis at GSMA Intelligence. “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, he said.

The GSMA study assessed over 1,000 spectra assignments across 102 countries.