Report Finds Negative Impacts of High Spectrum Prices on Consumers

The GSMA, the mobile operators body, has issued a report with the main finding that the negative impacts of high spectrum prices on consumers “can no longer be disputed”. The report, titled “The impact of spectrum prices on consumers”, says that countries with poor spectrum policies – which either inflate spectrum or delay spectrum assignments – “are leading to millions of people being left unable to access mobile broadband services or experiencing reduced network quality”. “Spectrum auctions can’t be viewed as cash cows anymore,” said Brett Tarnutzer, the GSMA’s head of spectrum. “Any government that prices spectrum to maximise revenue now does so with full knowledge that its actions will have negative repercussions on citizens and the development of mobile services. We now have clear evidence that shows by restricting the financial ability of operators to invest in mobile networks millions of consumers are suffering.”

The GSMA study is claimed to be the first to provide strong evidence to directly link high spectrum prices, and certain other spectrum management practices, to negative consumer outcomes, such as slow network rollout, reduced quality of service and poor mobile coverage.

The key findings for the period analysed from 2010 to 2017 are that in developed countries, high spectrum costs played a significant role in slowing the rollout of 4G networks and drove a long-term reduction in 4G network quality; in developing countries, spectrum prices were, on average, almost three times more expensive than in developed countries in relation to expected revenues, and in these countries, high spectrum costs slowed down the rollout of both 3G and 4G networks and drove long-term reductions in overall network quality; and in the countries studied with the highest spectrum prices, the average mobile operator’s 4G network would cover 7.5% more of the population if they had acquired spectrum at the median spectrum price.

Further, the timing of spectrum awards had a significant impact on mobile coverage, and the amount of spectrum licensed to operators had a significant impact on network quality. The report is available here.