Business Hilights
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Spectrum pricing in Nigeria, developing nations linked to data scarcity—Report

A new report unveiled by GSMA has indicted telecoms regulatory agencies in Nigeria and other developing nations as being behind the current exorbitant cost of data access at a time knowledge economy is holding sway in developed nations.

The report titled: ‘Spectrum Pricing in Developing Countries’, released by the Association, in Kigali, Rwanda, at the ongoing GSMA Mobile 360 – Africa conference, suggested that spectrum prices in developing countries are, on average, more than three times higher than in developed countries, when income is taken into account.

GSMA observed that stressed that 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.

Otherwise, the report has vindicated several telecoms outfits in Nigeria, but MTN who did not partake in the recent auction of 2.6Mhz which MTN Nigeria cleared almost half of the total slots up for grabs.

However, the regulator, Nigerian Communications Commission (NCC) hurriedly call a stakeholders’ meeting where it was told that the Spectrum pricing was not affordable even though only company was able to bid and win six slots.

Accordingly, NCC smartly noted that it will study the circumstances surrounding the apathy and come up with a workable solution and pricing template that will be attractive to the industry players. That is yet to be done more than 10 months on.

The report argued that 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.

In the wisdom of the report, there is a marked relationship 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.

In his remarks, Head of Spectrum at GSMA, Mr. Brett Tarnutzer, observed that “Connecting everyone becomes impossible without better policy decisions on spectrum.

“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.”

Business Hilights gathered that 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.