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Spectrum as a means of income hurting Nigeria— GSMA

…As fate of 2.6MHz continues to hang

The Global System of Mobile Telecommunications Association (GSMA), in its critical presentation at the just concluded ITU Telecom World 2019, in Budapest, Hungary has said many economies that considered licensing of spectrum as means of income will end up hurting itself.

The telecoms grand masters of industry research argued that countries with poor spectrum policies, which either inflate spectrum or delay spectrum assignments will end up forcing their people to be left out in digital world as millions will be left unable to access mobile broadband otherwise, the group averred that millions of people of people in economies that considered auctioning frequencies as a huge means of income will continue to experience poor internet quality as investors will continue to look for nations where licensing rounds are salutary.

GSMA made it clear that the negative impacts of high spectrum prices especially in economies where their governments see the resource as huge opportunity to rake in revenue will trickle down to high internet access charges by service providers’ which will further amount to poor access and affordability.

GSMA’s Head of Spectrum, Brett Tarnutzer in his presentation warned that “Spectrum auctions can’t be viewed as cash cows,” adding; “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.”

His point can easily be used to explain what transpired in Nigeria during the auctioning of 2.6MHz when it was only MTN, with its apparent deep pocket in the system, won six of the slots as others disappeared in the radar of the licensing.

At a stakeholders’ forum organized by the regulator, the Nigerian Communications Commission (NCC) in Lagos, operators other than MTN which was not represented, argued that the auctioning was only programmed by the regulator to favour deep pocket players which is only MTN as at then.

In its final remarks, NCC agreed that not only was the auctioning skewed to favour deep pocket operators, but it is going to make amends in its pricing template and carry out another round of auctioning.

Unfortunately, the regulator has not been able to do anything since then and has remained incommunicado on the matter more than two years on.

Business Hilights gathered that the GSMA study is 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 in both developed and developing countries are; 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. 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.

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