Background on GSMA and its Relevance
The GSMA, or the GSM Association, is a global organization representing mobile network operators. It plays a crucial role in shaping the mobile industry’s policies and advocating for better connectivity worldwide. Given its extensive network of members, the GSMA’s recommendations carry significant weight and influence decision-making processes in telecommunications.
Spectrum Price Pressure and its Impact on Operators
According to the GSMA, spectrum prices have increased considerably as a percentage of operators’ revenues. This growing burden limits their capacity to invest in critical network infrastructure, including 4G and 5G networks.
Spectrum Costs vs. Operator Revenues
The GSMA’s “Global Spectrum Pricing Report” reveals that, although both consumer mobile service prices and average spectrum costs have decreased, the overall economic burden on mobile network operators has risen dramatically. Currently, global spectrum costs account for 7% of operators’ revenues, marking a 63% increase over the past decade.
Decreasing Revenue per MHz
Meanwhile, the average revenue generated by each Megahert (MHz) of spectrum has dropped by 60% over the same period. Although costs per MHz have decreased by up to 75% in certain bands since 2014, operators have increased their spectrum reserves by 80% to meet growing bandwidth demands. This has resulted in a higher total cost.
Impact on Consumers and Digital Economies
As a result, while a gigabyte of data is now more affordable than a decade ago, operators have experienced a 96% decline in revenue per GB between 2014 and 2024. This decline, combined with the proportionally high cost of acquiring spectrum, restricts operators’ ability to invest in expanding and improving mobile networks.
GSMA’s Call for Affordable Spectrum Prices
Vivek Badrinath, GSMA’s Director General, emphasized the importance of mobile industry for digital economies, enabling services and opportunities that transform lives. However, he noted that high spectrum costs could hinder investment at a time when affordable and reliable connectivity is more critical than ever.
Policy Recommendations
Badrinath urged governments and regulatory bodies to prioritize spectrum pricing that reflects market realities and fosters long-term digital growth. By ensuring affordable spectrum, they can accelerate network expansion, improve service quality, and promote greater digital inclusion for all citizens.
Spectrum Pricing Influenced by Public Policy
The Global Spectrum Pricing Report also highlights how public policy decisions have contributed to inflated spectrum costs. In some countries, these costs can account for up to 25% of operators’ revenues.
Upcoming License Expirations Present Opportunity
With nearly 1,000 spectrum licenses set to expire worldwide by 2030, the GSMA sees these upcoming renewals as a crucial opportunity to reassess pricing policies and drive investment in the next generation of mobile networks.
Key Questions and Answers
- What is the GSMA? The GSMA is a global organization representing mobile network operators, shaping industry policies and advocating for better connectivity worldwide.
- Why are spectrum prices a concern? As spectrum prices have increased considerably as a percentage of operators’ revenues, it limits their capacity to invest in critical network infrastructure.
- How have spectrum costs and operator revenues changed? Global spectrum costs now account for 7% of operators’ revenues, a 63% increase over the past decade. Meanwhile, average revenue per MHz has dropped by 60%.
- What impact does this have on consumers and digital economies? Although data is more affordable, operators’ revenue per GB has declined by 96%. This restricts investment in expanding and improving mobile networks, affecting consumers and hindering digital economy development.
- What is the GSMA’s recommendation for spectrum pricing? The GSMA urges governments and regulatory bodies to prioritize affordable spectrum pricing that reflects market realities and fosters long-term digital growth.
- How do public policies influence spectrum costs? Public policy decisions have contributed to inflated spectrum costs in some countries, with costs accounting for up to 25% of operators’ revenues.
- What opportunity do upcoming license expirations present? With nearly 1,000 spectrum licenses set to expire by 2030, these renewals offer a chance to reassess pricing policies and drive investment in next-generation mobile networks.
